Novato Real Estate Market Update: Buyers Rush In (6/7/09)

Home buyers are snapping up an increasing number of Novato properties. In fact, almost half of all homes for sale are now in escrow.* What's more? In the hottest segment of all (single family homes under $500,000), 73% of homes are now in escrow. That's a 27% jump from just last month, and no segment has reached this level since October 2006.

It's interesting to see the shift that has taken place over the past two or three years. Let's look at the week of October 11, 2006. At that time, there were only three homes for sale below $500,000. Today, there are 60.  We haven't seen that amount of (so-called) 'affordable' inventory in Novato since late 2001.

Buyers are realizing this. The lower end of the market is attracting many investors as well as first-time buyers who are taking advantage of historically low interest rates, relatively low prices and government incentives. But it's not just the $500,000 and below segment that is thriving. Homes priced between $500,000 and $700,000 are cooking too. As you can see in the chart, the number of pending home sales between $600,000-$700,000 jumped 52% since last month.  Even the long-struggling $800,000-$999,999 segment saw a sharp increase in buyer activity.

For all the buyer activity, though, price - and not emotion - is still king. In general, today's buyers are absolutely unwilling to pay what they perceive is too much for a property, even when competing with multiple offers. Here is some evidence: In the last 30 days (in the $0-$500,000 segment), homes that were priced well when they came on the market, and subsequently sold within 60 days, sold for 100.32% of their asking price.  Gone are the emotion-driven overbids of 2003-2006/7.

Inventory has really dipped in Novato. In late April, there were a total of 336 units (single family and condos) on the market. Now, there are 248. However, the next wave of foreclosures is expected to start hitting the market in about 2 weeks and should continue through the rest of the year (the moratorium some banks had on foreclosures ended May 1st and the first homes are working their way through the system.)

So, while I don't expect prices to dip in the segments where we've been seeing the most buyer activity, there should be more homes from which to choose.

For more information or to see any Marin County homes, contact me at kmcginnis@fhallen.com or (415) 725-1911. Search all homes at www.BestHomesMarin.com or www.BestHomesNovato.com

*stats are from the week of June 3, 2009. Source is BAREIS. Information has not been verified.