View the newsletter HERE!
Foundation Homes Property Management
High End Real Estate Rental Market Study Results:
Prices Steady; Days on Market Improving But Not in All Segments
A continuing study of the high-end, single-family home (SFH) rental market in Marin County reveals steady prices with a slight improvement in the days on market (DOM) measurement for the quarter that ended June 30, according the Foundations Homes Property Management which has produced the quarterly report for since 2015.
After the end of the first quarter (March 30), Foundation had cited tracking results that indicated a potential slowing of the market by year’s end. The most recent report suggests that weather might have had a larger than normal influence on the first quarter.
Marin home sales prices dipped in 2019 on a year-over-year basis, according to research firm Corelogic. The median price was $1.345 million in June 2019, down from $1.390 million in June 2018.
“The sales market and rental market both had an unusually slow start to the year with the extended rainy season. The sales market picked up speed though not necessarily price in the second quarter (Q2), which generally helps the rental market. Also, with mortgage rates remaining low, the sales market is having a seasonally late pop,” said Christopher Barrow, broker and co-managing partner.
Despite the dip in median home sales prices, stats for “All Marin” SFH home rentals were positive in Q2, based on study results. The average price per square foot improved approximately one percent to $3.02. In the same period of 2018, the average price per square foot was $2.98/sq ft.
“The good news was that the days on market (DOM) was significantly better was better than both Q1 and Q2 year-over-year,” he said. “In 2018, Q2had an average DOM 51. In the second quarter of 2019 (vs. 2018), there was an 18 percent improvement, reducing the DOM to 42.”
The luxury segment did not fare as well. For homes priced above $8000 per month, the DOM vs. was more than 100 percent longer, year-over-year. The Foundation study revealed that 2018 Q2 had just 24 DOM for the luxury segment vs. the 51 DOM average in 2019. The luxury segment traditionally performs best in Q2, but this year it took longer to lease and did not experience rental rate growth. Both results point to a slow down is on the way.
The key statistics for the second quarter of 2019:
- For all Marin SFH: Rents were $3.02/sq.ft, UP one percent.
- Average DOM was 42, an 18 percent faster rate than in 2018 and
- For high-end homes rental rates were DOWN two percent from last year and DOM increased 100 percent.
“As we move through the remainder of the year,” said Christopher Barrow, “the overall economy, particularly the stock market, and interest rates will be the key factors in Marin. We are still talking with our clients to be prepared for a slowdown or a softening of prices as the busy summer season (for rental properties) winds down.”
Foundation, which has $150 million of SFH property in Marin and San Francisco counties under management, drew its data from internal information, Zillow/Trulia and BAREIS Multiple Listing Service (MLS).
About Foundation Homes Property Management