One way to evaluate how much farther prices will have to fall in Southern Marin County CA is to approximate average incomes in each town and to apply some basic financial planning concepts to determine what average prices should be.
Approximate 2009 Average Incomes:
- Incomes in Tiburon: $270,000
- Incomes in Mill Valley: $180,000
- Incomes in Sausalito: $167,000
Example: The average family living in Homes in Tiburon CA earns $271,500, pays $38,000 income tax, leaving them with $233,500. They spend 30% on mortgage interest, could afford a $70,000 annual mortgage (rate 5.5%), and a $1,274,500 mortgage. The average homeowner has 35% home equity, so Tiburon can sustain an average home value of $1,960,000.
|
|
Projected Average |
Current |
Difference |
|
Tiburon |
1,960,157 |
1,994,000 |
+2% |
|
Mill Valley |
1,331,00 |
1,152,000 |
-13% |
|
Sausalito |
1,230,000 |
821,500 |
-33% |
The result shows that Tiburon home prices are very close to where they should be, and that homes in Mill Valley CA and Sausalito CA Real Estate prices are substantially below what those towns could support from a financial planning perspective. Please see my website for more information.
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