Working as a full time Realtor since 2004 I’ve gotten to know a lot of Realtors here in Marin County. Of course, most have come and gone, since only 13% still in the business after 5 years (https://www.tomferry.com/blog/87-of-all-agents-fail-in-real-estate/). Attrition is high, and maybe that’s part of why people become bearish on the sector?
I’m a bear when it comes to commercial real estate. Commercial has suffered greatly since the pandemic. Vacancies in San Francisco and Seattle are currently over 20% (https://www.commercialedge.com/blog/national-office-report/) and it’s not like these cities are becoming more attractive to America’s corporations. There are issues with homelessness, in cities both big and small, that are keeping people from shopping in stores. Why deal with the blight when what you need is just one click away from your home computer?
While some companies have been coming back to their offices, notably Twitter/X in San Francisco, many are still allowing people to work from home. As long as they are getting their work done, why do employees need to come to the office? Sure, insecure owners might want to keep a watchful eye over their employees, thinking that if they don’t know what people are doing, they are assuming their employees are doing nothing. That’s just a really poor approach to management. Driving into offices increases congestion and pollution, not to mention keeping large, underutilized offices only adds to overhead and reduces profits. Nonessential office space will be going away and vacancies increasing in the next 10 years. That train has left the station and there’s no turning back.
Residential real estate sales are another story. That’s my realm, where I’ve lived, breathed and thrived. I remember when I bought my first condo in 2000 my Realtor told me, ”Prices never go down in Marin.” I knew that was BS when I heard it, but it didn’t stop me from getting into the market and buying my own place. What she should have said was, ‘Prices never go down in THE LONG TERM in Marin.’ My parents purchased their home in 1962, and when I sold it earlier this year it had gone up in value over 50 TIMES! I purchased and sold two condos, made good money on both, then rented when the market went down from the Great Recession. I finally purchasing a single-family home when I could afford it. I plan on being in this home for a long time, and it has appreciated significantly since I bought it. Like many people in Marin, it’s become part of my retirement nest egg.
I am a long-term real estate bull. I’m also a realist, and I know the market can go down, but I also have seen that every time it goes down the market comes back a lot higher. The key is to purchase something you like and can afford. Realize that in time you are going to (a) want to do updates (b) need to do updates, which feeds into the ‘can afford’ part of the equation. Most homes in Marin were built more than a half century ago, and many have not been updated. That’s okay. These homes have served their purpose and will continue to do so.
We have a high quality of life in Marin County. Close to the beaches, a short drive down 101 and across the GG Bridge to the City, with great weather and a natural rain maker in Mount Tamalpais we kinda have it all here. I’m grateful to be a Marin native, for all the joy and the success living and working here has brought me. Of course, I’m bullish on residential real estate in Marin County. How could I not be?