Patti Cohn discusses how the wildfires affected Novato’s real estate market
December 6, 2017
Wildfires slow October home sales in Marin
Marin home prices inched up a tad in October to an average of $975,000, rising 1.4 percent from the October 2016 average price tag of $962,000, a real estate data tracking firm said Wednesday.
At the same time, however, Irvine-based CoreLogic Inc. reported that the number of homes sold in Marin in October dropped 13.8 percent from a year ago, likely due to the North Bay wildfires. There were 275 new, resale and condo homes sold in October, compared with 319 homes sold a year earlier.
“October home sales in the San Francisco Bay Area were the lowest for the month of October in six years,” said Andrew LePage, research analyst with CoreLogic. “This is a reflection of low inventory, affordability constraints and market disruptions caused by the destructive and deadly North Bay wildfires that began in early October.”
North Bay real estate professionals said they see some lagging in sales this fall due to lack of inventory and a “schizophrenic” atmosphere where sellers are afraid of pricing their homes incorrectly.
“The fires did throw everybody off for about a week, right when they were happening,” said Vince Sheehan, a broker with RE/MAX Gold in Novato and Larkspur.
“But actually (the slowing in sales) is so much more due to the lack of inventory in the lower price ranges that people can afford,” he said. “For example, Novato has very little for under $850,000 right now — and everybody (in real estate) has buyers for under $900,000.”
Sheehan said one of his clients put in an offer at just under $700,000 for a home listed at $650,000 in midtown Petaluma, between Highway 101 and Petaluma Boulevard.
“We thought it would go up to almost $700,000,” he said. “But there were 18 offers, and four of the offers were over $700,000.”
The number of transactions recorded last month in Sonoma and Napa counties, where fires destroyed thousands of homes, fell significantly both month over month and year over year, according to LePage.
“Across the nine-county region, total home sales between January and October were roughly 1 percent lower than during that same period last year, and were the lowest for that 10-month period since 2014,” he said.
The median price paid for all homes sold in the San Francisco Bay Area in October was $765,000, up 10.9 percent from $690,000 in October 2016.
Patti Cohn, a broker with Pacific Union in Larkspur, said she thinks the Novato real estate market was most affected in Marin by the wildfires.
“That’s where people are flocking to,” she said. “It’s tighter there, but that’s where people in the middle range are going when they’re getting their (insurance) checks.”
Cohn said the political climate may have something to do with any lagging in sales — as it did last year at this time after the presidential elections.
“This time last year, things were really, really slow after the elections,” Cohn said. “People were consumed by it, more distracted — frankly; we’re still kind of consumed now, too.”
On the other hand, life goes on and people still need housing.
“People still have babies, still die, still become empty nesters,” Cohn said. “It (politics) doesn’t affect real estate that much — it’s more a lifestyle thing.”
Sheehan said if there is fear in the sellers’ market, it’s because the inventory is so low that sellers are afraid they won’t be able to find another place to live if they put their home up for sale.
“It’s (the low inventory) a double-whammy, having so many buyers and extra potential sellers, but they don’t see anything they could move to right now, so they hold off,” Sheehan said. “If they’re moving out of the area, then it’s not an issue, then it’s still a sellers’ market.”
According to Cohn, the current Marin market seems to be “schizophrenic,” where there are mixed — and sometimes opposite — actions and results.
“It’s not a science,” she said. “A lot has to do with this time of year.”
Some sellers want to jump on the price escalation trajectory of the past five years, pricing their homes high, and then the homes end up sitting on the market. Others have price reductions and the homes are “flying off the market” as buyers grab them up, Cohn said. And sometimes sellers get spooked by the price reductions around them and just hold off — or don’t know what to do.
Cohn predicts the market will come back to what Marin thinks of as normal in the spring.
“I really think when February or March hits, things will go right back to a frenzy,” Cohn said. “Not to say it’s not a frenzy right now, but it’s changing a lot.”