What’s the Marin County Housing Market Forecast for 2021?

The real estate market in Marin County, California appears to be heating up. This is partly due to an increased number of residents relocating out of neighboring San Francisco.

According to the latest data from the California Association of REALTORS® (CAR), Marin County experienced a significant increase in both home sales and prices during July 2020. This suggests that there is strong demand from buyers in the area.

What’s the forecast for the Marin County housing market over the coming months?

Increasing demand and limited inventory will likely put upward pressure on home prices, through the end of 2020 and into 2021. Buyers will have to outfox one another, due to tight supply conditions. The luxury real estate market, in particular, could face increased competition.

House Values Still Climbing in Marin County

According to an August 17 report from CAR, home prices and sales increased across the Bay Area from June to July 2020. Sales and prices have also increased over the past year, despite the ongoing coronavirus pandemic and economic shakeup.

But some real estate markets are seeing more activity than others.

In this latest housing report, Marin County was singled out as having the biggest home-price increase from July 2019 to July 2020. According to CAR data, prices in the county rose by a strong 23% over the past year or so. Contra Costa County also saw a significant year-over-year increase, with house values rising by 18.9%.

San Francisco had the lowest year-over-year price increase, at 4.1%.

Strong Demand Has Boosted Home Sales

The Marin County real estate market was also singled out in terms of home sales. According to the CAR report, sales of existing single-family homes were strongest in Sonoma and Marin counties. Both counties experienced a 36% increase in sales from July 2019 to July 2020, a much larger gain than most parts of the state.

Napa County also saw a sharp rise in home sales, up 28% in July over the prior year.

Once again, San Francisco was the weakest performer in the Bay Area. Home sales within San Francisco city and county rose by a meager 1.4% year-over-year, significantly less than places like Sonoma and Marin.

Are Buyers Looking for Room to Spread Out?

As we’ve written in the past, recent reports and anecdotal evidence suggest that more and more home buyers are shying away from crowded city centers in favor of suburban and even rural housing markets.

While it’s just across the bridge from San Francisco, Marin County offers buyers the chance to escape the urban density of the city. There’s a bit more room to spread out in a place like Marin County, when compared to a compressed and condo-heavy real estate market like San Francisco.

And this appears to be attracting buyers in droves. According to Edward Lynch, Vice President of the Compass real estate company, the local housing market is hot right now.

“Many properties [in Marin] are receiving multiple offers, and in some cases, we are seeing the sale price 20-25% higher than the original list price,” Lynch said. “If the property checks the boxes and meets the buyer’s needs it will sell very quickly and many times it will sell off-market with multiple offers.”

A ‘Trifecta’ of Factors

According to Jeanne Radsick, current president of the California Association of REALTORS, there are three primary factors driving competition in California’s real estate markets.

As she stated in a recent report: “A housing market trifecta of strong pent-up demand, record low interest rates and a renewed interest in the value of homeownership bolstered in July’s home sales.”

As a result of these and other factors, one could make a positive forecast for the Marin County housing market stretching into 2021.

For one thing, a supply and demand imbalance is putting upward pressure on home prices. Marin County has a very low level of homes for sale right now, relative to the number of buyers who are in the market seeking them. Additionally, housing demand in the county could increase over the coming months, due to the trends noted above.

Low mortgage rates are also playing a role here. A few weeks ago, the average rate for a 30-year fixed mortgage sank to its lowest level in 50 years, dropping to 2.88%.

Rates have risen a bit since then, but they are still incredibly low by historical standards. This has increased housing demand and boosted home sales and prices in many housing markets across California and the nation.

Marin County Housing Market Forecast for 2021

So what’s the forecast for the Marin County housing market through the end of 2020? And what can home buyers expect in early 2021?

In a word, competition.

With tight supply and steady demand from buyers, the Marin County housing market will likely remain fast-paced and competitive over the coming months.

Of course, that’s a forecast and not a fact. No one can predict future economic or real estate conditions with complete certainty. But based on what we know about supply and demand conditions right now, it seems likely that home prices in Marin County will hold up through the current economic and public health crisis.