Are we nearing the bottom for condos and townhomes in Marin County?
One sector of our real estate market here in Marin has begun to stand out, condominiums and townhomes.
In my previous blogs, I have presented the raw statistics of units sold and price changes over the last year or two. Now I've taken that analysis to the next step - and below you will find sales data for the last 15 years. You can clearly see the market correction over the last couple of years. More than that, though, I've plotted a baseline 5% appreciation line as a comparison (see notes below for sources).
You can see that the chart below reflects a sales volume in line with "pre-boom" figures. It also predicts a sales price (average sales price, in this case) nearing that of historical appreciation rates (see notes below). Furthermore, many analysts and economists have targeted a 35%-37% drop in nationwide sales prices to mark the bottom of the market. For Marin County condos/townhomes, that means that we are quickly nearing the target bottom. Now, keep in mind that the concept of an actual bottom of the market is fuzzy at best (will we know when we reach it), and that each market nationwide will certainly perform independently.
Enough said - check out the chart and contact me with questions and comments!
Mitch Todd/Realtor at Tam Realty
---I selected an average rate of appreciation of 5% after researching several sources. First, nationwide appreciation before the real estate boom (1975 - 1998) averages just over 4%. California appreciation for the same timeframe averaged an astounding 7.9% (source: Office of Federal Housing Enterprise Oversight). Inflation (excluding the high inflation period of the '70s) has run around 3.5% (source: Office of Federal Housing Enterprise Oversight). So, I've settled on 5%. You may consider another rate - feel free!
---Another note: I have selected average sales price for my data - honestly, it's easier for gather than median. That said, average sales price can be skewed by 'out of the ordinary' sales, high or low. As a rule of thumb, in Marin County, average sales prices exceed median sales prices due to a few select 'luxury' products skewing the data. For condos/townhomes, sales on DeSilva Island are an example of this. For reference, Dec. '08 average sales price for a condo/townhome in Marin was around $474K, while the median price was around $405K.