The sale of single family homes in Belmont increased this April to 16 over last April’s 10—a 60% increase in home sales. This is important to note since last year in April homebuyers enjoyed the $8,000 tax incentive program (and also because we went out on a limb and predicted this might happen). During the same time the average days it took to sell a home dropped from 76 days to 50.
• Last April four homes took price reductions of on average $48,000 in order to attract a buyer. This April five sellers had to reduce their prices by $44,000 in order to sell their homes.
• While last April three homes sold for on average $40,000 less than their asking price and took 75 days to do so, this year eight sellers received on average $34,000 less in 93 days.
• Six of this April’s sixteen home sales sold for on average $25,000 more than asking price in only six days, as compared to last year when the same number of homes sold over asking in 12 days.
• In both years two homes sold at the seller’s asking price within six to nine days.
The bigger news is the median Belmont home price in April of 2010 was $967,500—which bought you a four bedroom three bath home of 2,418 square feet. This year the median home sale price in April was only $835,000 and for that you could purchase a three bedroom two bath home of only 1,570 square feet.
What does all this mean?
It means that while the median price point for homes sold last year was higher, you could also get a lot more home for your money.
The relatively small inventory of homes selling in Belmont means the median home price—the point at which half of the homes sold for more and half sold for less—is very susceptible to swings created by either larger or smaller homes selling in a given month.
The difference in the size home one could buy in April of 2010 as compared to April of 2011 was 848 square feet larger at the median price point—that’s not an insignificant number. If one could buy a home 54% larger last year for only 16% more than this year it means home values actually went up year-over-year.
A way to better compare apples to apples and approximate the adjusted median home price is to multiply the 848 square feet by the median price per square foot which homes were selling for—$ 445.00 per square foot ($377,360) and add that to this year’s median home price of $835,000 to approximate a closer representation of the median price trend:
848 x $445 = $377,360 + $835,000 = $1,212,360 (Adjusted median home price).
While this approach is not perfect, despite the recent reported median home price decline in the Bay Area, either home values increased in Belmont year-over-year or you just get a lot less home for your money this year.
Is this a trend or anomaly? Stay tuned…
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
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