By now everyone has heard that the Peninsula housing market picked up last year but as is often the case, the devil is in the details.
What really went on?
Most people, including real estate agents, are under the misimpression that there were no homes to sell last year—that inventory was in short supply. Well part of the is true. The inventory was down but the number of new listings hitting the market were actually up over 2011.
There were 282 new listings in 2012 as compared to 261 in 2011. That’s about one month’s worth of new listings—not much to talk about. But that 8% increase is important because of the increase in sales.
Home sales for the two years are a different story. In 2011 there were 186 single family home sales as compared to 243 in 2012—an increase in 2012 of 31%.
That which created the low inventory of homes was that home sales were dramatically, up while the number if new listings hitting the market were up only slightly.
This short supply of homes created a buying frenzy for the few available homes on the market and of course bidding wars ensued, driving up prices.
In 2011 the median home price in Belmont was reported as $870,000 while in 2012 that number reached $912,000. That modest increase of about 5% is reflected in the statistics but to a greater degree in the real world. In 2011 the median size home which sold was 1925 square feet and in 2012 the median size home sold was 1940 square feet—15 square feet larger—not significant enough of a difference to make any calculation modifications.
Belmont, though rather representative of the overall Mid-Peninsula housing market, due to its relatively small market sample or “snaphot” if you will, can be easily distorted when fewer large homes trade hands or more distressed sales occur.
For a more accurate data sample we examine the entire San Mateo County as sort of a check and balance. Of course San Mateo County includes a wide array of neighborhood housing trends–while Menlo Park home prices are climbing those in Daly City for example may be still on the decline as seen in this 2008 post. That’s why when we see a dramatic market shift like the one to the left, one can only imagine how strong the lower Peninsula must be faring.
In Belmont, here’s where you can see the market shift. Of the homes which sold in 2012, 54% sold for on average $52,000 over the seller’s initial asking price with these sellers receiving 107% of their initial asking price (not the reduced price), while 11% of homes sold at the seller’s asking price and only 35% of homes sold for less—on average $32,000 less—ultimately getting only 93% of their asking price.
Contrast this to 2011 where we see that the results appear to be almost perfectly reversed, with 58% of the homes selling for less than the seller’s asking price, 11% selling at asking and only 32% which sold for more than the asking price.
And the bids are going higher: While in 2011 if you were one of the lucky sellers to get over your asking price on average you received 103% while that number jumped to 107% in 2012.
Selling a home in Belmont did get easier—so long as you worked with a seller. With more eager buyers for each available home the average time it took to sell al home dropped from 46 days down to 37.
Why did most of the homes sell for at or above the seller’s asking price and some homes still sell for less? Because even in a hot market buyers know the inventory. They have essentially unfettered access to data and with the advent of the internet the way buyers see and buy homes has changed forever. Homes which are overpriced will continue to languish on the market even during peak market conditions, and as illustrated above, receive on average 13% less!
What’s in Store for 2013?
More of the same. Rising prices, multiple offers with only the hope that more inventory will satiate some of the eager buyers. What could be a wrench in the works? Interest rates rising or natural disasters. The economy appears on the mend and apparently buyers are moving ahead with unabashed enthusiasm for housing once again,
Are you considering selling or know someone who is?
We’d love to talk with you. We have plenty of pre-approved Buyers just waiting to jump at the next opportunity.
Want to know what we can do for you?
Each year we compare our personal statistics for listings we sold in Belmont. Last year not only did we beat the averages, we beat out the other top three Belmont REALTORS with our statistics for percent of asking our sellers received, days on market and price reductions (we had none).
While the average home in Belmont sold for 101% of asking, our seller’s received on average 103.8%–netting our sellers more than any of the other top three Belmont REALTORS.* We also came in #1 with no price reductions or cancelled listings.
And while it took our competition 37 days on average to sell their listings, we sold all of ours in less than 7.
The best measurable results and the fact that we’ve sold every home we listed last year as we have done for the past 20 years, makes us a clear choice for helping you to sell your home.
If you are looking for someone to help you sell your home, we’re someone you should know.
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.
Drew & Christine Morgan did not necessarily participate in these sales.
DRE License Numbers 01124318 & 01174047
Drew & Christine Morgan, REALTORS | Notary Public
*All data was retrieved from MLS Listings, Inc. The Multiple Listing Service for San Mateo County.