Marin County Housing Market Forecast for 2022: San Rafael, Novato, etc.

The real estate market in Marin County, California has been highly competitive over the past year or so. Housing markets in Novato, San Rafael and other cities experienced a surge in home-buying demand unlike anything we’ve ever seen before.

Now, however, it seems that the Marin County real estate scene might be slowing down a bit. Recent reports have shown a decline in home sales in the area, which could be the start of a long-term cooling trend.

Even so, housing market forecasts for Marin County and the broader Bay Area suggest home prices will continue to climb for the foreseeable future. That’s largely due to tight inventory conditions, as mentioned below.

Marin County Housing Market Cooling Down

Shortly after the initial COVID-19 shutdowns of spring 2020, the U.S. real estate market shifted into turbo mode. Suddenly, a lot of people had new motivation to relocate for additional space, home offices, and other amenities.

This trend accelerated the Marin County housing market, as well. Real estate activity in Milly Valley, Novato, San Rafael, and other cities across the county surged during the latter half of 2020 and into 2021.

As of fall 2021, however, the Marin County real estate market seems to be cooling down a bit. (The same is true for many cities across the U.S., in fact.) A recent report showed a decline in home sales in places like Novato, San Rafael and Mill Valley.

On October 18, the California Association of REALTORS® (C.A.R.) published a housing market update with data for the entire state. It also drilled down to the regional and county level, offering a wealth of local insight.

Among other things, this report showed that homes sales within the Marin County real estate market have slowed down in recent weeks. In fact, Marin was one of only three California counties where sales dropped by more than 30% in September 2021 (compared to a year earlier).

Existing single-family home sales in Marin County declined by 39.2% in September, when measured year-over-year. For perspective, home sales statewide declined by 10.5% during that same 12-month period. Sales within Marin County were also down at the monthly level, falling by around 14% from August to September of 2021.

What’s the Real Estate Forecast for 2022?

Despite the recent slowdown in home sales activity, forecasts for the Marin County real estate market in 2022 remain positive. Home prices in cities like Mill Valley, Novato, San Rafael and Larkspur continue to climb — and will probably do the same next year, as well.

A recent forecast from Zillow predicted that the median home value for the San Francisco-Oakland-Hayward metro area (which includes Marin County) would rise by more than 8% over the next year. This forecast was issued in late October and extends into the same month of 2022.

They didn’t offer a specific forecast for the Marin County real estate market. But prices there could rise even more over the next year, due to an ongoing inventory shortage.

Tight Inventory Leading to Big Purchase Offers

While housing supply remains tight across most of the Bay Area, the downward trend has been most noticeable within Marin County.

According to the October 2021 C.A.R. report cited earlier:

Three out of five counties reported by C.A.R. declined in active listings from last September, with 24 of them dropping by 10 percent or more year-over-year. Marin had the largest decline in supply from a year ago, falling 52.8 percent from September 2020.

This means there are far fewer homes on the market this fall compared to last year. So it’s still a challenging real estate scene from a buyer’s perspective.

Another recent report showed that Marin County had about a 1.2-month supply of homes for sale in early fall. That’s much lower than what’s considered to be a “balanced” real estate market. So, like much of the country, the housing scene in Marin still favors sellers over buyers.

This real estate market also stands out when it comes to purchase offers. Over the past couple of months, more than half of all homes sold within Marin County ended up selling for more than the original list price. The percentage was especially high in Novato, where buyers are competing fiercely for limited inventory.

Buying a Home in 2022

Are you planning to buy a home in this area sometime during 2022? Here’s what you should take away from all of these reports and data:

• Housing market forecasts for Marin County and the Bay Area suggest that house values will keep climbing for the foreseeable future.
• Tight inventory and steady demand from buyers is putting upward pressure on prices.
• In terms of home sales, the Marin County housing market appears to be cooling down a bit.
• When house hunting, you might have to be flexible with regard to location, size and features.
• Housing supply in the county has declined sharply over the past year or so.
• So it’s still a seller’s market, especially when it comes to inventory.

Disclaimer: This article includes forecasts provided by third parties not associated with our company. Housing-related predictions are the equivalent of an educated guess and therefore far from certain.