North Bay Real Estate: The Marin, Napa & Sonoma Markets

January 2014 Market Report

The real estate market recovery started in earnest in 2012 and then went red hot in spring 2013, which resulted in an additional, big, fast jump – approximately 20% – in home prices. After the spring peak, the market calmed somewhat in the second half of the year and prices stabilized, but buyer demand remained very strong by historical standards. Economic conditions have continued to improve, household net worth has increased dramatically with rising stock and housing markets, foreclosure rates and distressed property sales have plunged, the second-home market has picked up, and interest rates, after jumping in 2013, are still relatively low. Though it is impossible to predict the future, these factors typically form the foundation of a healthy, active housing market.

In the next few weeks, new listings will start coming on market in quantity, buyers will get back in home-search mode and the market will begin to wake up after the holiday hibernation. Then we’ll start to get an inkling of what the new year has in store.

Median Sales Price Appreciation, 2011-2013

This first chart above gives an idea of the scale of the rebound in home values since the recovery began about two years ago. Median prices are affected by other factors besides changes in value, and different areas experienced bubbles and crashes (and now recoveries) of different magnitudes. Median sales prices are generalizations and changes in them should be considered very approximate indicators of appreciation, but by any measure there has been a huge recovery in North Bay real estate values.

Comparative Dollar per Square Foot Values


Generally speaking, though certain areas of San Francisco and San Mateo are even more expensive, Marin County has the highest overall median home price of any county in the state, so it’s not surprising that many of its cities rank at the top of this scale of average dollar per square foot values. Typically (but not universally), the farther one gets from the city, and now, to some degree, from Silicon Valley, the more one gets for one’s money. North Bay homes are often terrific values when compared to the even more ferocious market in San Francisco itself.

Median Home Prices by City

A comparative look at median sales prices throughout Marin, Napa and Sonoma counties: As with dollar per square foot values, the ultra-expensive, boutique market of Belvedere comes out on top.

North Bay Home Sales by Property Type

Unlike San Francisco, where condo, co-op and TIC sales now significantly outnumber house sales, in Marin and the Wine Country, houses are by far the dominant property type.

Luxury Home Sales

One of the big dynamics of the current market recovery, along with the huge decline in distressed home sales, has been the dramatic increase in the number of high-end home sales – with some very big sales occurring. Belvedere’s highest sale, at $24.5 million, beat the biggest sale reported to San Francisco MLS in 2013, which was a Pacific Heights mansion for $18 million. The largest sales in Napa and Sonoma involved luxury homes, big acreage and vineyards.

Luxury Home Sales by City

This chart gives an idea of where many of the luxury home sales occurred. This is not a comprehensive list of North Bay cities, simply a sampling.

Home Sales by County

In the North Bay, Sonoma is by far the largest market, though it is somewhat smaller than San Francisco’s. As a point of comparison, each of the East Bay counties of Alameda and Contra Costa sell almost as many homes as Marin, Napa, Sonoma and San Francisco combined: Much of this points to where new housing construction was allowed to occur in quantity over the past 20 years.

Mortgage Interest Rates

2014 started with a 30-year conforming interest rate of 4.5%, which is about a full percentage point above the historic lows one year ago. This affects the cost of homeownership significantly (if one is getting a loan), but the rate is still quite low in the context of the past 30 years.