It wasn’t just Sir Richard Branson and Jeff Bezos that have shepherded in a new era. Belmont single family homes values have continued their pandemic born steep ascent.
First, the numbers:
Belmont home values continued their astronomical ascent as sales declined in September of 2021. Belmont sales of single family homes fell 9.6% from September of 2020 to the same period in 2021. Compared to September of 2019, pre-pandemic, sales were up this year more than 53% in 2021.
The average time it took to sell a home went down from 19 days to 12.
The Months of Inventory—the time it would take to sell all the homes on the market at the current rate of sales—went from .8 months down to .5, and the available inventory of homes to choose from went from 21 in 2020, to only 11 in 2021. To put this into perspective, the U.S. housing inventory sits at 6.1 months.
The median home price rose from $1,925,000 to $2,235,000, close to a 12% increase YOY. It’s important to note that the size of homes selling in these two periods went down, from 2,150 ft² to 1,737 ft², a 19% decrease, which serves to only magnify the cost to the consumer.
The price per ft² in 2020 was $979 and increased to $1,299 in 2021. It’s typical for the price per square foot to go up when smaller homes are selling, since it does not take into consideration the lot which the homes sit upon.
What is noteworthy is while the size of homes selling in these two periods went down 19%, prices went up 12%—illustrating that for 12% more in 2021, one could only get a 19% smaller home.
The percentage sellers received also went up from 101% of the asking price in 2020 to 112% in 2021, underscoring the strong demand.
Due to the increase in home values, the cost of home ownership, while borrowing money at 3% interest, went up $1,000 per month in just the last year. If interest rates were to rise to just 4%, the median price home in Belmont would cost ~ additional $1,000 per month.
According to Mike Farrell of Wells Fargo, a person wishing to buy the median priced Belmont home with 20% down in 2020 needed to earn ~$225,0000 a year, while in 2021 that rose to $300,000 per year. That’s assuming the borrower has no other debt, such as credit card, car payments or school loans.
For buyers with stock options, puting a larger down payment may be an option to increase their buying power without worrying about needing more income to qualify for a mortgage. But for buyers with traditional salaries—essential workers from Teachers, Police, Firefighters, and hospital workers to grocery store employees, and restaurant workers who, without help from outside wealthy family members, will have little hope of ever buying into the dream of home ownership in the Bay Area.
Unfortunately, we see the same story playing out in San Mateo County as a whole.
The most important take-aways from these numbers are the median home price, which jumped 6% YOY, while the size of homes selling were 2% smaller, and the percentage the seller received of their asking price jumped 6 percentage points from 102% of asking to 108%.
As a direct result of the pandemic, many apartment renters, and condominium owners, found to work from home—and in many cases home school children, they needed more space. Since public gatherings were off the table—they wanted a yard as well as no common areas such as elevators. This created a glut of condominiums on the market.
It goes without saying, that we are in unchartered waters in terms of housing demand. Looking at this data from Case-Shiller®️, as compiled by FRED®, which covers the San Francisco MSA (Metropolitan Statistical Area) comprised of five of the nine Bay Area Counties, one can see the dramatic spike in home values beginning in 2020.
If you have considered selling your home and would like to maximize the proceeds from your sale, please contact us for a no obligation assessment.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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 firstname.lastname@example.org.
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.