I wanted to give everyone an update on what is happening in the Marin County Market as of March 13, 2008. The Market in Marin is quite buoyant no matter what you are hearing from sources outside of Marin County.

Here are the details:

As you can see we have some impressive changes in the median prices form year over year. It is evident in the community of real estate professionals that higher priced homes in Marin are the ones that are selling. The median prices have increased dramatically in the towns of Larkspur, Sausalito, Greenbrae, San Rafael and Ross with declines in median prices in Mill Valley, Corte Madera. Belvedere, Fairfax, Kentfield and Novato.

The number of units sold throughout Marin has decreased by 42% from 324 single family homes sold from January 1, 2007 to March 15, 2007 to 187 for the same period in 2008.Even though prices are maintaining we are seeing a significant reduction in the number of homes turning over as well as sellers refraining from putting their house on the market until the housing market stabilizes.

President Bush signed into law new legislation designed to help homeowners in deep mortgage trouble. Here are some of the highlights:

Homeowners with Private Mortgage Insurance (PMI)
There was some good news for homeowners with private mortgage insurance. Congress voted to extend the deductibility of PMI premiums until Jan. 1, 2010.

Only homeowners with adjusted gross incomes below $100,000 are eligible for a full deduction (it phases out between $100,000 and $110,000), and only mortgages for primary residences originated after 2006 are eligible. A PMI trade association estimates this tax break will result in an average $350 annual savings for homeowners eligible for the deduction.

Another piece of the legislation provides tax relief for surviving spouses. If a surviving spouse opts to sell a primary residence within two years of the death of the other spouse, the surviving spouse is eligible for a $500,000 capital gains exclusion, rather than the old $250,000 exclusion that applies to individuals. This is big for those in Marin where property values are extremely high and capital gains have accrued for many years.

Debt forgiven but not forgotten:
The most significant change under the new law is tax relief for people who sell their home for less than the remaining balance on their mortgage. Under the old law, even if the lender agreed to “forgive” the difference between the home sale price and the mortgage balance, the IRS wasn’t so lenient. Tax regulations required lenders to report the amount that was forgiven as gross income received by the seller, in effect handing sellers a tax bill on income they never actually received. For example, if you sold your home for $1,500,000 but your remaining mortgage balance was $1,550,000, you would have had a tax bill on the $50,000 difference that your lender forgave.

The new law eliminated the tax until Jan. 1, 2010. If you’re forced to sell a home you can no longer afford, and your lender agrees to forgive any unpaid mortgage balance, you no longer have to worry about a hefty tax bill as well. (This tax break is retroactive to Jan. 1, 2007.)

Voluntary Mortgage Relief
Washington is preparing a voluntary relief program for the mortgage-stressed. The HOPE NOW alliance, which features Treasury secretary Henry Paulson as a lead flag bearer, announced a plan in early December that should be up and running soon. The plan allows some subprime mortgage holders to refinance, or lets them lock in their current interest rate for five more years — a deal that has been dubbed a “tease freeze.”

Here are some limitation to the plan: First, it’s voluntary, lenders are encouraged to offer the relief programs but not required. The plan comes not straight from the White House or Treasury Department, but from the American Securitization Forum, a consortium of money managers (read: hedge funds and Wall Street firms sitting with the distressed debt), as well as all sorts of mortgage lenders and servicers.

The group’s primary motivation is to help investors holding the mortgage debt, not the actual homeowners with the exploding mortgages. Moreover, the eligibility rules will make it tough for many people to quality for help.

Some facts to the Five Year Freeze Rules

The full rundown of the HOPE NOW plan is available here, but here are the major points that determine if you’re eligible for a five-year freeze:

1. If your mortgage has already reset, you are not eligible
2. Only adjustable rate mortgages made between Jan. 1, 2005, and July 31, 2007, are eligible. (Option-only loans aren’t eligible.)
3. If your lender happened to keep the loan on his books rather than sell it into a securitization pool you are not eligible — only securitized loans are eligible for this plan. Looks like a bail out for investors.
4. Your interest rate must reset between Jan. 1, 2008, and July 31, 2010, and the new payment must be at least 10 percent higher than your current payment.
5. Meet all the above criteria and get your restructure started before the initial reset and you may qualify except for the following:
6. Only subprime adjustable rate mortgages are eligible. What qualifies as subprime? You must have a FICO credit score below 660. If you have a higher score, the lender will look at your income to determine eligibility.

You MUST be up to date with your mortgage payments. If you’re currently more than 30 days behind on a payment, or if you’ve been 60 days late more than once in the past 12 months, you won’t qualify for the 5-year freeze program.

Here are comparison scores (percentiles) from the 2007 STAR tests taken by almost every public-school student in California. This test is administered annually by the California Department of Education.

We have broken out the results in a way that makes comparisons between schools easy.

The percentiles, based on the scores, range from 1 (the lowest) to 99 (the highest). A school that scores in the 20th percentile is landing in the bottom 20 percent of the state. A school that scores in the 95th percentile is placing among the top 5 percent of schools in the state.

The scores are presented alphabetically by district and within each district alphabetically by school.

The city profiles will give you the school district or districts serving each town. For ease of searching, read the city profile, find out the name of the district and search by district.

Or just scroll through the scores.

These percentiles should be considered approximate measures of how the schools and their students are performing.

A few schools will post scores that bounce all over or will have, say, scores in the 70s with the exception of one class in one test scoring in the 30s.

For the why … maybe the kids had an off day or misunderstood the tests or maybe the testing group is small and a few students scoring very high or very low will skew the scores. Or maybe the score is wrong. After issuing the scores, the department of education reviews its figures, accepts comments from the school districts and later makes corrections.

We suggest that you ignore the aberrational scores and look at what the majority of the scores imply.

These percentiles don’t show whether a school’s scores from year to year are rising or falling. The rankings show just how the schools compare against one another.

Many low- and middle-scoring schools have students who score high. Many high-scoring schools have students who land below the 25th percentile.

A few schools post average scores but turn out many high-scoring students.

Click here to view.

1. Home Prices Will Decline and then Rise modestly
   Median home prices will continue to fall in softened markets (San Rafael, Novato, and Sausalito). They won’t take a nose dive; though, they will float, slipping left to right, then left again, and closer and closer to a landing spot. Overpriced listing will die very fast. The best areas for continued growth will be Mill Valley, Larkspur and Greenbrae.
2. Buyers Will Write Lowball Offers
   Novice buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers. Sellers should expect to receive an abnormal number of out-of-whack offers from buyers who will throw low offers to see if something sticks.
3. Inventory Will Increase Before Sharply Dropping
   As the New Year rolls around, sellers whose listings expired in 2007 will put their homes back on the market as a new listing. Nobody will be fooled. Inventory will continue to climb until mid-summer, at which point sellers will begin to realize they must either remove their home from the market or be reasonable. Most will choose to remove their homes from active status and inventory will begin to fall. Good homes in great neighborhoods will continue to receive offers and in some cases multiple ones.
4. Short Sales & Foreclosures Will Increase
   Interest rates on 3-year and 5-year ARMs will begin adjusting, and those who pay interest on Option ARMS including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales on properties (those sales for less than the mortgage balance) paving the way for a flood of bank-owned properties to hit the market.
5. Interest Rates Will Stabilize
   Mortgage interest Rates will move backward within one-quarter to one-half point, and buyers will gravitate towards traditional fixed rate mortgages if they can qualify. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments such as lease options or land contracts purchases.
6. More Investors Will Enter the Market
   Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. As usual in this type of market first time home buyers will find themselves competing with all-cash investors.
7. Real Estate Advertising Will Move Online
   As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies.

1. Home Prices Will Decline and then Rise modestly

- Median home prices will continue to fall in softened markets (San Rafael, Novoto, and Sausalito). They won’t take a nose dive; though, they will float, slipping left to right, then left again, and closer and closer to a landing spot. Overpriced listing will die very fast. The best areas for continued growth will be Mill Valley, Larkspur and Greenbrae.

- As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies.
. - Novice buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers. Sellers should expect to receive an abnormal number of out-of-whack offers from buyers who will throw low offers to see if something sticks. - As the New Year rolls around, sellers whose listings expired in 2007 will put their homes back on the market as a new listing. Nobody will be fooled. Inventory will continue to climb until mid-summer, at which point sellers will begin to realize they must either remove their home from the market or be reasonable. Most will choose to remove their homes from active status and inventory will begin to fall. Good homes in great neighborhoods will continue to receive offers and in some cases multiple ones. - Interest rates on 3-year and 5-year ARMs will begin adjusting, and those who pay interest on Option ARMS including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales on properties (those sales for less than the mortgage balance) paving the way for a flood of bank-owned properties to hit the market. - Mortgage interest Rates will move backward within one-quarter to one-half point, and buyers will gravitate towards traditional fixed rate mortgages if they can qualify. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments such as lease options or land contracts purchases. - Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. As usual in this type of market first time home buyers will find themselves competing with all-cash investors. - As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies. and . - Novice buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers. Sellers should expect to receive an abnormal number of out-of-whack offers from buyers who will throw low offers to see if something sticks. - As the New Year rolls around, sellers whose listings expired in 2007 will put their homes back on the market as a new listing. Nobody will be fooled. Inventory will continue to climb until mid-summer, at which point sellers will begin to realize they must either remove their home from the market or be reasonable. Most will choose to remove their homes from active status and inventory will begin to fall. Good homes in great neighborhoods will continue to receive offers and in some cases multiple ones. - Interest rates on 3-year and 5-year ARMs will begin adjusting, and those who pay interest on Option ARMS including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales on properties (those sales for less than the mortgage balance) paving the way for a flood of bank-owned properties to hit the market. - Mortgage interest Rates will move backward within one-quarter to one-half point, and buyers will gravitate towards traditional fixed rate mortgages if they can qualify. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments such as lease options or land contracts purchases. - Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. As usual in this type of market first time home buyers will find themselves competing with all-cash investors. - As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies. , and . - Novice buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers. Sellers should expect to receive an abnormal number of out-of-whack offers from buyers who will throw low offers to see if something sticks. - As the New Year rolls around, sellers whose listings expired in 2007 will put their homes back on the market as a new listing. Nobody will be fooled. Inventory will continue to climb until mid-summer, at which point sellers will begin to realize they must either remove their home from the market or be reasonable. Most will choose to remove their homes from active status and inventory will begin to fall. Good homes in great neighborhoods will continue to receive offers and in some cases multiple ones. - Interest rates on 3-year and 5-year ARMs will begin adjusting, and those who pay interest on Option ARMS including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales on properties (those sales for less than the mortgage balance) paving the way for a flood of bank-owned properties to hit the market. - Mortgage interest Rates will move backward within one-quarter to one-half point, and buyers will gravitate towards traditional fixed rate mortgages if they can qualify. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments such as lease options or land contracts purchases. - Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. As usual in this type of market first time home buyers will find themselves competing with all-cash investors. - As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies. ). They won’t take a nose dive; though, they will float, slipping left to right, then left again, and closer and closer to a landing spot. Overpriced listing will die very fast. The best areas for continued growth will be , and . - Novice buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers. Sellers should expect to receive an abnormal number of out-of-whack offers from buyers who will throw low offers to see if something sticks. - As the New Year rolls around, sellers whose listings expired in 2007 will put their homes back on the market as a new listing. Nobody will be fooled. Inventory will continue to climb until mid-summer, at which point sellers will begin to realize they must either remove their home from the market or be reasonable. Most will choose to remove their homes from active status and inventory will begin to fall. Good homes in great neighborhoods will continue to receive offers and in some cases multiple ones. - Interest rates on 3-year and 5-year ARMs will begin adjusting, and those who pay interest on Option ARMS including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales on properties (those sales for less than the mortgage balance) paving the way for a flood of bank-owned properties to hit the market. - Mortgage interest Rates will move backward within one-quarter to one-half point, and buyers will gravitate towards traditional fixed rate mortgages if they can qualify. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments such as lease options or land contracts purchases. - Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. As usual in this type of market first time home buyers will find themselves competing with all-cash investors. - As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies. , and ). They won’t take a nose dive; though, they will float, slipping left to right, then left again, and closer and closer to a landing spot. Overpriced listing will die very fast. The best areas for continued growth will be , and . - Novice buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers. Sellers should expect to receive an abnormal number of out-of-whack offers from buyers who will throw low offers to see if something sticks. - As the New Year rolls around, sellers whose listings expired in 2007 will put their homes back on the market as a new listing. Nobody will be fooled. Inventory will continue to climb until mid-summer, at which point sellers will begin to realize they must either remove their home from the market or be reasonable. Most will choose to remove their homes from active status and inventory will begin to fall. Good homes in great neighborhoods will continue to receive offers and in some cases multiple ones. - Interest rates on 3-year and 5-year ARMs will begin adjusting, and those who pay interest on Option ARMS including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales on properties (those sales for less than the mortgage balance) paving the way for a flood of bank-owned properties to hit the market. - Mortgage interest Rates will move backward within one-quarter to one-half point, and buyers will gravitate towards traditional fixed rate mortgages if they can qualify. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments such as lease options or land contracts purchases. - Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. As usual in this type of market first time home buyers will find themselves competing with all-cash investors. - As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies. , , and ). They won’t take a nose dive; though, they will float, slipping left to right, then left again, and closer and closer to a landing spot. Overpriced listing will die very fast. The best areas for continued growth will be , and . - Novice buyers will read newspaper headlines, figure out it is a buyer’s market and write lowball offers. Sellers should expect to receive an abnormal number of out-of-whack offers from buyers who will throw low offers to see if something sticks. - As the New Year rolls around, sellers whose listings expired in 2007 will put their homes back on the market as a new listing. Nobody will be fooled. Inventory will continue to climb until mid-summer, at which point sellers will begin to realize they must either remove their home from the market or be reasonable. Most will choose to remove their homes from active status and inventory will begin to fall. Good homes in great neighborhoods will continue to receive offers and in some cases multiple ones. - Interest rates on 3-year and 5-year ARMs will begin adjusting, and those who pay interest on Option ARMS including many buyers who used 100% financing in 2005, will begin to lose their homes. Many banks will refuse to negotiate short sales on properties (those sales for less than the mortgage balance) paving the way for a flood of bank-owned properties to hit the market. - Mortgage interest Rates will move backward within one-quarter to one-half point, and buyers will gravitate towards traditional fixed rate mortgages if they can qualify. Buyers who cannot qualify for conventional loans will lean toward seller-financed instruments such as lease options or land contracts purchases. - Because investors use different criteria than traditional home buyers, investors will return to the market as they begin to recognize that a buyer’s market is an excellent time to purchase real estate. As usual in this type of market first time home buyers will find themselves competing with all-cash investors. - As newspaper advertising and readership continues to decline, agents will question whether their advertising dollars are better spent elsewhere. Print advertising will lose its effectiveness. If postal rates continue to increase, agents will stop using direct mail campaigns and instead use internet listings for better results and low-cost marketing strategies.

It is Sunday December 9 and the weather is crisp, sunny and cold as I sit here at my listing at 30 Prospect in San Anselmo. So far the number of people stopping by for a view of the house has been limited to neighbors. You might be asking the question,” Where did all the buyers go?” Well I am positive they are here somewhere but we won’t see many of them until the New Year.

Whether it is the press that says real estate is slumping, or the holiday scene in Mill Valley and Marin taking people in other directions, the buyers are not in the market at the present time. To give you an idea on how the market is doing I like to look at the percentage of homes in contract to give us some guidance. This percentage is calculated from the total number of homes listed and those that are in contract with buyers. Anything around 20% or less is a buyer’s market. Anything 30% or more is a seller’s market. A balance market would be somewhere around 25%. Don’t let some of these numbers fool you. The population of homes on the market is very low this time of year and especially now as sellers are unsure what to do on pricing and whether to sell or hold. When you have only 6 homes in a community on the market, like Greenbrae, the percentages look good but it is not indicative at this point of a seller’s market. We will need to wait until the first few months of the New Year to see how it all falls into place.

The percentage of listed homes in contract as of December 9, 2007 is as follows:

The Novato market is problematic. There are many short sales as well as defaults in Novato due to the sub prime mortgage crisis. Sellers that can wait to sell are advised to hold on to their homes until the market stabilizes. Those that cannot wait need to get a real estate advisor that can help them navigate the treacherous turns of this market. Of course feel free to call or drop me a line at rparks@visionrealtors.com.

You have been reading lots of press that the San Francisco Market is not very good. If you read through top the end of most of the articles you will find an admission that the SF market is defying what is going on in the rest of the county. San Francisco is still strong market in many areas.

Real Estate sales figures tell a very different story than most of the doom and gloom headlines generated by editors who want to sell newspapers.

The last week of October 2007 shows the following results,

Single Family Homes
1. 26 sold for more than list price
2. 12 sold for over asking price
3. 6 Single family homes sold for asking price
4. 12 single family homes sold for less than asking price.

Condo/TIC and Lofts
1. 18 Sold for more than list price
2. 12 Sold at list price
3. 13 sold for less than list price

There have been multiple offers on many of these sales telling a story that well priced homes in good areas are being picked up quickly.