As February came to a close, the long economic recovery was at last reaching Americans’ pocketbooks; the Labor Department confirmed average hourly earnings jumped 2.9% from a year earlier and the number of Americans filing first-time claims for unemployment is now at its lowest level since 1969. Executive surveys showed historically high optimism. The ongoing stream of positive news about tax cuts, higher wages, bonuses and 401k increases had continued unabated fueling Stocks at the expense of Bonds and sending interest rates higher in anticipation the Fed will be forced to raise interest rates to counter inflation.
In the first week of March, this trend was abruptly interrupted with unexpected news of steel tariffs, and what some economists fear is the beginning of a trade war. The uncertainty has sent some shock waves through the stock market as business leaders wait to see if the announcements will be tempered with less impactful measures.
Once the markets stabilize, interest rates will likely rise. While it is only natural to view increases in interest rates though a negative lens, it’s important to remember higher interest rates are a direct result of an improving economy, and ultimately a strong economy is the leading driver of real estate sales.
The February real estate market was largely the same as the previous February, with growing seasonal inventory. Buyers appear to be actively seeking homes and there is some indication that the tax reform has emboldened buyers in the high end of the market. This is not surprising—prices are up nearly 10% from the previous year, with an average single family home price over $1.5 million. The number of sales over $2 million are up 14% from last year.
Number of Homes Sold
The number of home sales in February was down 7% from last month, which is to be expected as February is one of the slowest months of the year. The number of home sales this February was 75, down 3% from February last year.
Average Price Sold
The Average Sale Price of Marin Single Family Homes remains relatively unchanged, though down slightly in February, by 1%, compared to January. When compared to the same month last year, Average Sale Price increased 10%, to $1,542,952.
In Contract by Area
Larkspur had the highest percentage of Homes in Contract in February (71%), followed by Corte Madera (57%), Greenbrae (50%) and San Anselmo (50%). Less active markets included Belvedere and Sausalito, each with less than 10% of Homes in Contract, and Ross with none.