How bad is the news coming from DataQuick?
The real estate analytics firm released their data for July 2011 last month and the story is not good. It’s difficult, however, to determine just now “not good” it is. By the time the data gets to the average citizen it’s been filtered through a media hell-bent on sticking to the point – and the point is that it’s “not good.”
The problem with data-based analyses of the housing market is that they’re limited by sample size. What might shed light on the performance of a large region -- the 5,096 homes sold in the nine-county San Francisco Bay Area were worth 7.5% less in July 2011 than they were in July 2010 – comparing the seven homes sold in Fairfax last month to the six sold last July isn’t going to tell us much about the health of local real estate. And how much does an aggregate total including the 2,151 homes sold in Alameda and Contra Costa Counties (median values down 6.4% and 8.5%, respectively) mean to someone who owns a home in Marin (182 homes sold in July 2011)?
For the record, Marin County properties have lost 3.9% of their value in the past year, which isn’t great. Investments are supposed to increase in value, not lose value. Still, from the vantage point of Napa County (down 15%), Solano County (minus 9.9%) or Sonoma County (-8.6%), Marin is doing pretty well.
With the statewide story being one where bargain-basement homes are snapped up by investors while the high-end languishes, you have to wonder how San Anselmo and Fairfax are doing, given their status as two of Marin’s more “affordable” cities.
I’ve done the math. If we limit ourselves to DataQuick’s parameters – July 2011 versus July 2010 – the story is comparatively “pretty good.” The seven homes sold in Fairfax last month had a median value of $544,000, 5.9% higher than the six homes sold in July 2010. The eight homes sold in San Anselmo showed a median ($798,063) that was 2% higher than the nine sold in July 2010.
So how do we evaluate the performance of the San Anselmo and Fairfax markets based on those handful of homes? Should we take those single-digit value increases and call it a day? Should we ruminate on the 17% increase in Fairfax sales, year-over-year? What about the 11% decrease in San Anselmo sales? Is that cause for alarm?
There is value – however limited -- to looking at year-over-year statistics. Comparing July 2011 to July 2010 tells us more than comparing July 2011 to June 2011, because it considers seasonal trends. July is a slower month than June in the real estate world. August is slower still. There were two completed sales in Fairfax during the first half of August, four in San Anselmo. Incidentally, sales in Fairfax were down 42% month-over-month in July and down 50% in San Anselmo for the same period.
Instead of lasering in on one month, lets look at local trends. This year has been a mixed bag for both cities. There have been months of almost glacial activity (two sales for Fairfax in both January and February) and weird price dips (San Anselmo’s median for May, $566,594, was 28% lower than April’s $782,286. The following month, the median rose to $840,065). There have also been several months in which medians hung around $550,000 (Fairfax) and $800,000 (San Anselmo). July’s numbers are well within the year’s norm.
Add it all up and you get a fairly unsexy, although mathematical, conclusion: in Fairfax and San Anselmo, the market is holding fast.
Are you concerned about your home value? Has it increased or decreased?