03 Oct Fall 2018 Update:
The economic expansion that began in June 2009 will be 10 years old next summer- soon to be matching the famous Goldilocks economy of the 1990s.
- Fed Funds: 2.16%
- 1 YR Libor: 2.92%
- 30YR Bond: 3.22%
- 10 YR Note Rate: 3.07%
- Dow Jones: 26,674 pts.
- S&P 500: 2,934 pts.
- 30 Year Mortgage: 4.85%
With prices high and interest rates ticking up, below is a 40 year historical analysis of affordability for Marin County. Be sure to click on the graph below.
- The decade from 1978-87 was characterized by high inflation and interest rates. The average 30 year rate during this decade was 12.7%. Even though prices were a fraction of what they are today, home financing was the most expensive period in the study, but down payments were the cheapest (even in 2018 dollars see graph below).
- The Decade from 1988-1997 interest rates came down to average 8.7%
- The decade from 1998-2008 was the most 2nd affordable period
- The last decade, ’08-‘18 witnessed average 30 year rates at 4.2% and was the most affordable period to finance a home in the study- provided you had the average $241,000, 20% down payment.
Click below to expand:
- On average 3-5% of Marin County appreciation each year is tied to investor home remodeling and flipping and current owner renovation. If inflation is 2%, prices have to rise each year 5-7% for prices just to keep pace with inflation and investment.
- Buyer preferences have changed– if you haven’t updated your house, don’t expect to achieve published price appreciation numbers on your sale.
Locally, the SF Bay economy is still cranking along. The entire state is facing a housing shortage, and office space in SF is expanding rapidly laying the ground work for future competition for scarce real estate resources.
- SF/Marin home prices are now 24% above the ‘06-’07 peak
- SF/Marin prices are about 73% above the bottom of the 2011 market
- We are running 123% above the 7 year average– which since 1978 is slightly below the average of 124% of the trailing 7 years (BCHP Index).
- Marin County average RESI prices should increase to approximately $1,520,000 this year to stay on par with the BCHP 40 year average ( we are currently at $1.5m)
- 2019 Marin home prices should rise about 10% to $1,665,000 to stay on par with this 40 year trend.
The most important tip for home sellers in this market is to plan ahead and do the work- you need to start the process of remodeling to current buyer tastes a year ahead of time if you want to maximize the sale price of your home. Marin home buyers are busy families that want to hit the ground running in their new home; and they’ll pay up for a house that’s done to current tastes: lots of clean white walls, wide plank, light or dark wood floors (greys, whites and black stains–not brown), open great room floor plans, nice master suites, recessed lighting, energy efficient dual pane windows, and lawns contiguous to indoor/outdoor entertaining areas. Please call Dave for more information.