Peninsula Real Estate-A Market Update 7/8/2008

San Mateo County posted some interesting numbers for June 2008. Looking at the entire county is valuable since it’s a large market representation. In other words, small market sample idiosyncrasies have less impact in skewing the numbers. That said, San Mateo County also is comprised of radically varying micro-markets and therefore the overall numbers do not reflect any one particular city’s true performance.

For example, while San Mateo County’s median home price rose 11.8% in June of 2008 over the prior month of May, in Menlo Park the median price rose 28% while in Daly City it dropped 5.6%. Compared to June of 2007 it’s still down 12% for the county as a whole. So while some areas continue to see appreciation and growth, other areas are dragging down the numbers. Of course another way to look at it is areas like Menlo Park are artificially propping up the drastic drops in areas such as Daly City.

This graph illustrates the huge difference in local markets located within a few short miles of each other. Chances are if you don’t live in either of these two cities, the statistics for your city fall somewhere in between.

Mp_dc_2008

Median price comparison for Menlo Park and Daly City dating back six quarters. Source Multiple Listing Service San Mateo County. ©2008 Drew Morgan all rights reserved.

Belmont Market Report-June 2008

Not that you have to worry about reading it in the print media anytime soon, but just to give you a head’s up the reported median price for Belmont in June fell from $1,098,750 in May to $892,500  or 18.7% in June. Of course we’re here to put that stunning decline in perspective.

Smaller homes sold in June as compared to May skewing the median price as smaller homes tend to sell for less. The median size home in June was a whopping 390 square feet smaller than in May. At the going rate of $530.00 per square foot that accounts for $206,700 of price differential. Accounting for this, the adjusted median price for June would be $1,099,200—statistically unchanged.

(Click on the graph for a full-size view)

June_2008_belmont_sales

↑Sale were up slightly as there were 20 sales in June compared to 17 in May

↔The number of homes selling at or above asking stack up like this:

May 2008

June 2008

Δ

Sold Over Asking

5

4

-1

Sold at Asking

1

3

+2

Sold Under Asking

11

13

+2

In Summer, homes historically sell for less in Belmont in terms of the seller’s asking price so we’re scoring this as essentially no market indicator one way or another.

With half of the year over and behind us there’s not been a huge change in values despite the mortgage woes and higher than typical inventory. Foreclosures have had little impact on Belmont’s home values as the lending practices which gave rise to the current state of affairs in many areas of the country simply didn’t apply to Belmont’s more expensive median price point.

The question becomes not when will the market recover but when will it hit bottom. Our intuition tells us that the market will languish at the bottom for awhile before any appreciable median price increases take place. Of course it’s entirely possible we are already at the bottom, or that the bottom has passed—only time will tell. But Belmont’s market indicators seem to be suggesting that we are in a housing lull and perhaps what was going to happen to our market already did.

*One note on the above chart. The home on South Road sold but with a lease option. We estimated the selling price to complete the statistics since the monthly lease payment was recored in MLS, not the actual agreed upon purchase option price.

Full market reports are available by the tenth of each month at MorganHomes.com

If you are willing to commute a little housing relief is in sight

On the Bay Area Peninsula, the housing values have remained fairly stable with low foreclosure rates and local job growth. But there are still relatively good deals to be had. One needs only to venture north to the upper end of the Peninsula–cities like San Bruno, South San Francisco and Daly City–to see the drastic discrepancy in the markets. For example, on the southern end of the Peninsula, in Palo Alto for instance, the median price has continued to rise slowly, while in Daly City the values have reached levels which pre-date the run-up in 2005. Of course living in Palo Alto has its benefits—not the least of which is a housing market well insulated from wild fluctuations, but it takes money to make money. Notice that the median home price in Palo Alto is more than double that of Daly City.

If you want more information on housing trends ro where to find opportunities in the current market, sign-up for our email alerts or call us at (650) 508-1441

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Daly_city_qrtr_1_20042008

Belmont homes sales continue to outpace California

Belmont_may_2008While reports of drastic median price drops continue in the media, isolated areas which are less impacted receive little or no attention. At some point one might wonder why the news isn’t about areas that are not as impacted—why are prices holding up so well when other areas are suffering the greatest set back in years. But those turning to the mass media are clearly missing the whole story. This week, on June 1st, the Open Homes Guide section of the Sunday edition of the San Francisco Chronicle ran the home price closings—for April!

Forget about the fact that they are typically 1 to 1.5 months behind the market, they dutifully report the numbers without analysis or professional perspective.

May home sales statistics for Belmont are in and while there are no real surprises, that may be the best news yet.

↑At 17, there were four fewer Belmont home sales in May than April. Year over year (adjusted for seasonal selling patterns) there is no change over 2007. In 2006 there were 21 sales in May and at the height of the market in 2005 there were 29. Considering what the rest of the state is going through, we consider this a positive indicator for home values.

↓Of the 17 sales five homes sold over asking, one sold at the asking price and 11 sold under the seller’s asking price. That’s not as strong as last month where nine homes sold over and 10 sold under while two sold at asking price.

↗The average home which sold over asking sold for $61,000 over the seller’s asking price in seven days. The one home that sold at the seller’s asking price sold in one day. Of the 11 homes that sold under asking, those had been on the market an average of 89 days and sold for on average $30,500 less than the asking price. Contrasted to April where the average home sold for $31,000 over asking in 18 days, this is a relatively good sign and clearly one more indicator that seller’s should hire a local professional to assist them in pricing their home right.

↗The median price was $1,098,000 in May. Just last month it was only $930,000. The median size home sold in April was 211 Sq. Ft. smaller than in May. At current going rate of $ 574 per square foot, that adds another $121,000 onto April’s median home price, or conversely, subtracting that from May’s median home price (which is closer to the actual median home size in Belmont), we arrive at an adjusted median home value of $977,000 for May—statistically no change over April’s. Nevertheless, no change is welcome and to have even a slight indication of price stabilization at this point is a positive market indicator.

Sign-up for our local newsletter and receive an email alert and link around the tenth of each month to our detailed graphs for Peninsula cities.

↔Unchanged

↑Positive market force

↓Negative market force

↗↙Probable trend upward or downward

(Click on the spreadsheet for a full size image)

San Carlos is in for a thrashing

If the media gets a hold of the median price changes in San Carlos they’ll be sure to spew more aspersions on the local housing market. According to the data reported in the MLS for San Mateo County, San Carlos’s median home price fell from $1,199,000 in March 2008 to $915,000 in April. If true, that would mean a drop in value of over $284,000 or 24% in one month!

But alas, homeowners need not listen to the media reports since they will invariably not account for the fact that the median size home which sold in April was a whopping 395 square feet smaller—accounting for approximately $252,000 in the adjusted median home price.

As always, full statistical data is available on our web page at Morganhomes.com and we frequently discuss housing market trends on the peninsula on our blog page, BeautifulMountainBlog.org

Redwood City—Hit Harder by Housing Woes

Redwood City California may have the best weather as advertised by the city’s slogan “Weather Best by Government Test”, but what it offers in weather it lacks for in housing—stability.

Redwood City has long been known for having a more volatile housing market. With a population of 77,000—double that of nearby towns—its housing affordability depends a lot on where in the city one lives.

Three zip codes separate different areas of Redwood City and last month the median selling price ranged from $480,000 in zip code 94063 to $1,045,000 in nearby 94062.

This graph illustrates the month’s supply of home available for sale. While the adjacent town of San Carlos has only 2.9 months of inventory Redwood City has 5.6.*

Rwc_april_2008

With a median price of only $885,000 as compared to San Carlos at $1,077,000, it’s easy to see why many people choose to purchase a home in Redwood City, but when the market changes, as it did last year, certain areas get hit hard.

It’s somewhat akin to buying a home on a busy street. When it’s a strong sellers market with competing offers for every home, selling a home on a busy street isn’t so difficult. Yet when it was a buyer’s market those homes are often the last to sell and they sell for disproportionately less than their cul-de-sac counterparts.

*The month’s supply of housing is the inventory divided by the homes selling per month. All data was retrieved from the San Mateo County MLS Prolisting.

As always you can see monthly updated graphs on our web page at MorganHomes.com

Belmont’s April Sales Defy the Odds

↑With Belmont’s April home sales behind us we are able to compute the data and there’s a silver lining to the news. For the first time this year homes sales are up over the same period a year earlier. Admittedly, at 21 sales this month compared to 20 last year in April it’s not a huge increase, but any increase is a welcome event given the current state of the market.

↔The days it took to sell a home was essentially unchanged at 13.

↘Last month, nine homes sold over asking, two sold at asking and 10 homes sold under the asking price—on average for $32,000 less. That compares to last year where 13 homes sold for over their asking price, four sold at asking and only three sold under.

↔Of the sellers that received their asking price all of the homes sold within the first 13 days on the market

↔Though the reported median price fell we feel prices are holding relatively steady–accounting for larger or smaller homes selling in a particular period. The median price dropped from $970,000 in 2007 to $930,000 in April of 2008 but the median size home that sold was 165 square feet larger in 2007. At the current price per square foot, that could account for as much as $94,000 in the differential pushing the true median value in 2008 to $1,024,000.

May is typically a very active month in real estate and it will be interesting to see if this month’s event becomes a trend.

As always, full market reports with interactive graphs for Belmont and adjoining towns will be available on our web site at MorganHomes.com when statistical data is available—usually by the tenth of each month.

April_2008_sales

LEGEND:

↔Unchanged

↑Positive market force

↓Negative market force

↗↙Probable trend upward or downward

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Belmont Market Update-March 2008

BELMONT’S MEDIAN HOME VALUE IN MARCH

Belmont’s median price rose $13,000 in March of 2008 to $984,500 from $971,500 in March 2007—a 1.3% increase. As always, we further examine the median size home to see if larger or smaller homes selling during the sample period could influence the numbers. Since the median size home for both periods was essentially the same, no adjustment was made this month.

Belmont_march_2008_stats_2

SALES CONTINUE TO BE DOWN

Only 14 homes closed escrow in March as compared to 28 for the same period last year—clearly underscoring the unease in the housing market and the economy as a whole.

STRIKING A BALANCE

The existing inventory of homes for sale is lower than usual for this time of year which helps bring equilibrium to the supply vs. demand impact on housing prices. Factors which are not as readily born out by statistics can also influence local housing values such as sellers who feel no pressure to sell and hold firm on their price. One indication of that can be seen in the time it takes a home to sell, or the “Days on Market “statistic, (DOM) which has doubled from 9 days in 2007 to 18 in 2008.

Redwood Shores Market Update for March 2008

Notice how the reported median price in 2007 was up 3% over 2006. We adjusted for the fact the median size home which sold in 2007 was 100 square feet larger. Accounting for larger homes selling, Redwood Shores actually experienced a median price drop of 2.27% in 2007, or perhaps better stated swing of 5.27%. In our estimation this is critical information buyers and sellers should know. Yet it is unavailable to the general public due to the enormous time spent performing manual calculations.

(Click on the picture for a full size illustration)

Go to our web page at MorganHomes.com and click on "How’s The Market" to read more interesting stats on Redwood Shores.

Rws_median

Belmont’s Market Report-February 2008

February sales data for Belmont is available but there’s not much to talk about. There were only five sales (homes that closed escrow) in the month of February. That means only five sales were consummated in January. That’s down more than 50% over last year. While that may sound like a huge percent decrease, it’s important to remember in terms of actual units, it means eight fewer homes sold.Graphtrends

The median price decrease could make headlines though. It dropped from $900,000 a year ago to $750,000 for the same February period. Of course with only five sales these numbers are easily skewed. In fact, the median size home which sold in February 2007 was 1,680 square feet in size compared to this year’s five sales where the median size home was only 1,010. That’s more than enough to explain the difference in the median year-over-year price change. If one was to account for this differential at the going cost per square foot the adjusted median price would be $ 1,122,000 for 2008.

In February, the average home took over 40 days to sell and the seller received only 96% of their asking price.

In every category we measure—the time it takes to sell a home (DOM), the number of new listings vs. sales, the percentage the seller received of asking—the performance was markedly down over last year. Yes the real estate market has slowed and if we were to measure it as we do the economy, you could say it’s in a recession.

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