April 2006: Novato’s bottom line was as high as it would ever get. There were 39 single-family homes sold in Novato that month at a median price of $889,000. Condos? There were 38 sold with a median of $445,000.
It was the best of times (for sellers), it was the worst of times (for buyers and some stressed-out Realtors). It was a time of optimism. It contrasted severely with the present.
April 2011: Five years later, Novato’s single-family homes have lost 37 percent of their value, and condos are down 35 percent. It is widely acknowledged to be the worst of times, with no end in sight.
Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.
In fact, the optimism that was creeping back into the market this time last year has disappeared. Instead, we are calling April 2011 evidence of a “double-dip” in housing values.
Admitting that now is not the local real estate market’s finest hour, let's focus instead on the silver lining to this particularly dark cloud. Last week, the public considered the latest site proposals submitted by the City Manager’s Housing Ad Hoc Working Group. The city is considering nine possible sites for state-mandated affordable housing units, down from the 13 originally proposed.
Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.
Once again, the mood at the most recent meeting was tense. Affordable housing has become Novato’s most contentious issue, which on one level is ironic. Thanks to the real estate market collapse of the past five years, Novato now has plenty of affordable housing.
As of June 2, there were four active or pending condominium listings in Novato priced under $100,000. There were 32 listed between $100,000 and $199,000, and 23 at the $200,000 to $299,000 price point. There were only five units listed above $400,000. The most expensive, $495,000 518 Entrada Drive #101, outpaced its nearest rival, three-bedroom 9 Cama Lane, by $56,000.
At the same time, Novato had 197 active or pending single-family residences, and 58 of them (29 percent) were priced less than $500,000. Next-door neighbor San Rafael had 193 total SFR listings. Only 27 (14 percent) were available for less than $500,000.
One of the eventual casualties of the real estate boom was the investment buyer. As for-sale prices skyrocketed, rents did not keep pace. “Income property” became an ironic term.
The good news now is that rents, while not where they were in 2006, have held up better than for-sale values. Over a two-day period (June 1-2), Craigslist had 34 total rental listings in Novato — six with one bedroom, 19 with two bedrooms, five with three bedrooms, one four-bedroom and one five-bedroom home. Here’s how they averaged out, rent-wise:
One-bedroom: $1,428 per month
Two-bedroom: $1,826 per month
Three-bedroom: $2,104 per month
Four-bedroom: $3,800 per month
Five-bedroom: $5,100 per month
If you plug those numbers into a mortgage — at today’s rates and considering a 20 percent down payment — you wind up paying roughly $275,000 for a one-bedroom, $325,000 for a two-bedroom, $360,000 for a three-bedroom, $700,000 for a four-bedroom and $900,000 for a five-bedroom home. If you’re looking to buy a zero-sum investment property in Novato, in other words, you’ve got plenty of options.
But you’d better do it quick. Regardless of whether the “double-dip” lasts or ends tomorrow, Novato’s bargain properties are disappearing quickly. More than half of those 36 condos priced under $200,000 are already in contract, as is 41 percent of the single-family homes listed for less than $500,000. For the long-term investor, Novato’s housing woes end at the front door.
