Watch a video version of the Fairfax Market Report for a detailed discussion, or read Blaine’s analysis below. You can also view detailed reports for Fairfax neighborhoods on our Fairfax Real Estate page.
Fairfax continues to be one of the more resilient communities in the Marin Real Estate Market. Fairfax enjoyed another bounce-back year in 2010, with 73 single family homes sold, which represents a 12% increase in number of homes sold over 2009, and a whopping 28% increase over the 57 single family homes that sold in the most difficult year of 2008.
For our townhome market, 7 townhomes sold in 2010, which is a 250% increase over the 2 townhomes that sold in all of 2009.
As I have said in the past, my prediction has been that the bottom of the Fairfax market occurred in the March/April timeframe of 2009, and prices have been largely flat since then. Some months up, some months down, but largely flat.
For 2010, the average price of a single family home in Fairfax was a little over $675,000 (and I took out two sales to arrive at this number, two “teardowns” that are not habitable…one of these wasn’t even a home but rather a foundation with several parts of a burned down house above it). This number was little changed from the $677k number in 2009, down just 3/10ths of 1 percent…flat.
The median number was actually down 7%, down to $615,000 from $660,000. I discount the median price a bit this year, as there were a disproportionate number of lower-priced homes that sold, and all of the distressed properties were at the lower end of the market. Further, a number of investors in need of money dumped their very old and deteriorated rental homes on the market at very low prices in an effort to raise cash at the beginning of last year.
The segment of the market known as distressed properties remained flat in 2010, with 10 distressed sales, representing a little under 14% of the sales. This is the same number of distressed sales as 2009. If you want to read the tea leaves on this segment, foreclosures were up from 3 to 6, and short sales were down from 7 to 4. While foreclosures are bad, they represent the last stage of the foreclosure process, while short sales occur at the beginning. Fairfax has seen much less short sale and foreclosure activity than some of our neighboring communities.
Several encouraging developments occurred last year in Fairfax, including a notable uptick in activity in the higher end of the Fairfax market. In 2009, it was very difficult to sell a home over $700-800k in Fairfax, mainly due to an inability to secure jumbo loans as the banking system unwound from the financial crisis of 2008. As 2010 unfolded, the loan market in this end of the price spectrum loosened up considerably, and thus the higher end of the market did as well.
Also staging a recovery of sorts was the hillside market, which was really in the doldrums in Fairfax last spring. In fact, at the end of the spring of 2010, only about 10% of the homes that had sold YTD could be classified as “hillside”. The hillside market generally represents about 35-40% of the market. The hillside market rebounded in the 2nd half, and over 26% of the homes sold were hillside homes.
The hottest neighborhoods were Marinda Oaks, Oak Manor, and the Cascades. Downtown and Deer Park remained steady…both would have sold more if there were more inventory in those neighborhoods. Manor Hill experienced an unusually tough year with only 5 sales…which highlights the recent difficulties in the hillside market.
Looking forward into 2011, I see continued strengthening of the Fairfax market. There is much more energy in the market this spring than last…last year all anyone could talk about at this time was a ‘Double Dip’ recession. That chatter has ended. Tthere is a bit of pent-up demand in the middle segment of the Fairfax market ranging from $600-800k. While the first-time buyers at the entry level homes fueled the market in late 2009 and much of 2010, the buyers in the next rung up the price ladder have been more cautious. They began to come back last year, and I see that trend continuing. I see another incremental year of sales increases, perhaps in the single digits on a percentage basis. But as the mid-range buyers take over the activity from the entry-level buyers, we could finally see a bit of appreciation across the board, and I hope to see a low-single-digit uptick in the average and median prices of homes in Fairfax.
It’s also going to be a more balanced market, as sellers finally have come to grips with the actual value of their homes and homes are being priced at their fair market value. Interest rates are still terrific, still under 5%. With the economy continuing to improve, we may see the threat of future rate increases which in the short term may push some buyers to finally make the decision to buy.
And remember, during the first decade of the new millennium, Fairfax had the highest appreciation on a percentage basis, by far, in all of Marin County. It is popular with the traditional ‘Fairfax crowd’, but it’s also among the most popular communities in Marin for young people and young families. This is a trend that will continue.
I wish all of you a safe and prosperous 2011!