A look at the numbers:
Since 2000 median home prices in Novato have increased 167%
Since 2005, the former peak in prices, home prices in Novato have increased 50%
Since 2011, the bottom of the market, home prices in Novato have increased 122%
In 2021, Novato median prices increased 15.4%, reaching $1.2M for the first time.
2021 was a boom year for real estate
The year began with new lows in interest rates as the Fed pumped money into the financial system, by among other things, buying large quantities of mortgage backed securities. This fueled already high buyer demand and drove prices higher. After seeing a 9.4% increase in 2020, we saw an additional 15.4% rise in 2021.
There was a lot of talk of low inventory, which was true for any given day, but all in all 633 houses sold in Novato in 2021. That's the highest number of sales we've since since back in 2005, which coincidentally also had 633 sales. A typical year has closer to 500 sales but anything in the 400-600 range is normal.
The only time in recorded history that every economist agreed house prices would go down was in 2020 when COVID struck... they (and we) were all wrong. What wasn't predicted was a surge of people with relatively well paying white collar jobs, that had a desire or need for more space. To top things off, discretionary expenses (restaurants, vacations, etc.) were curtailed, and borrowing money got cheaper. What resulted was the "great reshuffling" which fueled housing demand across the Country.
The million dollar question: is it sustainable? The short answer is, Yes. Are we certain? No. Both from a data perspective and a feet on the street perspective, it seems like Buyer demand will continue. According to the California Association of Realtors Housing Affordability Index, Marin is hovering in the 21-22% range (22% of people in Marin can afford the median priced home). While that doesn't sound great, we have to keep in mind that 50% of homes are below the median price. Low 20's is within the normal parameters, although at the lower level, which means we could still see moderate increases without a pullback, but if we see continued 15% yearly gains we'd likely head into pullback territory down the road.
Visiting the economic round table of "experts", Danielle Hale (Realtor.com chief economist) predicts a 2.9% rise, Daryl Fairweather (Redfin chief economist) predicts a 3% rise, Lawrence Yun (National Association of Realtors chief economist) predicts a a 3% to 5% rise, Frank Nothaft (CoreLogic chief economist) predicts a 7% rise, Zillow predicts a rise of 11%. All these are national predictions of course.
An informed perspective
Buyer demand remains strong particularly in the more "affordable" range. Much of the demand has been driven by the desire to have more space and more access to the outdoors, also buoyed by the ability of many to work remotely. Some of that is driven by buyers who probably would have moved here anyway, but chose to accelerate plans, and some of that is driven by buyers who have recalibrated their priorities given the pandemic. While many of the most motivated have already made their move, it appears the trend will continue well into 2022. We'll see some headwinds as increases in interest rates are almost certain, and we do have some wild cards, like the stock market and possible continued Coronavirus outbreaks. That said, by the end of the year we expect to see moderate gains in the 3%-6% range.
Below is a deeper dive into some of the Novato data you'll only find on NovatoBroker.com...
Here's a look at the dollar per square foot changes:
Dollar per square foot ($/sq ft) is an important metric in assessing values. Here we see that $/sq ft prices have tracked sales prices, with an increase of 18.7% from 2020 to 2021. Slightly above overall price gains.
In our scatter chart, each point represents a sale in 2021. As is typical, $/sq ft price overall increases as home sizes decreases. The median overall for Novato in 2021 was $589 (vs. $496/sq ft in 2020). The smallest increase was in the 2000-3000 sq ft houses, although all segments had strong gains. Prices commonly fluctuated between $400/sq ft and over $800/sq ft.
Prices vary based not only on size, but neighborhood, upgrades, condition, yard, views, style, neighbors, traffic flow, staging, and agent marketing skills.
For an up to date look at the current market go to our Novato Monthly Update page.
For a free professional estimate of your home's value go to our Get My House Value page.
As an aside, Agents usually need 3-6 weeks to bring a house to market, so NOW is not too soon to reach out if you are thinking of selling this Summer, or even further down the road. In fact, savvy Sellers contact us early, providing a running start, which in turn, allows them additional time to begin the process of purging and packing (no easy feat). In short, the sooner, the better for everyone involved.
If you ARE interested in selling your home this calendar year, we're here to help you manage the process and achieve your goal. Please reach out if you'd like an accurate assessment of your home's value.