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A typically quiet side street in San Anselmo was choked with traffic on Thursday as a crowd descended to see a newly listed house for sale.
Priced at $375,000, the three-bedroom, two-bathroom “fixer-upper” on Santa Cruz Avenue had already attracted interest from 50 agents and buyers by its third day on the market, said Linda Esposito, the agent who listed the house.
“It’s the beginning of the year, but people are out like it’s the spring,” she said.
The excitement proves that a bargain price — nearby houses have sold recently for up to $200,000 more — can draw a crowd, but it leaves unanswered a question on the minds of many homeowners, buyers and real estate professionals: After several years of decline, has Marin’s housing market hit the bottom?
Some indicators suggest 2010 could have already marked the beginning of Marin’s housing recovery. The county’s median sale price for a single-family house rose by $25,000, or 3.3 percent, from the previous year to $775,000, the first annual increase since 2007, according to figures from the county assessor’s office. Still, with foreclosures and unemployment near historic highs, many Realtors are reluctant to declare an official end to the downturn.
“The only certainty is that there is no certainty,” said Esposito, who works for Alain Pinel Realtors. “If you ask 10 different people, you will get 10 different answers on what’s going to
happen.”
The pace of home sales increased dramatically in 2010, rising 13.9 percent from the previous year to 1,909 units sold, according to county figures. It marked the second consecutive yearly increase following a more modest rise of 6.8 percent in 2009.
A historically high share of the 2010 home sales — 20.9 percent — represented so-called “distressed” properties, which include foreclosures and houses whose owners are struggling to pay their mortgage, according to Bay Area Real Estate Information Services, which tracks listings and sales. Those properties remain a powerful force in the market, creating instability in some neighborhoods and pushing prices down, several real estate agents and brokers said.
“We haven’t seen the worst part of the foreclosure mess in Marin,” said Jack McLaughlin, a broker with Frank Howard Allen Realtors in Greenbrae. “Some areas are hit worse than others. Novato, San Rafael, they still have to go through and get rid of a lot of those distressed properties.”
San Rafael and Novato are home to the county’s largest share of foreclosures, and the two cities contain more than 60 percent of Marin’s condominiums, a segment that has been especially hard-hit by the housing crisis.
Distressed properties made up 44.9 percent of Marin’s condo sales in 2010, according to Bay Area Real Estate Information Services. In Novato, the median condo price fell to $250,000, down 3.5 percent from 2009 and down 45.7 percent from a peak of $460,500 in 2007.
“In areas like Novato, price perhaps went up unrealistically,” McLaughlin said.
Condominiums are not the only segment that saw steep price declines in the past several years. The county’s median single-family sale price of $775,000 in 2010 was down 29 percent from a peak of $1 million in 2007. McLaughlin said those price drops, which followed a rapid run-up for much of the previous decade, would ultimately create more stability in the market.
“We’ll look back and say we had to go through that in order to get this good, solid and stable market, painful as it is right now,” he said. “We’ll be able to look back at 2009 and say that was the bottom. Don’t look for prices to start jumping, but the beginning of solid growth in 2011.”
One sign of recovery cited by McLaughlin and others is the return of investors to the market. Statistics are not available, but brokers and agents said an increased number of homebuyers in the past year have sought a house to re-sell or rent.
At Thursday’s open house in San Anselmo, the crowd of potential buyers and agents included Raoul Isaac, a San Francisco real estate broker and investor who said he was looking for a house to rent out to a longtime tenant. Isaac said he stopped investing after the mortgage crisis and “didn’t even touch anything in 2008,” but he is optimistic about an impending recovery, particularly in Marin.
“There still are a lot of people who want to live in good neighborhoods in the Bay Area and there is demand,” he said.
The house on Santa Cruz Avenue will need a complete remodel costing tens of thousands of dollars if not more than $100,000, but Isaac said he is confident he could eventually recoup such an investment.
“It needs a lot of work but it’s not bad,” he said. “It’ll probably be another year or two years before (the price) turns up, but now I see an opportunity,” he said.
The future of real estate markets in other neighborhoods of Marin could vary greatly depending on local dynamics and price ranges, agents and brokers said.
At the end of 2010, Marin’s cities and towns showed major differences in the current pace of home sales. Countywide, about 20 percent of single-family houses listed on the market had contracts for a pending sale in December, according to information services data. Greenbrae had the county’s highest rate of pending sales with 60 percent while Larkspur had the lowest with zero houses in contract in December.
Less expensive houses continued to sell more quickly, with 49 percent of houses under $500,000 in contract compared with 22 percent for houses between $500,000 and $1 million and 12 percent for houses over $1 million.
The disparities could reflect the ability of owners of more expensive houses to avoid foreclosure and wait longer to sell without lowering their price, said Frank Soda, owner of Sunshine Realty and Marketing in Sausalito.
“Those people have been able to hold on longer through the recession,” he said.
Demand for lower-priced houses appears to be stronger, too. Back in San Anselmo, agent Courtney Whitaker of Alain Pinel visited the house on Santa Cruz Avenue on behalf of a couple seeking to downsize from a larger house. Spurred by the recession, she said, the couple wants to cut mortgage costs.
The price declines of the past few years have created a new market of lower-priced houses for the couple to explore, at least by Marin standards, she said.
“The fact that we’re now looking at a home priced in the $300,000s, even a fixer, in a nice area of Marin like San Anselmo is a pretty incredible development,” she said.
Contact reporter Will Jason via e-mail at wjason@marinij.com
Single-family sales
City Total Sales % Change Median Sale Price %Change
2009 2010 2009 2010
Belvedere 20 28 40.0% $2,587,500 $2,411,500 -6.8%
Corte Madera 68 85 25.0% $905,500 $865,000 -4.5%
Fairfax 55 58 5.5% $633,000 $570,000 -10.0%
Larkspur 69 95 37.7% $1,170,000 $1,038,260 -11.3%
Mill Valley 102 117 14.7% $1,100,000 $1,200,000 9.1%
Novato 377 351 -6.9% $541,000 $559,000 3.3%
Ross 31 22 -29.0% $1,938,000 $1,807,500 -6.7%
San Anselmo 113 124 9.7% $705,000 $724,555 2.8%
San Rafael 291 313 7.6% $702,000 $670,000 -4.6%
Sausalito 33 41 24.2% $1,100,000 $1,150,000 4.5%
Tiburon 54 85 57.4% $1,870,000 $1,700,000 -9.1%
Unincorporated 463 590 27.4% $830,000 $829,500 -0.1%
TOTAL 1,676 1,909 13.9% $750,000 $775,000 3.3%
Condominium and Townhouse Sales
City Total Sales %Change Median Sale Price
2009 2010 2009 2010 %Change
Belvedere – – – – – –
Corte Madera 23 16 -30.4% 512,500 $462,000 -9.85%
Fairfax 4 8 100.0% 360,500 $370,500 2.77%
Larkspur 27 44 63.0% 407,500 $386,250 -5.21%
Mill Valley 28 28 0.0% 456,250 $538,500 18.03%
Novato 196 178 -9.2% 259,000 $250,000 -3.47%
Ross – – – – – –
San Anselmo 9 5 -44.4% 357,000 $432,500 21.15%
San Rafael 193 154 -20.2% 257,000 $300,000 16.73%
Sausalito 30 32 6.7% 667,500 $590,000 -11.61%
Tiburon 17 25 47.1% 600,000 $1,100,000 83.33%
Unincorporated 54 56 3.7% 425,000 $434,000 2.12%
Total 581 546 -6.0% $337,000 $360,000 6.82%
Source: Marin County Asessor’s Office