San Rafael Real Estate in Q4 of 2022
Q4 was a coup de grâce for what was the obvious turning point of a bull market. The downturn affected each and every pocket in the real estate sector, and few neighborhoods/areas were spared. For the first time in over a decade, the Marin real estate market shifted from a seller's market to a buyer’s market.
There are more deals available in Marin county than I've seen in my entire career. Single-family homes sitting on the market for 90 days plus, condominiums seeing little to no desirability in places, and luxury market look one of the biggest hits in the nation.
Beautiful turn-key properties are still selling well. There will always be a market for location + turn-key, but anything less than that might need to consider remodels prior to listing in Spring '23.
The Condominium Market
The condominium market took a massive slide in Q4 recording only 20 sales when we're accustomed to seeing 45+ in regular markets. Buyer demand fell off a cliff.
Condominium buyers are always the most rate conscious which makes the entry-level market highly susceptive to immediate downturns when rates rise.
In good news, however, the average price for a condominium in San Rafael remained mostly level at a $706,000 average after seeing a 710k average over the entirety of 2022.
The Median Market
The San Rafael median market has been performing strongly throughout the year, and Q4 was no different. Even with rate-conscious buyers being heavily affected by the continual increases, the median market in San Rafael has barely budged.
My thesis; A $1.6M median is perfectly in the sweet spot where rate-conscious buyers still have enough cash for a down payment, but are getting priced out of surrounding neighborhoods like Larkspur & Corte Madera with a median of ~ $2M in this 6% rate environment.
Properties that are presented & priced well are still seeing multiple offers. It's in a homeowner’s best interests in 2023 to remodel/update and provide a turnkey experience for buyers. The trend of buyers being willing to compete for anything less-than turnkey is behind us.
The Luxury Market
The luxury market in San Rafael, in stark contrast to the median, screeched to a halt. Only 2 sales were recorded throughout Q4 after almost 30 hit the books between Jan & October.
San Rafael luxury homes are the most susceptive in Marin to swinging trends; buyers priced out of Mill Valley, Corte Madera & Larkspur for luxury estates all turned to San Rafael during the pandemic markets. With the recent swing of buyer desirability in the real estate market as a whole, however, buyers seem to be less open to alternate markets.
As a seller moving into 2023, it's paramount to be in tune with the current market and price property in line with the most recent sales. There are always buyers in the market for the right property, and properties priced & presented well will still demand attention.
Projecting Ahead To Next Month/Quarter
Q1 will set the tone for the coming year more so than any other quarter in recent memory. The entirety of the real estate community is sitting on the edge of our seats eagerly hoping for a strong sales quarter and a renewed confidence that we've seen the worst of the correction. With rates already decreasing toward the tail end of Q4, it seems like we've already experienced the bottom of the market.
I could easily see a full year of price stagnancy in 2023, with property values staying mostly level with the prices we're seeing now, down < 10% from the Q1 "22 peaks. Prices across Marin were appreciating at 15-20% year over year during COVID, which was an absolutely absurd pace.
We are now in a buyer's market. There are more opportunities in the market for the savvy than ever before.