Homes like this led the market last year.
The Market Overall
In 2007 the average sale price of a Marin County land home hit an alltime high of $1,223,678.00, and then plunged approximately 30.9% over the next four years of recession.
As we all know, the market is recovering, but at the end of 2014 the average sale price had not yet gotten back to that 2007 high.
It reached $1,189,166.00 for the year. Close!
In March, 2015, the average adjusted sale price reached $1,256,865. The new high! Will it stay there? I think so. There is a lot of pressure on home prices. Even in a recession, Marin (and much of the Bay Area) can experience high demand because the area is so desirable. Add to high demand a currently acute shortage of sup ply and it becomes hard to see where prices can go other than up. It appears this year the market has recovered the approximately 30.91% (mean sale price) lost during the 4+ years of recession.
Now, barring some potential catastrophe, I think prices will continue up.
The buying pressure is increased by the high income, well financed buyers out there. And cash trumps! In the many multiple offers on land homes, the advantage is with the cash buyer. It’s a big one. Any buyer who makes an offer with a loan contingency has to get an appraisal that satisfies the lender. Overbids are frequent. Some of the overbid homes may not have good comparables that justify the higher sale price for the lender. Cash offers can remove that uncertainty for the seller. No appraisal needed! For almost every land home that comes on the market there is a pool of buyers waiting with their agents to jump in and get into some tough multiple offer competitions. At times it’s not nice.
The Floating Homes Market
Competitive multiple offers are very rare on Floating Homes. Our market is a tiny niche in the overall home market. There are thousands of land home buyers out there, with hundreds of agents working with them. There are fewer than 500 legal Floating Homes in the area and just a few realtors who are knowledgeable about them. Almost everyone knows about land homes. Few people start out knowing much about Floating Homes.
Most buyers of Floating Homes have to learn about the lifestyle: not owning the land and leasing the berth, lease terms, loans, and a different way to hold title. Just having to lease berth space is off putting until they learn of the security we have under the law. What we as agents have to do is attract new potential buyers who are curious and intrigued enough to go through the learning process.
Quite a few buyers do learn about Floating Homes through friends. I think that is the best way to become acquainted with the lifestyle and to appreciate it. For those who are first exposed to them at an open house or Floating Home tour, the selling agent must be prepared to do the job. That is why it is important to use agents who are experienced with Floating Homes and, best of all, have lived the lifestyle. The big hurdle for new Floating Home buyers is that first exposure.
Smaller homes sold last year as well.
Floating Homes did much the same as land homes during the recession. They dropped just under 30%, but have gradually recovered since. In 2013, the average Floating Home sale price was $547,562. This was up from $414,000 in 2012. In 2014, the average sale price was up to $623,800. In 2014 we finally reached and surpassed the prerecession high of $604,474 in 2007. It looks like prices are continuing upward.
Through April of 2015, with 8 sales reported, the average sale price is $788,143; an increase of 26% based, however, on only those 8 sales. Four of the sales were over $800,000.
At this writing there are 8 Floating Homes on the market. Most are priced less than this year’s average sale price, and if they all sold at full price it would lower the average for 2015. I do expect more to come up for sale and the average sale price to fluctuate. The high price of the year was $1,490,000. The low was $250,000.
Some Personal History
When I bought my first houseboat in 1970, I paid $3,250.00. (The deal was done in Smitty’s Bar with the agreement written on the check for a 2bedroom, 1bath on wood pontoons.) Five years later, after my son Curtis (whom most of you know) and I gussied it up, we sold it for $22,250 to someone who is a friend to this day. Approximately five years later he sold it to a woman who, among many interesting things, had a 38 police special and taught gourmet cooking. She paid $79,000. It wasn’t much changed.
This is what happened to average prices in Marin every 5 years from 1975 to date:
Mean Sale Price (MSP):
- 1975 $ 64,215
- 1980 $ 168,508
- 1985 $ 200,557
- 1990 $ 379,581
- 1995 $ 397,069
- 2000 $ 722,780
- 2005 $1,078,819
- 2010 $ 904,818 (recession drop)
- 2015 $1,256,865 To date.
This kind of appreciation is such a far cry from when we purchased our first home in San Jose in 1962 for $12,000. We were told by the agent we would likely have to hold on to it for 5 to 7 years just to get our purchase price back!
There is a serious shortage of housing in the Bay Area and it is one of the most expensive housing markets in the country. There is also scant inventory of Floating Homes. If you’re selling your home and plan to stay here, you will get a high price but will pay a high price for your next one! If a few months go by between selling and buying, you will likely pay more yet for a new house. If you were moving to some other areas in the state or the country, you could benefit greatly. Are we in a bubble again? Maybe. But the bottom line is that we are in such a desirable part of the world that recovery seems almost inevitable. I suspect only a profound economic reversal or natural catastrophe would change things. But it may just get us back nearer to normal?