After a statistically insane few years, the tail end of Q2 saw massive change in the real estate industry. Macro-economic events played a major role in the financial stability of all markets, real estate included, but none more significantly than interest rates essentially doubling in a handful of months.

Tiburon, and most of Southern Marin has seen value gains in excess of 20% Y-O-Y since '19. Q2 was no different; massive value jumps across the board.

With inflation running rampant & rates projected to rise at least 2x more before the end of 2022, the writing is seemingly on the wall that the real estate market will follow both the stock & crypto markets with significant price corrections. Luckily, this pocket of The Bay is so highly sought after, demand should offset value reduction.

The Condominium Market

Condominiums sold well in Q2 contrary to what we’ve been seeing in the overall condominium market; a buyer pool that had drastically lost buying power. Buyers in this price range are massively rate conscious, and it’s likely the first time they’ve ever seen interest rates above 6% in their lifetimes. Psychologically, this is probably the biggest hurdle that all homes for sale in this price range will face.

The Median Market

Tiburon's median SFH market is up $1.5M in Q2 from 2021, an insane appreciation curve. The median sales data is novel compared to surrounding markets, massively outperforming the average. Sellers here are just starting to feel the effect of the entry-level market losing steam. Given the price point, the median market in Tiburon functions more closely with surrounding areas luxury markets; less affected by macro-events.

The Luxury Market

We’ve seen a luxury boom all across SF & Marin over the past 12-18 months with some luxury markets up 50% percent in just a handful of years. Clients in these price points are less affected by macroeconomic events and tend to transact out of want rather than need. The luxury market stands to be significantly less affected than the median or condominium markets. But don't expect the same appreciation moving forward.

Projecting Ahead To Next Month/Quarter

I would anticipate a similar market to the one we're currently experiencing for the next quarter; 6-7% rates, an entry-level market reeling for stability, and a mostly flat median market (contrary to Q2 data).

While I wouldn't expect to see single family home values to drop at all, I wouldn't expect them to rise, either. Demand is still insatiably high for the lifestyle Tiburon provides, and there is still plenty of cash and equity in the Bay Area for residents to buy-sell property.

I think we will find 'the bottom' once the Russia-Ukraine situation has a definitive and positive plan for moving forward, oil markets steady, and U.S. inflation is under control. Unfortunately, I don't see those 3 things all happening in Q3.

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