As always, when contemplating the state of the Sausalito floating homes market, it’s helpful to understand the context of the larger housing market in Marin County, the Bay Area and the US. Keep in mind that the condition of the economy and the housing market could be greatly impacted by the overall consequences of the coronavirus, which has rattled markets around the world and resulted in a cascade of dire predictions about the economy.
For the overall US economy, 2019 was quite a good year. It grew at an annual rate of 2.1% in both the 3rd and 4th quarters. Personal income in California grew at 3.5% and the unemployment rate was hovering at a historic low, around 4%. How did these factors affect the Bay Area housing Market and, in particular, the sale of floating homes in Sausalito? I’m glad you asked, keep on reading!
Bay Area Housing Market
After years of healthy appreciation, Marin County median home prices decreased a bit in 2019. The Case Shiller Home Price Index for 2019 shows that home prices peaked in mid-2018. The Bay has had above-
average appreciation since 2012 when compared with the entire US housing market, Bay Area prices flattened in 2019 while the overall US housing market continues to appreciate at a slow, steady rate. UC Berkeley economist Ken Rosen expects Bay Area home prices to remain flat in 2020.
Housing Market Segment Performance
Since 2016, lower priced homes (and to a lesser extent mid-priced homes) have enjoyed greater appreciation than the higher priced market segment. While the performance of these segments relates to the overall Bay Area Housing market, a similar same trend of price appreciation and rate of sale is reflected in the floating home market.
2019 Housing Market Indicators
The key performance indicators show that 2019 was a cooler year for real estate. Properties stayed on the market for more days before selling, there were more price reductions, eventual sales prices were a smaller percentage of original list price, fewer properties had multiple bidding and there was more inventory than in recent years.
$/Sq Ft for Cities in Marin County
As always, though price per square foot is a useful, if elementary, metric for understanding property values, it does offer a useful a starting point for understanding value. Below is a summary of Bay Area Housing prices by $/Sq Ft.
2019 Sausalito Floating Home Sales
There were more floating homes on the market last year than there have been for quite some time. At one point, there were 16 listings on the market.
Below is a review of floating homes sold in 2019. The table illustrates that many were smaller, entry level homes. The ones that cost more had serious price reductions or, in the case of #24 Gate 6 1/2 Rd, were purchased off-market by people who were renting it. The transaction for #39 Issaquah was initiated in 2018 and closed on Jan 8, 2019.
2019 Floating Home Market Summary
The pricing on boats in the upper tier of the market was overly ambitious. This is demonstrated by the fact that higher priced homes only sold after significant price reductions and many days on the market.
Predictions for 2020
It’s anybody’s guess what will happen this year, particularly if we experience an economic chain reaction to the impact of the coronavirus.
Floating homes do generally take longer to sell, so it’s important to prepare a home for market so it looks its best and shines for potential buyers. The discussion above illustrates that the boats that sell more quickly for more money are the ones that catch people’s eyes and are move-in ready. It’s also important to understand the conflicting signals of not wanting to ‘leave money on the table’ and the very real consequences of having a list price that is too high. When the initial list price is unreasonably high, properties linger on the market and age. The longer properties are on the market, the greater the discount buyers expect. So, it’s important to remember that starting with too low a price isn’t the only downside in pricing. Starting with one that’s too high can actually result in a lower eventual sales price.
If you would like to have your property evaluated, discuss selling, the state of the market, the weather or your philosophical tendencies, please send an email or give me a call: Steve Sekhon, Compass Real Estate.