Q1 Trends in the Marin Real Estate Market: Navigating Inflation and High Demand

The Marin real estate market has been experiencing some noteworthy shifts in recent months. While the first quarter of 2023 saw a decline in sales compared to the previous year, it is important to consider the broader factors influencing the market. In this blog post, we want to try to help you make sense of it all by taking a look at the current state of the Marin real estate market, including the impact of inflation, buyer demand, inventory levels, and mortgage rates.

Effects of Inflation and Federal Reserve Actions

Inflation has been a major concern affecting not only the economy but also the everyday lives of individuals. The Federal Reserve has responded to this issue by raising the Federal Funds Rate in an attempt to lower inflation. If the Fed successfully curbs inflation by the end of the year, it could potentially lead to lower mortgage rates.

Market Overview and Sales Trends

In the first quarter of 2023, the Marin real estate market experienced an 8.6% decline in year-over-year sales. The decrease can be partly attributed to the heavy rains, a spike in interest rates, and low seasonal inventory. While overall the numbers is slowly decelerating year over year, it’s not a buyers market quite yet as shown from the month over month data below as inventory increases for our Spring market.

Seller's Market Conditions

Despite the slight dip in overall sales, the Marin real estate market continues to heavily favor sellers. Buyer demand remains high while inventory levels remain low, creating a competitive environment for potential homebuyers. In desirable locations, particularly for turnkey homes, aggressive bidding wars are still prevalent. Many buyers are finding themselves having to waive contingencies and pay 10%-30% over the asking price to secure the properties they desire.

Challenges Faced by the Market

Persistent high mortgage rates and limited inventory pose challenges to the Marin real estate market. These factors have deterred many potential homebuyers, particularly those concerned about inflation, rising interest rates, and volatility in the banking sector. Despite these challenges, the combination of high demand, limited supply and the fear of another rate hike in the Fall has driven up prices and intensified competition among buyers in the recent months.

Year Over Year Comparison

Q1 2023 V. 2022

$1.6M

MEDIAN SALES PRICE DOWN 8.6% ▼

$844

MEDIAN PRICE/SQFT DOWN 10% ▼

19

AVG. DAYS ON MARKET UP 111% ▲

251

PROPERTIES SOLD DOWN 41% ▼

Monthly Comparison

1ST QUARTER 2023

YEARLY COMPARISON

YEARLY REGIONAL COMPARISON

Answer’s to our clients FAQ’s:

Should I wait until interest rates decline to sell my home?

A recent survey from Realtor.com indicates that 56% of people planning to sell in the next 12 months are waiting for rates to come down. While this approach may be suitable for some sellers, it also presents an opportunity for more proactive sellers to enter the market now.
When fewer sellers list their homes, it creates a situation where buyers must compete for the limited supply of homes for sale. Therefore, waiting for interest rates to decline is not the only factor to consider when deciding to sell your home.

Is it a bad time to sell my home?

In our opinion, no! Many sellers are capitalizing on the current market conditions, which include a limited supply of homes for sale. Sellers who have prepared their properties well, priced them competitively, and timed their listings strategically are experiencing remarkable sales results.
It's essential to note that successful sales in the current market require thorough preparation, competitive pricing, and careful timing to align with market trends. By following these best practices, sellers can optimize their chances of achieving a favorable outcome.

Are interest rates expected to keep rising in 2023?

Mortgage rates have been volatile in 2023, fluctuating between declines and increases. Currently, the 30-year, fixed-rate mortgage stands at 6.35% as of May 11, down from the previous week's 6.39%. Despite nearing and potentially surpassing the rates from the beginning of the year, experts in the housing market remain hopeful that mortgage rates will resume their downward trend if the Federal Reserve avoids further rate hikes.

Thinking of making a move?

Our team is happy to provide a complimentary home evaluation if you’re curious what your home would trade for in today’s market. If you’re considering making a move, reach out to one of our team members anytime.