San Mateo County Housing Stays Hot, But Inventory Surge Signals Shift

Here’s a clear breakdown of what’s happening in the San Mateo County (SMC) housing market from 2024 to 2025 based on data from the MLS for Q1.

Key Highlights:

  • New Listings: Up 16.7% — more sellers are entering the market.
  • Homes Sold: Barely up (+2.6%) — demand is steady but not surging with the new supply. This increases the Inventor levels as buyers are uncertain about the economic future.
  • Inventory: Up a big 57.8% — supply has increased significantly. Bidding wars are waning. This will slow the rate of home appreciation.
  • Average Days on Market (DOM): Down 11.1% (from 27 to 24 days) — homes are selling slightly faster despite higher inventory, suggesting continued demand.

Prices & Valuation:

  • Average Sale Price: Up 6.7% ($2.44M ➡️ $2.61M) — strong upward pressure on prices.
  • Median Sale Price: Up 4.7% ($1.91M ➡️ $2M) — supporting the trend that the broader market, not just luxury homes, is appreciating.
  • Median $/SqFt: Up 3% — price growth per square foot is solid but more moderate, suggesting that larger homes might be contributing to the higher overall sale prices.
  • % List Price Received: Up from 104% ➡️ 107% — buyers are paying even more over asking, indicating competitive offers remain.

Volume & Sizes:

  • Total Sale Volume: Up 9.4%—Higher prices and slightly more sales have lifted the total dollar volume since sales only increased 2.6%.
  • Average Home Size: Up 2.5% (2055 to 2107 sqft) — larger homes selling might be nudging up average prices. If the average home price went up 6.7 % but 2.5% of that was due to larger homes selling, a YOY average sale price percentage would be reduced to 4.2%.

Market Dynamics:

  • Months of Inventory: Up 57.1% (from 1.4 to 2.2 months) — still a seller’s market (under 3 months), but it’s becoming more balanced due to buyer jitters.

Summary Insight:

The SMC housing market in 2025 looks like it’s in a hot but slightly more balanced phase:

  • Supply has risen sharply, but demand is keeping pace (homes are selling faster, prices are up, and bidding is competitive, just not as much so).
  • The increase in larger home sales might be boosting both the average sale price and the sales volume.
  • Inventory is building, which could give buyers slightly more leverage in the coming months if the trend continues.
  • Fed. interest rates remained unchanged.

Commentary: With all the uncertainty around tariffs, buyers are taking the classic “wait-and-see” approach — emphasis on the wait. One thing they’re sure of? Their stock portfolios took a hit… but hey, it’s only a loss if they cash out to buy that house, right? Yet another reason to stay on the sidelines a little longer and let the dust (and the Dow) settle.

The Risk Reward? Buy now while prices are climbing a little and bidding wars are catching their breath — or wait with the crowd for “more certain times” and join the stampede when the bidding starts up full throttle again.

Drew and Christine Morgan are experienced REALTORS and NOTARY PUBLIC located in Belmont, CA, where they own and operate MORGANHOMES, Inc. They have assisted buyers and sellers in their community for over 30 years. Drew and Christine have received the coveted Diamond award and ranked among the top 50 agents nationwide and the top 3 in Northern California by RE/MAX. To contact them, please call (650) 508.1441 or emailinfo@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook and on Twitter.

This article provides educational information and is intended for informational purposes only. It should not be considered real estate, tax, insurance, or legal advice; it cannot replace advice tailored to your situation. It’s always best to seek guidance from a professional familiar with your scenario.

BROKER | MANAGER | NOTARY

San Mateo County Housing Market: Rising Demand, Shrinking Supply, and Hidden Value Gains

San Mateo County Housing Market Snapshot: A Mixed Bag of Growth and Decline

The Q3 2024 housing market in San Mateo County reveals notable shifts compared to the same quarter in 2023. While total sales volume and median sale prices increased, other key indicators suggest tightening market dynamics.

Sales Surge Amid Reduced Inventory: The number of homes sold increased by 7.7%, rising from 902 to 977, likely due to strong demand despite the dropping number of new listings. This is reflected in the lower inventory levels—the inventory of homes that haven’t sold by the end of a month.

Pricing Trends Show Hidden Results: 

Median sale prices grew by 4.5%, reaching $1,908,700. At the same time, the cost per square foot climbed 5.2% to $1,149.

Smaller Lots, Bigger Gains

In Q3 2024, lot sizes shrank 24.7% (15,606 to 12,514 sq. ft.), and home sizes dropped 4.7% (to 2,012 sq. ft.). These shifts skew the reported appreciation, as smaller homes on smaller lots sold for 5.2% more. Adjusting for size differences and price per square foot ($60.00), the true median price appreciation is closer to 15.1% year-over-year.

Price Per Square Foot Climbs Nearly 9% The average price per square foot rose sharply, jumping 8.8% from $865 to $949. This uptick underscores rising property values and increased buyer competition. Higher demand, coupled with limited supply, is driving prices higher on a per-square-foot basis, a clear sign of a strengthening market. If inventory constraints remain, expect this trend to persist.

Faster Sales, Fewer Days on Market: Homes sold quicker in 2024, with the average days on market (DOM) dropping from 24 to 23 days, a minuscule 4.3% improvement. This indicates continued competition for available homes.

Strong Pricing Power: Sellers continued to receive more than asking prices, with the percentage of list price received improving to 105%, up 1%.

Total Sales Volume Climbs: The market saw a 5.9% increase in sales volume, reaching $2.35 billion, signaling robust overall growth.

Tighter Months of Inventory: The months of inventory dropped to 1.6, reflecting a 12.5% tightening, signaling a shift toward a stronger seller’s market.

In summary, Q3 2024 shows an increasingly competitive market with rising demand and constrained supply. While buyers face higher prices and smaller lots, sellers benefit from faster sales and strong pricing power. If inventory remains low, expect continued price pressures.

Drew and Christine Morgan are experienced REALTORS and NOTARY PUBLIC located in Belmont, CA, where they own and operate MORGANHOMES, Inc. They have assisted buyers and sellers in their community for over 30 years. Drew and Christine have received the coveted Diamond award and ranked among the top 50 agents nationwide and the top 3 in Northern California by RE/MAX. To contact them, please call (650) 508.1441 or email info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook and on Twitter.

This article provides educational information and is intended for informational purposes only. It should not be considered real estate, tax, insurance, or legal advice, and it cannot replace advice tailored to your specific situation. It’s always best to seek guidance from a professional who is familiar with your scenario.

BROKER | OWNER | NOTARY

Navigating Mortgage Rate Trends: Insights and Forecasts for the Real Estate Market

Predictions and Projections for Mortgage Rates in the Coming Years

The landscape of the real estate market is intricately linked with the trajectory of mortgage rates. As we navigate the ever-changing economic environment, various institutions and experts have offered their projections for the path that mortgage rates might take in the near future. These forecasts provide valuable insights for potential homebuyers, sellers, and investors alike, enabling them to make informed decisions based on the anticipated changes in borrowing costs.

Interest Rate Prognostications

The Outcome

While each institution’s projections may differ slightly, a common thread emerges the anticipation of declining mortgage rates in the coming years. These forecasts provide valuable information for potential homebuyers and those involved in the real estate market, aiding them in making well-informed decisions based on the expected changes in borrowing costs. As economic conditions evolve, the accuracy of these predictions will become clearer, ultimately shaping the future landscape of the housing market.

How these factors contribute to the broader picture:

The decrease in interest rates is likely to be a welcomed development for both sellers and buyers. However, it’s important to note that these predictions don’t imply a complete return to historically low rates—those days seem to be behind us for the foreseeable future.

As interest rates decline and the affordability index increases, prospective buyers will find themselves with increased purchasing power. This surge in affordability will also contribute to a rise in the buyer sentiment index regarding home purchases. Currently, this index reflects that 82% of buyers consider it unfavorable to buy a home due to the combination of elevated interest rates and housing prices.

As the scenario changes and interest rates start to decrease, we anticipate a significant portion of the 82% of cautious buyers on the sidelines will reengage in the housing market. This renewed interest, combined with improved affordability and increased enthusiasm for homebuying, is likely to lead to a scenario where home values start to appreciate at a faster rate compared to the present.

Decision Time

As Warren Buffet famously stated, “Be fearful when others are greedy, and greedy when others are fearful.”

The most prudent trajectory within the realm of our discerned understanding would be for prospective buyers to proactively pursue their aspirations of homeownership prior to the broader populace. Should the cacophony of experts’ prognostications hold true and the prevailing interest rates experience a decline, the avenue of refinancing at the diminished rate emerges as a viable choice, thereby securing a residential abode in advance of the burgeoning fervor among competitors. Conversely, in the event of errant forecasts, substantial savings would also be accrued by evading elevated interest rates.

DATA:

MBA’s Anticipations

The Mortgage Bankers Association (MBA) has provided its outlook on mortgage rates, forecasting that the 30-year fixed mortgage rate will experience an average of 5.9% during the fourth quarter of 2023. Beyond this year, the MBA anticipates a gradual slide in mortgage rates, reaching an average of 4.9% by April 2024. This projection suggests a potential easing of borrowing costs, which could stimulate activity in the housing market.

Morningstar’s Insights

Economists at Morningstar, a renowned financial services firm, offer their own perspective on the path of mortgage rates. Their projections suggest that the average 30-year fixed mortgage rate will stand at 6.25% in 2023. Looking ahead, Morningstar envisions a decline to 5.0% in 2024, followed by a further decrease to 4.0% in 2025. These projections point towards a more gradual and sustained decline in borrowing rates over the next few years.

Goldman Sachs’ Analysis

The investment banking giant, Goldman Sachs, lends its voice to the discussion by estimating that the 30-year fixed mortgage rate will conclude 2023 at 6.4%. For the subsequent year, Goldman Sachs predicts an average mortgage rate of 5.9% in 2024. This projection suggests that while the rates may experience a slight decrease, they will remain above the historical lows seen in previous years.

NAR’s Outlook

The National Association of Realtors (NAR) brings its perspective to the table, forecasting a decline in mortgage rates as well. NAR’s economists project a dip to 6.4% by the end of 2023, followed by a further reduction to 6.0% in 2024. These predictions align with the overall trend of declining mortgage rates, potentially influencing buying decisions and overall market dynamics.

Morgan Stanley’s Perspective

Morgan Stanley, a prominent financial institution, projects that the 30-year fixed mortgage rate will initiate 2024 at 6.0%. This projection indicates a stabilization of rates at a level similar to those forecasted by other entities, further solidifying the notion of a gradual decline in borrowing costs.

Moody’s Analytics’ Insights

The financial intelligence arm of Moody’s, Moody’s Analytics, projects that the 30-year fixed mortgage rate will remain relatively high through much of 2023, with an average of 6.5%. While this forecast deviates from some others, it suggests a potential delay in the downward trajectory of rates before aligning with the broader trend.

Realtor.com’s Perspective

Economists at Realtor.com, a prominent home listing site, hold the belief that the 30-year fixed mortgage rate will commence 2024 at 6.1%. Their projection hints at a continued decline in mortgage rates, although at a pace that may vary from other estimations.

Fannie Mae’s Expectations

Economists at Fannie Mae, a government-sponsored enterprise, provide their own outlook on mortgage rates. Fannie Mae anticipates an average of 6.6% for the 30-year fixed mortgage rate during the fourth quarter of 2023. Looking forward, Fannie Mae foresees a gradual reduction in rates to an average of 5.9% in the fourth quarter of 2024. Additionally, for the entire calendar year of 2024, Fannie Mae’s forecast suggests an average mortgage rate of 6.1%.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine 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 and on Twitter.

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.

Drew Morgan—Broker Associate 01124318 | Christine Morgan—Sales Associate 01174047

Co-Owners of Morganhomes, Inc. Licensed under RE/MAX Star Properties 01811140

Most People Enjoy Rollercoaster Rides, Except when it Involves their Financial Future

Last year was a wild one, but not entirely unpredictable, as we forecast in December of 2021.

Like our recent unprecedented storms, the factors that led to the abrupt housing market shift in the second quarter of 2022, created the perfect storm for a change in the market—not a correction—a change or shift.

In Perspective

After the pandemic stay-at-home order created a need for more space to work from home with many home-schooling children, the new skyrocketing demand for single family homes caused prices to follow suit.

In the first quarter in 2022, we saw an unprecedented run up in home values in our area. Never in our history had home values risen so fast in such a short period of time.

This was to some degree anticipated, as it was widely announced that interest rates would be rising in the upcoming year—this on the heels of desperate attempts to secure a home in 2021 made for bidding wars outpacing sustainability.

In April of 2022, with mortgage interest rates rising to levels not seen since the same time in 2009 during the Great Recession, a pullback began as affordability suffered.

April sales logged the highest prices ever in our area’s history. These sales closed in May, making April technically the pinnacle of home values.

Then it began to slip.

Prices dropped each month-over-month, but-remained higher than a year earlier. In other words, the Year-Over-Year numbers until October remained higher than the previous year.

This is the YOY comparison for December of 2021 to 2022. In every category the housing numbers are unveiling a softening in the housing sector—prices are down, days on market are up, etc.

Note that the size homes selling in these two periods exaggerates the actual drop in values, while antithetically, the price per square foot underrepresents that delta.

We can make a rough “back of the napkin” adjustment, accounting for smaller homes selling in the two periods and skewing the median home price. Note that the median home price dropped 32% but so did the size homes which sold. Adjusting for this, the actual median home price is likely flat YOY, insofar as the median price anyway.

VARIABLES TO A 2023 HOUSING MARKET REBOUND

JOBS AND UNEMPLOYMENT

As one can see by this graph, unemployment in San Mateo County is at or near an all-time low:

Yet Tech specific lay-offs, effect our local housing disproportionally than elsewhere, as many local tech jobs are located on the Peninsula. When workers in the tech industry see companies laying workers off they tend to go into hibernation, avoiding any large purchases that require a long-term commitment.

STOCK OPTIONS

Many of these same companies offer sizable salary offsetting stock inducements. When there’s a hit to their portfolio, tech buyers will tend to wait it out for more favorable withdrawal conditions. And those who bite the bullet and cash out, lose buying power when their portfolio is down.

INTEREST RATES

While interest rate hikes shocked the system of buyers to their core, the initial wave began in January of 2022, enticing a lot of buyers who could see the writing on the wall to jump into the market to secure a low mortgage rate, even if doing so meant overpaying for a home. 

Later, the rising rates had a real effect on housing, as we entered a return to normalcy—wiping out the entire first quarter of home value increases in a matter of months.

THE STALEMATE

Some buyers are holding onto the notion higher interest rates will continue to put downward pressure on home values, while sellers, still stuck in the first stage of grief—denial—are holding out for a return to the glory days of early 2022.

Who will blink first? It’s anyone’s guess. But the overall healthy economic conditions, despite the aforementioned variables, may lean in the favor of buyers returning to the market as soon as they feel confident and comfortable in the economic environment.

MOVING FORWARD

In an effort to thwart a complete housing melt down in 2007, the government bought bonds to drive down interest rates and the FED overnight rate was held at zero.

Buyers will no doubt soon begin to realize that they are not going to see artificially induced low mortgage rates again anytime in the foreseeable future—if ever, and will begin to accept the new reality.

Sellers will stop bemoaning missing the height of last year’s market, and eventually decide to move ahead with life’s plans.

Past performance doesn’t guarantee future results, but we can see patterns that emerge. We wouldn’t be surprised to see home values remain more-or-less flat for the year in 2023, and overall sales remain down.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine 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 and on Twitter.

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.

The Big Risk in Gambling on Bay Area Home Values

The latest Case-Shiller housing report for the Bay Area is out, and as suspected, the downward trend is inching us closer each month to a YOY loss in home values in the nine Bay Area Counties.

Home values shows they have returned to essentially where they were a year ago. The Case-Shiller data lags the market by three months, so these numbers are as of September.

We suspect they have continued to go down in October and November meaning that by the end of the year, home values may be lower than they were a year ago—before the historic run up in Q1 of 2022 which has all but been eliminated.

Meanwhile, 30 year mortgage rates have for at least the time being, settled down from their recent peak.

It will be a blood bath when we look at Q1 in 2023 as compared to 2022, and then we suspect by Fall those number will better reflect the YOY changes since the first three months in 2022 were an anomaly of a run up in home prices, (note we did not say values). 

What will happen in 2023?

It’s too early to begin to even risk speculating, but the driving factors—the variables—will be the stock market performance, mortgage rates and of course, Bay Area job stability.

One thing is for certain, this impasse we’re experiencing—buyers waiting for prices to drop further, and sellers clinging onto the day when they return—is about to end. Someone is going to blink, and it carries a huge risk being on the losing side. 😉

To understand why timing the Bay Area housing market is a Fool’s Game, we need only look to this past year. Sellers waited for prices to peak before cashing out, only to find that after a ten-year run up, the bottom fell out of the market in April, and prices have been reverting back to 2021 values ever since.

Buyers on the other hand fall into a similar trap. They wait far too long to take advantage of a drop in home values—wanting to time the market and hit the absolute bottom. While that’s an admirable goal, it rarely works out in the real world. One only knows the market is at its bottom when they see it beginning to go up. This rear-view mirror approach inevitably means they’ve already have missed the bottom.

This cycle was the first one we experiences first-hand, the market downturn in 1990. The market declined for two years, remained more-or-less flat for another five, and went full throttle upward beginning in 1996. If one bought a home between 2009-2011, the would have enjoyed a 16% increase in 2012 alone. Put another way, buyers had to pay 16% more because they waited to see the market bottom in 2011.

During the Great Recession, between 2007-2009, home values dropped 57% across the Bay Area. Values only experienced minor seasonal fluctuations until January of 2012 when the market entered its sustained ten-year growth cycle. The best time to buy a home during that downturn, were the three years between 2009 and 2011. Those who waited until 2012, when everyone decided it was once again a good time to buy, found themselves in multiple offers and rising prices until 2022.

[Gray bars indicate U.S. recessions. Source, FRED.]

As we’ve admonished buyers in other articles, don’t follow the pack—lead. You’ll be in a far better position when the market rebounds.

For sellers our advice is to evaluate your goals. If you’re considering retirement, waiting for a market rebound may take precious years away from your plans. If you’re a seller wishing to purchase a more expensive home, that home probably took a hit in real dollars more than your current home. And finally, if your downsizing, don’t miss out on the tax benefits of proposition 19 before it’s repealed.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Murky Real Estate Future Causes Housing Slowdown

Is the sky falling when it comes to real estate in 2022, or have we seen this before?

Bay Area real estate has always been buoyed by strong consumer sentiment that the inflated prices will remain a good investment. But once there’s a chink in the armor, all bets are off.

First there was the real impact of rising interest rates, that began the first of the year in 2022 and have continued to date.

Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States [MORTGAGE30US], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/MORTGAGE30US, November 9, 2022.

That coincided with the stock market downturn which affected the down payment resources of many potential buyers.

S&P Dow Jones Indices LLC, S&P 500 [SP500], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/SP500, November 9, 2022.

Inflation per se, is actually a good hedge against inflation, but inflation scares people and people who are unsure of the future tend to hunker down.

Finally, and hopefully the last issue in 2022, has been the recent job layoffs in the Bay Area.

These events affected the Bay Area housing sector in the following ways:

On a macro scale, the Case-Shiller[1] report for the nine Bay Area counties, also known as the San Francisco Metropolitan Area—SFMSA, reported a steady YOY decline in home values after the peak in May—beginning in June of 2022.

S&P Dow Jones Indices LLC, S&P/Case-Shiller CA-San Francisco Home Price Index [SFXRSA], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/SFXRSA, November 9, 2022.

Notice the skyrocketing home prices in the first quarter of 2021—up almost 25% YOY.

The markets technically peaked in April, and the May closings with the typical 30 day close of escrow figures support that.

Since then, we can see home values, while still higher than they were a year ago at the same time, are quickly back peddling—only 5% higher than a year ago—down from 24% higher in March 2022.

COMPARE AND CONTRASTING DOWNTURNS

Looking at the high in March of 2006, we saw closings strong, with 21 sales, only one price reduction, and sellers netting 103% of their asking prices.

Fast forward to October in 2006, and what sellers received of their asking price dropped to 102%, sales remained the same at 21, but four homes needed price reductions.

In March of 2022, there were zero price reductions, 31 sales, and homes sold for 113% of asking with no price reductions.

In October of 2022, only seven homes sold for 102% of asking with one home needing a price reduction. 

As of this article printing, there are still 21 homes available to choose from, four with price reductions and the average days on market at 40.

THE TAKEAWAY

The future of Bay Area real estate is murky at best. Real estate is highly speculative, and there are many talking heads ready to proffer their opinion of what will come next. The media plays a large roll in affecting the mindset of unsure buyers. The media’s angle is to get a reader or viewer’s attention since more eyeballs equals sponsorship and income for their business, so they tend to be overly dramatic in their headlines and analysis and look for ways to support their sometimes sensational, preconceived views rather than report the facts without spin.

We’re in the trenches and we’ll be the first to tell you there’s no way for us to predict what the market will look like next month let alone in 2023. The future of real estate is always in the buyer’s hands. Until they feel comfortable their jobs are secure, that they can afford the home and cash out needed funds from their stock portfolios, that the market won’t collapse out from under them, they’ll stand down and wait it out.

Market swings in the Bay Area are more akin to a light switch, than a dimmer. Ironically, once the above negative obstacles are overcome, it will hold true for many buyers at the same time and the proverbial light will come on as buyers jump back into the market all at once, and multiple offers will raise their ugly head again.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

[1] Case Shiller reporting has a three-month lag

How the Pandemic Saved a Housing Crash

Now that the third quarter of 2022 is in the books, we take a look at how our current market stacks up to historical markets when interest rates were as high (or higher) than they are today, and how these rates have impacted not the price of homes, (we did that in another post), but rather the quantity of available homes for sale and how many are actually selling—as well as how long that process takes.

First, we examined the 3rd quarter of 2016 when interest rates were at a low of 3.42. We the contrasted that to 2022 for the same periods.

Rate during these periods averaged were as follows:

2016   3.42

2022   6.70

Source Fred of St. Louis

Interest rates between 2016 and 2022 went up in real numbers 3.28%—a 96% increase over 2016.

Here’s how that affected sales:

In San Mateo County the number of new listings dropped 7.8%.

Fewer new listings had an impact on inventory of homes available. That dropped by 11.6%. Inventory is measured as how many homes are remain on the market on the last day of the period measured—in this case September 30TH. 

Sales in 2022 dropped faster than the number of new listings in 2016—9.5%

What a seller could expect to receive of their asking price averaged 105% in 2016 and 102% in 2022. 

If we look at the last time interest rates were as high as today’s (av. 6.98)—in 2001—the time it took to sell a home stood at 53 days and sellers were receiving on average 95% of their asking price. We attribute the greater change between 2001 to 2022 to in Q3 because in 2001 we were in the post internet bubble burst throes of a recession.

One would expect with the higher interest rates we have seen in 2022, they would have a greater impact on sales than is demonstrated here. Our take is that the remaining post pandemic pent-up needs has had a hangover effect on the robust home sale activity in 2020-2021.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.