Marin County Real Estate: Long Term Forecast

By
Real Estate Agent with Decker Bullock Sothebys Realty

Longer Term Outlook for Home Prices Marin County CA :

The economic maelstrom we are navigating is more than just a recession. Recessions occur regularly, and in fact are important part of the economic health of any economy. Our economy is going through is a shift of greater proportion & meaning: the greater post-war, high-growth ‘secular' boom cycle that culminated in the Great Bull Markets in stocks and housing is over.

Moving forward, GDP growth will slow to below trend for an extended period, and unemployment rates will average higher. There won't be as much compensation trickling down through the system to the lower income components of our economy-leading to an increase in crime and drug use around urban centers. Successful families will cluster to safer neighborhoods close to key job markets-- the ultimate "flight to quality", and demand for Marin County homes will benefit from this trend.

Prices in Marin will stabilize and remain at these inflation-adjusted levels for the 3-5 years. Real Estate prices in other parts of the country with sub-par job markets may continue to slowly erode thru this period.

Valuations:

Residential Real Estate relies on flawed valuation models. The mantra is that homes "are only worth what someone will pay for them"; and the best way to value a home is in comparison to other similar homes that have sold recently nearby; articulated mainly by $/sqft. The problem with this antiquated valuation model is comps closely track the business cycle so towards the peak the comps will guide people to overpay (and banks to over lend) and at the bottom buyers won't fully understand the value inherent in the marketplace. I have developed a revolutionary software valuation model that estimates "fair value" for homes in Marin (http://www.thedupontgroup.net/home-value-estimator). In hot markets, homes will trade at a premium to fair value, and in cold markets, homes will trade at discount to fair value.

The premise of the model is: houses, like any other asset, have an implied value given the characteristics of the asset and availability of substitutes-- or choices. This value has as much to do with the location value as the structure; the actual house is a depreciating asset that requires constant maintenance-and across a large sample size homes are differentiated almost solely by location (i.e. Mill Valley or Modesto).

Our group is leading our firm again this year in home sales, and it is due mainly to: 1) how we articulate value to buyers; and 2) implementing proven marketing principles from other industries for promoting homes in an atypical real estate market.  

Now is not the time to select a realtor based on tenure-the habits most realtors have developed over the last 15 years are not translating well to selling homes in the real estate environment in Southern Marin County. Please call David DuPont @ 415-867-6611.

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