Belmont home prices slipped back a bit in the month of May 2011 while sales continued to be less than impressive.
Home sales in Belmont were down considerably from May of 2010 and for good reasonâ€”home sales last May were buoyed by the last minute deadline for the $8,000 tax credit which lifted sales across the nation. Our sales analysis for May of 2010 addressed the temporary nature of the uptick in homes sales for the month of May 2010.
Last year in May there were 34 home sales in Belmont as compared to only 15 this year. Thatâ€™s one less sale than last month and two less than in February. Looking at the big picture, over the last 13 years the average home sales in Belmont has been 25 for the month of Mayâ€”of course many of the last 13 years were boon years as well.
The median price for a home in Belmont for May 2011 was $949,000, an increase over April of 14% and an increase over last May when the median home price was $848,500. We could stop right there and change our headline but looking a little closer we see that the mix of homes which sold in these periods varied dramatically.
Last month, and in May of last year, the median size homes which sold were smaller than homes selling in May of 2011. Part of the reason for so many smaller homes selling last May was the $800,000 purchase cap to qualify for the $8,000 tax credit. This rebate lured many first-time buyers into the market but had an incidental effect of lowering the median home price with many smaller homes selling.
The median size home that sold in Belmont in May of 2010 was 1,845 square feet and in May of 2011 it had increased to 2,157. The increase of 312 square feet represents a 17% increase in the size of homes selling in the two periods while the increase in median price represents only an 11.8%. At the going rate of $478 per square foot in 2010 that could account for $149,136 of price differentialâ€”the actual differential in the two periods was only $100,500. This could loosely be translated into a real decline in median home price of $ 48,636 or 5.1% year over year.
While the median home price may have slipped back a bit the average time it took to sell a home dropped from 25 days in May of 2010 to 17 in May 2011.
Four sellers in May of 2010 lowered their asking price by on average $64,750 in order to attract a buyer while this May only one seller lowered their asking price by $30,000. These fewer price reductions might be attributed to sellers (and agents) pricing their home more accurately to reflect the current market conditions.
May of 2011 found sellers netting more than last year during the same period. Sellerâ€™s received 101.3% of their asking price this year as compared to sellers netting only 99.8% last May.
A correlative effect of pricing oneâ€™s home right is that offers will usually come in closer to the asking price. This May five (33%) of the home sales were under the asking price for on average $22,000, four homes sold at the asking price and six (40%) sold for on average $40,000 more.
In May of 2010 15 homes (44%) sold for on average $26,000 less than what the seller was asking, three homes sold at the asking price and 16 (47%) sold for on average $22,000 more than asking.
The peninsula market appears to be picking up some steam, though the numbers have yet to reflect what we see occurring locally.
Homes which are priced right are often snapped up within days with multiple offers while sellers (and agents) who push the pricing envelope quickly lose market enthusiasm and are more often than not relegated to months of marketing, open houses, showings and multiple price reductions before finding a buyer.
Weâ€™ve also noted that many more people are contacting us for rentals than in the past several years. This increase in demand for rental housing has created a shortage in the supply and rental units are harder to come by while rental prices are skyrocketing. And when rents rise (and the number of units unavailable to meet the demand) people look at purchasing as an alternative. We suspect that the peninsula housing market is poised for a rebound sooner than the rest of the nation but donâ€™t expect to hear about it in the news just yet.
Increased affordability in the housing sector with lower home values and historically low interest rates makes considering buying VS renting very attractive.
Investors of rental units are simply giddy at locking in historically low interest rates for 30 years and will reap handsome rewards when inflation returns.