2023 median prices came in at $1.2 million, significantly below the 2022 median prices of $1.3 million. While that seems like a big shift, the real story is an old one - the big adjustment happened well over a year ago in the transition from Spring 2022 to Fall 2022. For the last 3 months of 2022 the median price was $1,210,000 and for the last 3 months of 2023 the median price was $1,225,000... essentially unchanged. The reality is that 2023 was a flat market with normal seasonal shifts.
To jump to the latest monthly figures go to our Novato Monthly Update page.
For a free professional estimate of your home's value go to our Get My House Value page.
A look at the numbers:
Since 2000 median home prices in Novato have increased 168%
Since 2005, the former peak in prices, home prices in Novato have increased 50%
Since 2011, the bottom of the market, home prices in Novato have increased 123%
In 2023, Novato median prices decreased 7.5%, to $1.2M.
Median prices slipped to $1,203,000 in 2023
From a "median price" perspective that sounds like a significant drop, but year-end prices in 2023 are almost exactly where they were at year-end 2022. The median in 2022 was driven higher by the prices in the beginning of 2022, so the significant decline in values actually happened in Fall 2022, not in 2023.
2023 year in review
Inventory was at historic lows and high buyer demand drove prices up in the early part of the year. The Fall surge in interest rates saw many Buyers leave the market and prices retreated back to Fall 2022 prices. Both Sellers and Buyers perceived it as a tough year and the net result was much fewer sales than normal.
All in all 371 houses sold in Novato in 2023, which is well below the historical norm of around 500. A big change from 2022 when 475 houses sold, and a huge change from 2021 when 633 houses sold. Anything in the 450-550 range is normal.
With a doubling of interest rates this past fall, affordability reached an unsustainable level for many buyers. Both from a data perspective and a feet on the street perspective, it appears buyer demand will remain soft. It's possible we could see a further softening in prices, particularly if the economy enters a recession, which some economists are predicting. It's also possible the expected lower interest rates in 2024 drive prices back up. In reality however, the most likely scenario, baring a major macroeconomic shift is fairly steady prices and a slight increase in inventory and transaction volume - not very exciting, but we like to keep it real, even when it doesn't make for dramatic headlines.
Visiting the economic round table of "experts", Danielle Hale (Realtor.com chief economist) predicts a 1.7% decrease in 2024 (she predicted a 5.4% rise for 2023), Redfin predicts a 1% drop in 2024 (they predicted a 4% drop in 2023), Lawrence Yun, National Association of Realtors, predicts a rise in home prices of 0.9% (he predicted 0.3% rise in 2023), CoreLogic predicts a 2.5% rise (they predicted a 2.8% rise in 2023), Zillow predicts a 0.2% fall in 2024 (they predicted a flat market in 2023). All these are national predictions. And while it's fun to speculate, they all got it wrong in 2023 so that may happen again! It should be noted that more "affordability challenged" Bay Area markets carry more conservative outlooks by most economists.
Below is a deeper dive into some of the Novato data you'll only find only here at Burdell Real Estate.
Here's a look at the dollar per square foot changes:
Dollar per square foot ($/sq ft) is an important metric in assessing values. Here we see that $/sq ft prices have tracked sales prices, with a decrease of 5.5% from 2022 to 2023.
In our scatter chart, each point represents a sale in 2023. As is typical, $/sq ft price overall increases as home sizes decreases. The median overall for Novato in 2023 was $625 (vs. $661/sq ft in 2022). All segments had decreases with the exception of 4000-5000 sq ft houses, which had strong gains (although with a relatively small number of sales in that segment, larger fluctuations are normal). Prices commonly fluctuated between $400/sq ft and $900/sq ft.
Prices vary based not only on size, but neighborhood, upgrades, condition, yard, views, style, neighbors, traffic flow, staging, and agent marketing skills.
It's always hard to predict any market, whether it's the stock market or the real estate market, but it remains true that over the long term the trajectory is always up. When you're planning to call somewhere home for the long term and you have the ability to enter the market, it's usually a good move. We're here to help you find the perfect place when the time is right, or help you through the selling process when life calls for a change. Feel free to reach out to us at any time.
For an up to date look at the current market go to our Novato Monthly Update page.
For a free professional estimate of your home's value go to our Get My House Value page.
As an aside, Agents usually need 3-6 weeks to bring a house to market, so NOW is not too soon to reach out if you are thinking of selling this Summer, or even further down the road. In fact, savvy Sellers contact us early, providing a running start, which in turn, allows them additional time to begin the process of purging and packing (no easy feat). In short, the sooner, the better for everyone involved.
If you ARE interested in selling your home this calendar year, we're here to help you manage the process and achieve your goal. Please reach out if you'd like an accurate assessment of your home's value.
926A Diablo Ave, Ste 347, Novato, CA 94947