Fairfax, Marin County, California 2012 Spring Real Estate Market Report, 2011 Recap
75 homes sold in Fairfax in 2011, a 2.7% increase over 2010 and over 30% more than in 2008, which was the bottom of the sales volume market in Fairfax
There were 7 townhomes that sold in 2011, the same number as 2010.
The average price of a single family home in Fairfax in 2011 was $594,754, and the median price was $560,000. These numbers unfortunately represent an 11.9% and 8.9% decrease, respectively, from the 2010 numbers. To arrive at these numbers, I stripped out two uninhabitable homes: a home with major fire damage, and an unlivable tear-down that was sold for lot value only.
What to make of these numbers? I’ve got some good news to report and some neutral news to report. I don’t have much bad news to report.
- As has been the case the past few years, the “like for like” sales prices haven’t really gone down much…it’s been more of a disproportionate number of cheap and distressed sales…the three D’s as we realtors say: Death, Divorce and Dire Straights
- Distressed sales activity was a little up, 13 in 2011 vs 10 in 2010 and 2009. These sales represented just over 17% of all sales. Foreclosures were down from 6 to 5, but short sales doubled from 4 to 8. As we look at the overall numbers, 7 of the 11 cheapest homes to sell in Fairfax last year were in this “distressed” category. These distressed sales certainly affected the overall numbers.
- More on the distressed market: out of the 13 distressed sales, 10 out of the 13 happened in the first half of 2011, with only a single foreclosure and two short sales in Fairfax in the second half of the year. Of the short sales and foreclosures that occurred in the first half, most of these were sales processes and transactions that were initiated in 2010. I think this means that these distressed properties were working their way through the system from prior years.
- The hillside market is back in a big way, sales-volume wise. 32 of the 75 homes that sold last year in Fairfax were hillside homes. That was 42.6% of the market. This is a normal figure, actually a little high. Generally about 35-40% of the market in Fairfax is hillside. A couple of years ago you couldn’t give away a hillside home…there was almost no market. As I reported last year at this time, in the first half of 2010, only 10% of the homes that sold in Fairfax were hillside, and as recently as the second half of 2010, 26% of sales were hillside homes. Then it’s over 42% in 2011.
Why? One major factor is “life change” vs. “lifestyle choice”. For the past 4 or so years, “life changes” have been driving the buyers’ motivation in the Fairfax real estate market and in Marin in general: people getting married, people having babies, babies getting bigger, and people downsizing to a smaller home or moving off the hill. All of these buyers were generally looking for family-friendly properties, with a yard, in the Fairfax “flats”…that is, not in the hills. “Life changes” have been driving these decisions. Houses in the hills are not driven by “life changes”, the market for these homes is driven by “lifestyle choices”: views, privacy, close to trails, etc. And for the past 4 years, people haven’t been making “lifestyle choices,” they’ve been staying put, holding things together so to speak. Thus it has been hard to sell these homes.
In the second half of 2010, to a small degree, certainly in 2011, and today in 2012, people are again making the “lifestyle choice” to live in the hills and have a private view home.
Another factor: Of the 13 distressed sales mentioned above, 10 were hillside homes…so it’s safe to say that the “distressed” market was driving the “hillside” market to a certain extent in 2011. More on the good news, though: People are making those “lifestyle choices”, and they’re open to hillside homes. A micro-neighborhood example: The Manor Hill neighborhood is almost all hillside homes. In that neighborhood, there were 12 sales last year (vs 5 in 2010). That’s a 140% increase in unit volume on Manor Hill. Why? Partly because the hillside market is back, partly because Manor Hill had 4 distressed sales last year, 33% of the market, vs 1 distressed sale the year before…a 400% increase. The Manor Hill neighborhood represented 31% of all distressed sales in Fairfax last year.
- The Fairfax flats are “white hot”. If you’ve got a home in the flat areas of town, you can definitely sell it as there is substantial pent-up demand. If it’s in great condition and/or in a great spot, you’ll get top dollar.
- Why didn’t we sell more homes in Fairfax last year? Well, again, sales were flat. But if you asked anyone looking for property, the answer would be “there is nothing for sale.” Very few family homes in the middle part of the market, from $600-900k. The houses that are going on the market, and thus the ones that are selling, are the small homes, the distressed homes, the hillside homes. Very few flat sunny properties with a yard. Believe me, the demand is there. There’s just nothing to buy. Think about it…if you’ve got a beautiful home, great yard, great kitchen, and you can afford it, you’re probably staying put…because you won’t be able to find a house to replace that home…because nothing is for sale. It’s a vicious loop. And even if you could find a great, original house on a nice lot, to fix it up you’d need all the money to do so in cash, as the lending market for this type of activity is almost non-existent. So you stay.
- Another factor was that darn debt limit debate/fiasco that played out in Washington last summer. It dropped consumer confidence by a substantial margin, and consumer confidence is a leading indicator of real estate activity. People just thought the country was going in the wrong direction last summer, and it had an effect on the real estate market. We generally have a “second season” during the September/October “Indian Summer” period in Marin. Last year, during the hangover of the debt debate, there was a notable pessimism among the real estate market. Luckily, that conversation has waned.
- Another factor is something I’ll call the “Zillow Factor”. Now, I love Zillow, in fact I have a partnership with them and have made an investment in their technology to market my business. But the Zillow numbers are COMPLETELY OUT OF WHACK for Fairfax. Just about every house I look at has a Zillow estimate that’s $100k, sometimes $200k low. Why? No comparable sales of nice properties. So your house, with its nice kitchen and great yard is being unfairly compared to that foreclosure on the hill that has no bearing in the real world on the value of your home. But people look at Zillow, see the extremely low number, and think “well, I’ll wait and check again next year.” If you’re discouraged about how much Zillow says your house is worth, give me or give your Realtor a call. Either of us can tell you the real value, and more often than not in Fairfax it’s higher than what Zillow says.
The market is prime for 2012! Buyers are out there. Even the national media is saying good things about real estate…and that hasn’t happened in about 5 years. So have faith, things are looking up in the Marin Real Estate Market! Throughout the recession, Fairfax has had among the lowest unsold inventory in Marin…things have been selling even in the most difficult of times. People want to be in Fairfax! And also note that the beautiful new Good Earth Market is having an extraordinarily positive effect on our little town’s pride and image. I predict that we will have a steady wind at our back in the 2012 Fairfax Real Estate Market. I wish you a safe and prosperous 2012!