When it comes to the wild ride of Bay Area housing values, it’s a bit like trying to predict the weather, but for real estate.
So, let’s rewind to August, shall we? In hindsight, the regression in Bay Area housing values might have hit rock bottom in January. It’s like the housing market took a deep breath, and now it’s catching its footing. Take a look at the graphs we just updated. They clearly show the pandemic peak, interest rate created trough, and, more recently, the rebound. Let’s just hope it’s not a dead cat bounce…
Now, fast forward to today. The market appears to have found its groove again.
San Mateo County, as a whole, might still be lagging behind last year’s numbers, but it’s not lagging by much. It’s like a marathon runner who’s still going strong despite a few stumbles.
New listings in August aren’t all that different from a year ago, but they’re a far cry from the frenzied peak of the pandemic housing demand. Yet, they’re higher than the relatively calm days of 2019, before the housing rush began. It’s like a pulse on a heart monitor – steady and reassuring.
Now, let’s dive into the nitty-gritty details. Price per square foot, days on the market, and other categories are pretty much holding steady. But here’s the twist – sellers are getting a bit more bang for their buck, with the percentage of the asking price going from 101% to 103%. Sellers that have been standing pat seem to be winning.
And here’s where things get really interesting, especially in Belmont. While the number of new listings in Belmont is still down by about 30%, sales are on the rise. The months of inventory have plummeted from 1.1 months to a mere 0.6 months. That’s like a clearance sale – blink, and it’s gone!
Our market peaked in May of 2022, began a slow slide until it hit bottom of that year in November, before regaining its traction and the slow pace of recovery.
Now, let’s talk about home prices. At first glance, it might seem like they’ve only inched up from $2,150,000 to $2,180,000. But here’s the catch – the devil is in the details.
Homes that sold a year ago were 11% larger but sold for 1.3% less. So, in Belmont, you’re paying 1.3% more for a home that’s 11% smaller. It’s like buying a sports car with a smaller engine but a higher price tag.
And if you really want to see the story, look at the price per square foot. It’s gone up by a whopping $63.00 per square foot. Multiply that by the average square footage of 2,000, and you’ve got yourself an extra $126,000 tacked onto the price of a home compared to last year.
We anticipate that the peak of interest rate hikes is in the rear-view mirror—for now. This should lead to more buying activity which could continue to drive up prices.
Nevertheless, should sellers find themselves spurred to action by the enticement of reduced interest rates and an escalation in property valuations, it poses a plausible scenario wherein appreciation may be constrained. If so, the future trajectory remains inscrutable, uncertain whether the current course will endure or diverge into an unknown.
So, there you have it – the dramatic twists and turns of the Bay Area housing market. It’s like a suspenseful novel where each page reveals a new surprise. Who knows what the next chapter will bring? Buckle up, because this real estate ride is far from over!
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
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The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Drew Morgan—Broker Associate 01124318 | Christine Morgan—Sales Associate 01174047
CEO & President of Morganhomes, Inc. Real Estate licensed under RE/MAX Star Properties 01811140
