2519 Carmelita Avenue, Belmont $1,6798,000

  • Three generous bedrooms including the owners ensuite
  • Two updated baths

We just listed this really neat home nestled in the hills of Belmont, yet very close to the Carlmont Shopping Center.

We love the circular driveway. More homes on Belmont’s notoriously narrow streets would benefit from one of these.

The rear yard is also very cool. It’s landscaped with a sort of nod to Sonoma’s minimalistic natural foliage, and has outcroppings of bedrock adding a natural interest feature.

The home has newly refinished hardwood floors which cover the split level home from top to bottom. The sophisticated layout, offers the Owner’s en-suite upstairs alongside a large duet office with view decks.

If you are looking for a move-in condition home on a quiet street in Belmont, look no further than this link to more information.

Belmont Home Values in State of Flux

Looking at homes sales statistics is always more interesting when there’s movement in the market.

As seen in the graph below for San Mateo County, the median home price dropped from the peak in April of 2018, and it took over a year to finally rebound which wasn’t until May of 2019 when the median price just barely eclipsed the previous year’s high.

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But that’s not the end of the story, already we’re back down to a median home price matching that seen in October of 2018—when the market began a four-month decline.

Belmont has seen a similar pattern recently, although perhaps with swings more magnified due to the smaller transaction sample size.

This is the year-over-year comparison for Belmont:

SALES

Down by 5 over 2018 to 18—27% decrease

MEDIAN HOME PRICE

Down by $100,000 to $1,700,000 in 2019—down ~6%

DAYS ON MARKET

Down to only 16 on average, from 28 in 2018

CURRENT INVENTORY

Four more homes are currently available than in 2018—a 25% increase

NEW LISTINGS

Eight more listings in June of this year than last—44% increase

MONTHS OF INVENTORY [The time it would take to sell the current inventory at the current pace of sales.]

Up from less than a month of inventory in 2018 to 1.3 months.

What this is telling us is what we are also feeling from our own business and the sentiments of our colleagues—that the market is not as sizzling hot as it was just a year ago. It’s still a seller’s market, but the inevitable swing of the pendulum back to center before heading the other direction may be upon us.

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 info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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.

County Home Values Rebound Slightly

As welcome news to homeowners, yesterday, Standard & Poor’s posted the MSA (Metropolitan Statistical Area) for March 2019 illuminating another uptick in the market after a steady four-month decline. This is the second month in a row showing rising values since the low in January 2019. This latest data point in March puts home values slightly ahead of where they were in April of 2018.

The monthly S&P CoreLogic Case-Shiller Home Price Indices uses the “repeat sales method” of index calculation – an approach that is widely recognized as the premiere methodology for indexing housing prices – which incorporates data on properties that have sold at least twice, in order to capture the true appreciated value of each specific sales unit.

Our Metropolitan Statistical Area (MSA), is comprised of home sales in Alameda, Contra Costa, Marin, San Francisco and San Mateo counties.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508-1441 or emailed at info@morganhomes.com.

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.

Home Values Drop in April

We’ve continued our articles focused on the real estate market’s woes since the reverse in direction in Q4 of 2018 when home values and sales activity dropped precipitously. In fact, the only thing that increased during that time was the number of price reductions and the time it took to sell a home.

In our last blog article on our local market, we wrote about our MSA posting declining numbers in the last four consecutive months. Since then February’s numbers were released (they lag real time by three months), and the result was an uptick in the housing values of 1.57 pts. over January. And while that’s better than a fifth month of dropping home values, to put that into perspective, the YOY figures from April 2018 as compared to this April showed a decline in values of 1.7%.

In Belmont, a similar market withdrawal occurred:

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It’s fairly easy to see that the market isn’t what it once was. Every category except for the Months of Inventory is worse off than a year ago. Notice that while the size of homes selling in 2019 was larger, we associated a negative connotation to it because if larger homes are selling the median home price should be higher—not lower.

We like to think that we are considered to be trusted advisors in our community. Wherever the facts and statistics lead us, that’s what we report. On one had we were amused and on the other annoyed but never surprised to find the main-stream media hyping market signals without even understanding what they mean. Take this recent article from the San Francisco Chronicle. Note that admittedly Chu in this article has no idea why sales are down. Perhaps by delving into the statistics more, her own questions might have been answered.

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And this is the headline use to lure unsuspecting readers to view the entire article:

“SF home sales drop, suggesting slowdown in market”—San Francisco Chronicle, April 25, 2019

Slowdown in the market, or a slowdown in sales? Because a slowdown in sales could mean home prices are increasing if inventory levels remain low.

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 info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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.

Can the Bay Area Housing Market Heyday be Over?

The release of the latest Case-Shiller Report could signal a shot across the bow for sellers considering a move. 

Though often outperforming, and somewhat insulated from many parts of the U.S., the Bay Area is not immune to fluctuations in the housing market. These most recent statisticsfrom the highly regarded Case-Shiller report (for San Francisco Metropolitan Statistical Area) reveal a four-month downward trend which began in October of 2018, and has continued through the latest reporting period—January of 2019 (the index has a two-month lag in reporting). A downward trend like this has not occurred since before the market began a sustained rebound in March of 2012.

What is the Case-Schiller Report?

The monthly S&P CoreLogic Case-Shiller Home Price Indices uses the “repeat sales method” of index calculation – an approach that is widely recognized as the primary methodology for indexing housing prices – which uses data on properties that have sold at least twice, in order to capture the true appreciated value of each specific sales unit. 

Our Metropolitan Statistical Area (MSA), is comprised of home sales in Alameda, Contra Costa, Marin, San Francisco and San Mateo counties.

This study indicates that our MSA home sales index has not endured more than eight consecutive months of declining values since the era of the modern “Great Recession”, which began in December of 2007 and lasted in earnest until June of 2009.

As previously mentioned, this study encompasses several counties—each with varying degrees of volatility, and so while one county may be experiencing a downturn, another county could be resurging. This study may be the best available, but it’s important to remember that real estate is hyper local in the Bay Area, similar to weather-related “micro-climates” that you constantly hear about.

According to this data, the year-over year appreciation in the MSA pool of home sales in January 2019 was a paltry 1.8%. Contrasting that to the same annual period the previous year of 25.8%. (apples to apples).  Since this most recent downturn, values have dropped 4.4%.

The Take-Away

Will this downward trend continue? That of course remains to be seen, but to date home sales in our immediate area do not seem to be encountering the same resistance that was prevalent beginning in fall of 2018 and lasting through January of this year.

With that in mind, the bond yield curve inverted last month, which has often been a precursor to a recession. Home prices may have peaked in September of last year, but more recent sales this spring suggest the housing market remains quite robust.  This month’s Case-Shiller report, due to be published on April 30th, could be an interesting foretelling of what may be in store for us.

Featured Photograph “Dark Tunnel” by Lisa Lemmons-Powers also available to purchase. Be sure to browse her amazing collection of photography.

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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 info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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.

Home Sales Slower in 2019

Last year ended with much indecision regarding the future of our local housing market, and since there are typically fewer sales at the beginning of a new year, we thought it prudent to compare the first two months of 2019 to last year at the same time to better understand the state of our current market.

On an empirical note, we’ve sold all of our listings his year at our same pace—11 days on the market, but with fewer offers. All have sold over the asking price, but not for as much as in recent years past.

MEDIAN PRICE

This is always a good indicator of what the rest of the stats might reveal because if prices are down, so too typically is everything else.

2018 Median Home Price   $1,697,750

2019 Median Home Price   $1,649,000

Change =                               $48,750 or 3% drop YOY

*NOTE: The size of homes selling in 2018 were on average 9% larger which could indicate an increase in the home prices, not a decrease year-over-year.

HOMES SALES (Units)

2018                           20

2019                           13

YOY Change =          7 or 54% Decrease in sales in 2019 so far

PERCENT RECEIVED OF THE ASKING PRICE

2018                           114

2019                           102

YOY Change =          12% Less over asking in 2019

While sales in 2019 to date are slower than 2018, homes are on the market for about the same time—14 days.

And though sellers are taking offers that as a percentage are less over their asking price than in 2018 by a whopping 11%, in real dollars they may be ahead of where we were one year ago.

With the inclement weather, buyers may have perhaps had less motivation or incentive to go out and look at homes, but virtually the same number of new listings came on the market in both years during this period, and thus sales declined so the “Months of Inventory”, or the tine it would take to sell the current inventory at the current rate of sales, has gone up dramatically from .9 months in February of 2018 to 1.3 montsh this year—though still historically very low. If more inventory (homes for sale) develop, prices could see further erosion in home values.

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 info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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.

Belmont Gets Hit with Lower Returns

Belmont gets hit with lower returns for sellers this month as the market stall continues in November.

Comparing home sales for the month of November in 2017 to this year, it’s inescapably obvious that there’s been a shift in the market.

This data reflects many homes which actually sold in September, but have only recently closed in November. This market shift has become even more accentuated in October and November, and we expect the coming months data to reflect that.

This market correction has come upon us so quickly, that Standard & Poor’s Case-Shiller study which tracks among other things, the nine bay area county homes sales over time, and amalgamates that date into an index for investors, has yet to show any decline—their findings lag the market by three months.

This Metropolitan Statistical Area (MSA) index often does turn-down in the two months near the end of the year—November and December, only to rebound the following spring. We’re following this indicator closely as we are many others.

2018 TOP DATA AND 2017 LOWER DATA—BELMONT HOME SALES

Key take-ways:

Note that the percentage sellers are receiving of their asking price has dropped from an average of 109% last year to 98% this year during the same period (November).

The time it took to sell a home (DOM) went from 19 last year to 26 this year.

The median price really didn’t change, except that the since homes that sold were a tad bit higher this year, so there was some incremental increase in the median price.

Think it’s time to sell? We say, not now. Wait and see if this is a temporary fluctuation. But get ready now to come out of the gates in February if you want to try and get top dollar.

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. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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.

Housing Market Crash or Correction—Which Indicators Should One Watch

Housing Market Crash, or Correction—Which Indicators Should One Watch?

There’s been a lot of talk about the state of our housing market, and the effect the rise in interest rates may be playing in the current market stall.

Here, we take a look at some of the indicators we watch to help us, whenever possible, anticipate what might lie ahead for our local market.

This week’s home closings in the mid-Peninsula cities that we track daily showed that half of the homes sold this week for over the asking price and the other half sold for at or below the original asking price, along with 35% of homes having their original price reduced before the home sold.

Contrast that to a year ago when during the same period only 13% of the homes which sold had price reductions, and 60% sold for over the asking price.

Will this be the new norm? Are buyers suffering from shopping fatigue? Has the market peaked?

It’s probably too soon to tell if the current market conditions are here to stay for a while, or merely a blip on the housing market radar screen. We’ll certainly know more when we turn the final page of this year’s calendar and buyers start to thaw out of hibernation.

The Presidential tax plan of 2017, seen by many as retribution for their vote of no confidence after the 2016 election, although applied evenly across the country, has a weighted effect on high-cost of living areas that President Trump lost in the election. This tax “benefit” appears to have had a punitive effect on those areas due to reduced property tax deductions, while also removing the State and Local Tax Deduction—pouring “S.A.L.T.” in their wounds. Will this flip the switch off on the red-hot housing market for the near future?

Interest Rates and Their Effect on the Housing Market

These are some of the important indicators we watch for any long-term shift in our market:

  • The 10 year Note (affects 15 year fixed rate mortgages)
  • The 30 year Bond (affects 30 year fixed rates)
  • The Federal Funds Rate (affects Adjustable Mortgage rates)
  • The spread between the long and short term yield (AKA the dreaded Inverted Yield Curve—an indicator of a slowing economy)
  • The Conference Board’s Leading Economic Index (LEI)
  • Consumer Confidence

When we hear “The Feds are going to raise rates”, it’s important to note that specific change only affects the adjustable rate mortgages. One must also watch the Treasury Notes and Bonds for volatility in fixed rate mortgages.

As interest rates on Treasury notes rise, banks can raise the interest rates on new fixed rate mortgages. That means home buyers will have to pay more each month for a loan which in turn takes away purchasing power. Typically, when interest rates rise, home prices fall. When housing prices fall, the economy slows.

We’ve got good reason to be following this indicator. Read what CNBC just reported on yesterday.

INVERTED YIELD CURVE

An inverted yield curve is best observed in Treasury notes when yields on shorter maturity Treasury notes are higher than yields on longer maturity Treasury notes. During a healthy economy, the yield on a 30-year bond will be around three points higher than a 3-month bill—currently they are at 2.37 for the 3-month note, and 3.33 for a 30-year bond—a scant .96 point differential.

When a yield curve inverts, it is usually because investors have lost confidence in the current economy, thus driving up demand for longer-term securities in order to lock in the higher yields now. This increased demand lifts prices on long-term bonds, resulting in even lower yields, which move in the opposite direction of price. Meanwhile, lower demand for shorter-term securities has the opposite effect and their yields increase until the yield curve inverts. This is a valuable indicator to watch since an inverted curve often precedes a recession, as it did in 1981, 1991, 2000, and 2008.

And as of yesterday, December 4th, this very concern yielded a 800 point DOW sell-off.

An inverted yield curve doesn’t actually “cause” an economic slowdown per se, however, it is often a leading indicator as it’s driven by investor confidence—ostensibly by research, and not pure speculation.

“Inverted Yield Curve and How It Predicts a Recession”, By KIMBERLY AMADEO, The Balance

Thanks goes out to The Balance, an on-line investing information portal and specifically to  KIMBERLY AMADEO offering her down-to earth informative explanations.

The Conference Board’sLeading Economic Index (LEI)

“The US LEI increased slightly in October, and the pace of improvement slowed for the first time since May,” said Ataman Ozyildirim, Director of Economic Research and Global Research Chair at The Conference Board. “The index still points to robust economic growth in early 2019, but the rapid pace of growth may already have peaked. While near term economic growth should remain strong, longer term growth is likely to moderate to about 2.5 percent by mid to late 2019.”

Consumer Confidence

The monthly Consumer Confidence Survey®, is based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch.

“Despite a small decline in November, Consumer Confidence remains at historically strong levels,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions increased slightly, with job growth the main driver of improvement. Expectations on the other hand, weakened somewhat in November, primarily due to a less optimistic view of future business conditions and personal income prospects. Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019. However, if expectations soften further in the coming months, the pace of growth is likely to begin moderating.”

30 Year Bond 12 Month History

 

 

 

 

 

 

 

The Take Away

We all know interest rates are rising, the question becomes will that alone be enough to reverse or continue the stall in the upward trend of the housing market? The first few months of 2019 will be an excellent indicator since historically that’s the period where we see the strongest activity in housing sales and price increases.

Although we prefer not to prognosticate as to what will develop, we anticipate that the market should stabilize some from where it is currently. Prices have probably peaked for now, and we may see a more level playing field for buyers, and a market more in equilibrium. What will this new market be called? Perhaps normal, healthy, sustainable…

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.  Theymay be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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.

 

Housing Stall in 2018 Has Homebuyers on Fence

Wouldn’t it be nice if all market stalls were this pretty?

Welcome to our world, where the new question du jour is “Is there a market crash on the horizon?”, or some equally broad request eliciting a prognostication beyond our worldly abilities. We say, “define horizon?”

Market Stall
Market Stall

In 2017 there was little discussion about the Peninsula housing market and its sustainability. Yet since June of 2018, it’s what everyone seems to be talking about. So, we want to know, what’s really going on?

It never ceases to amaze us how short term the memory is for so many buyers and many agents. We did a blog post in May of 2016 and again in July, about the stall in the market back then. Of course, that too was an election year, and that post is as relevant today as it was back then. Right when everyone thought the sky was falling, after the election and inauguration,  the housing market rebounded to where it had left off, bringing on more misery for buyers as multiple offers once again ensued.

But will that happen again? Will the forces of higher interest rates coupled with fewer tax deduction incentives cause a permanent slowdown in the housing market even after the mid-term elections?

We measured the time period between August 1stthrough October 1st to get an accurate read on the current market conditions.

In Belmont, there were 59 new listings in 2017. This year during the same duration there have been three less—at 56. And although we’re hearing buyers and even some agents espouse how many more new listings there are, there are actually fewer in the same period.

In San Mateo, looking a price reductions during this same period, in the Presidential election year of 2016, 24% of sellers lowered their asking price. In 2017 only 9.8% of sellers had to lower their initial asking price, and so far this year, another election year, 26% of sellers have lowered their asking price.

What is changing is the rate of absorption—or how many homes are selling. The Months of Inventory is a measurement of how long it would take to sell the current inventory of homes at the current pace of sales. Nationwide, this number typically stands around 6 months. In Belmont, that number has been below 1 month for most of the year, with a striking anomaly. The inventory stands at 1.3 months now, the same as it was in 2016 & 2017 during the same seasonal window.

In Belmont, during the same period in 2016-2018 the number of homes sales went from 33 in the presidential election year of 2016, to 43 last year in 2017, to 35 this year in the run up to the mid-term elections. That’s a decrease in sales of ~19% YOY, and that’s what is causing higher inventory levels—not the number of new listings.

On a more macro level, home sales in San Mateo County as a whole went from 752 units sold in 2016, to 734 in 2017 and this year 681 sales—an increased slow down each year-over-year.

How are seller’s weathering the storm? In 2017 Belmont homes sellers were receiving on average 112% of their asking price. That number dropped to 110% this year during the same period.

While in 2017, of the sellers who had to lower their asking price, they averaged a downward adjustment of only $89,000, this year that adjustment increased to $190,000—another sign of weakening demand.

How did the prices hold up overall during these two periods?

In 2017 the median price for a home in Belmont averaged $1,660,000 for these two months, while this year they averaged $1,821,000—indicating a 9.7% median home price increase YOY in Belmont.

What’s the take-away?

  • Home prices have begun to top out as fewer and fewer buyers can afford the median home price.
  • Government intervention in limiting the property tax deduction to only $10,000 per year and capping the mortgage interest deduction to the first $750,000 has a direct bearing on peninsula home values as the average cost to homeowners will now far exceed both of these caps.
  • Interest rates continue to creep up which will only further compound the ability of buyers to qualify for a Peninsula home.
  • We expect to see a more equilibrium in the market which will be less favorable to sellers while the playing field may finally be leveling.
  • Don’t expect prices to drop, but sellers can’t expect to get as many offers for as much over asking as their neighbor did a year ago.
  • Then there’s the stock market. We’ll let the experts talk about what’s going on there, but clearly with another huge unknown comes more uncertainty, and we can only imagine there will be further pull-back in the housing sector until the uncertainty wanes.
  • With strong job growth, buyers may want to buy now, as if history repeats itself, the Spring market will swing back in the favor of sellers.

 

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 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 info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

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