Welcome to my Marin County real estate market report for December 2018. This is of course my last market update for 2018, and I would like to take a moment to thank you all for your support over the year. I continue to love every minute of my real estate career, and a big part of that is getting to know people that share the same passion. May you and yours have a wonderfully happy holiday season!

The 2018 real estate market in the Bay Area is going out with a whimper instead of the “bang” of prior years. The national and local real estate markets have definitely slowed down, as rising interest rates, a faltering stock market and limited deductibility of state / local taxes and mortgage interest have all taken their toll. In November 2018 we saw a whopping 45% more homes on the market than in November 2017 while new listings decreased by about 20%. This indicates to me that the surge of inventory we saw after Labor Day — much higher than prior years — did not completely sell and will likely remain on the market through spring.

Home Inventories Up While Pricing Beginning to Flatten and Decline

The median sold price was about flat to last year at this time instead of up the double digits we have seen in almost every other market report this year. This indicates that the laws of supply and demand are in play. As the supply increases, prices decline if demand does not increase commensurately. This is the first month I can remember in a long time where we did not see an increase in the median sold price versus prior year. If you scroll down to my dashboards below, you will see that pricing metrics are flat to down across the board.

Also noticeable is the months of inventory, a metric based on how many months it would take to sell the homes on the market based on closed sales, is up 118% versus the same time last year.

The Impact of Rising Interest Rates and a Volatile Stock Market

Freddie Mac predicts that the national real estate market will adjust to the rising mortgage interest rates and resume modest growth. The big unknown is the stock market, which is very closely correlated to the real estate market, especially here in the Bay Area.

Wells Fargo just published their December 2018 Housing Chartbook, and said:

“Modest Improvement Is Still Likely in 2019, Despite Recent Weakness: Home sales and new home construction continued to lose momentum this past month. While the hurricanes that impacted parts of the Southeast and fires out West likely influenced the data, there is no denying buyer sentiment has weakened considerably as higher mortgage rates have further eroded affordability. Builders also face intensifying margin pressures, as potential buyers demand more affordable product, yet they have seen little to no relief in land development costs and are seeing costs rise for building materials, financing and labor. The pronounced weakness in home sales is particularly vexing because it comes at a time when consumer confidence is near multi-decade highs and the unemployment rate is at its lowest level in decades. While the recent slide in home sales was likely prompted by higher interest rates, the persistent weakness in housing is likely due to demographic shifts and the exceptionally high costs of suburban development. These hurdles are unlikely to relent in coming quarters, which means home sales and new home construction are likely to continue to under-perform the overall economy and underlying growth in households.”

I’m Never Too Busy For You

I am working with a number of buyers and sellers right now — so the market may be approaching winter but there is still business to be done.

Please keep an eye on My Featured Listings page or call me for details on homes coming soon or being held as pocket listings. Whether you are a buyer, a seller, or just want to learn more about the market for a potential future move, I am always happy to talk about the Marin real estate market.

These market reports are a great place to start — but let’s continue the conversation. Call me at 415-847-5584 and I can provide you with a personalized market overview tailored to your specific situation. To those who read this report, thank you for all your support of my business. I couldn’t do it without you.