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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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.*

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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.

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LEGEND:

↔Unchanged

↑Positive market force

↓Negative market force

↗↙Probable trend upward or downward

Continue reading

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.

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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.

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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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Adjusted Belmont Real Estate Median Price

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It’s interesting to note that in the last two years, for the first six months virtually the same number of homes sold—94 in 2006 and 92 in 2007.

After the July news of the mortgage industry financial issues, the overall uncertainty of the market, and undoubtedly with anticipation that homes values may drop, 2007 saw only 127 sales as compared to 167 in 2006 for the second half of the year.

Can one believe the reported median price for Belmont?

The MLS system reported the aggregate Belmont real estate median home price in 2006 to be $925,000. That rose to $945,000 in 2007 or a little over 4%. Further analysis reveals that the median size home which sold in 2007 was 95 square feet larger.

Understanding the median home sold in Belmont during 2007 sold for $548 per square foot and the median size home sold in 2007 was 95 square feet larger, this could account for as much as $52,000 in the reported median sale price for 2007. Which means the actual median price in Belmont was closer to $892,000 or a decrease of 3.4%.

But it matter less what happened for the entire year if the market incurred a sudden and radial change later in the year. In other words, even if the market went up 10% for the first six months if it dropped 15% in the second six months the current value as of December is more important.

Looking at Belmont’s median home price at the end of December in 2007 as compared to December of 2006, we see that in 2006 the median home price was only $850,000 and at the end of 2007 a whopping $1,025,000. Applying the same logic and adjusting for whether larger or smaller homes sold during the two periods, we see that in fact the median size home sold in 2007 was 370 square feet larger. Using our above price per square foot number of $548/sq. ft that eliminated $202,750 of apparent appreciation and means the true median price would be closer to $822,000 in 2007 as compared to $850,000 in 2006 or a 3.2% decrease year over year.

·         This report has been revised with the release of additional data. Sources used in data analysis included Multiple Listing Service searches and REILPro Statistics.

Belmont Real Estate-December Sales 2007

December 2007 Belmont Market Report:

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↑Belmont ended the year with 17 sales in December as compared to 14 in 2006 and off the high of 25 in 2005.

That’s a glimpse the local market may be settling down.

↑Of those 17 sales, eight sold over the seller’s asking price, two sold at asking and seven homes sold under asking. We indicate this to be positive since it underscores the market is still healthy in certain segments.

The average time it took to sell a home was 39 days. Of the homes which sold over asking they took only 18 days to sell and on average sold for 3.61% over what the seller was asking. Seller’s which received their asking price took on average 40 days to sell their home and homes which sold under the asking price averaged 56 days on the market and sold for 5.26% less than their original asking price. Clearly, pricing a home correctly remains a crucial factor in getting the most for a home.

New_listings_in_belmont_2005_to_200↓Inventory remains higher than usual for this time of year.

One of the factors which helped keep inventory levels in check was the paltry number of new listings to choose from in the spring and summer.