 |
 |
 |
 |
 |
 |
 |
 |
Press Release
|
Foundation Homes Study
Reveals Split in High-end
Luxury Rental Market Foundation Homes International (FHI) today released the results of a comprehensive study of the high-end rental market in Marin County that revealed mixed results for owners and renters of single family homes (SFH). At the top of the market, properties renting throughout Marin County for $8,000 and more per month, rents increased 3.68% from 2016, while overall rents in Marin in the SFH category were relatively flat in 2017. Some quarters in 2017 even fell short of those averages seen in 2016. A notable trend in the $8,000+ segment during this past year was the upward movement in the price of rents per square foot in each quarter, compared to 2016 when rents measured similarly were significantly down from the first quarter to the fourth quarter (Q1, $3.30 per square foot vs. Q4, $2.91 per square foot). In 2017, first quarter rents for properties priced $8,000 or higher were at $3.17 per square foot, but ended the year at $3.61, up 13.8 percent. “The quick judgment,” said Christopher Barrow, FHI co-founder/co-managing director, “was that the increase was a result of the demand from homeowners displaced by the North Bay fires. However, our data indicates that most of the increased activity occurred in Northern Marin, where rents typically are lower and few properties are in the top end of the market ($8,000 and up).” Even taking the fire-related movement, Northern Marin remained relatively steady in activity and pricing after a quick upturn. Not so in Central to Southern Marin (Sausalito, Mill Valley, Tiburon, Belvedere as well as Kentfield, Kent Woodlands, Ross, Larkspur, Corte Madera, San Anselmo and Fairfax), where rents saw a steady uptick.” (Q1 $2.79 per square foot vs. Q4 $3.07 per square foot.) Foundation reported that the average days on market for rentals in this geographic area remained flat, although they increased from 43 to 57 days from 2015 to 2017, indicating that while prices were slightly higher, it took longer to fill vacancies last year than the two previous years. The FHI study also noted that in the three-year period of 2015-17, rents across Marin in the SFH category were up 3.45 percent while in the $8,000 and up category the increase was 10.46 percent over the same period. Foundation Homes has more than $100 million in residential real estate assets under management in Marin County. “Although we have been in the luxury home rental business for over a decade,” said Darcy Alkus-Barrow, FHI co-founder/co-managing director, “this is the first comprehensive study that we have conducted, and to our knowledge, is the first relevant one done for Marin County’s specific luxury, single-family home segment. Most rental pricing studies are performed with data drawn from the multi-family apartment market. It’s just not relevant for the segment of the market where our clients operate.” Christopher Barrow, also the firm’s Broker, adds, “The general view of Marin is that it is expensive and getting increasingly so. What we found is that the county cannot be viewed as a single rental market, either by geography or by price category. While this county is priced higher than most other counties in the state, single family home pricing trends do not always step in tandem with the apartment community data. However, the key factors that determine price and value in the high-end rental market are predictable.” They are:
He noted also that “flat, useable land” is much more of a factor than gross acreage. “People who live in Marin have very specific criteria,” he said, “and they are both willing to pay for it and to take their time until they find what they want.” The result is that there is high demand in specific zip codes for specific types of homes and, like the sales market, relatively low inventory. The Barrows suggest that if an investment property does not currently fit the model that attracts the highest rent, there are factors a landlord can control to increase the value of a rental in Marin: updating the kitchen, improving the outdoors space for entertaining and/or for families, and replacing the paint scheme with modern greys and taupes. Approximately half of Foundation’s overall properties are for rent in the luxury segment. Overall in the high-end market, Foundation says that both supply and demand remain fairly predictable year over year, driven both by outside economic market conditions and seasonal demand. Foundation examined single family homes (excluding condominiums) primarily from the Central to Southern Marin County market, and drew its data from FHI proprietary internal information, Zillow/Trulia and BAREIS Multiple Listing Service (MLS). About Foundation Homes International Foundation Homes International (www.foundationhomes.com) is a full service property management, real estate sales and relocation firm, serving Northern California. Foundation Homes has more than $100 million in residential real estate assets under management in Marin County. Founded in 2010 by the husband and wife team of Christopher Barrow and Darcy Alkus Barrow, Kentfield-based Foundation Homes offers a full suite of real estate services from property management and analysis to lease and sales negotiation. The firm employs web-based technology to support delivery of services by a hands-on team of experienced professionals. The firm’s telephone number is (415) 507-9600. |