Shift in Housing Market Scares Young Buyers Away

The Interest Rate Hike Effect

In Belmont, the sales statistics for May 2022 show that the inventory of homes has grown to one month of inventory, while this past January it stood at .3 months. To help put that into perspective, during the downturn in 2009, the months of available inventory in Belmont sat at 10.

While some homes are still selling over the asking price, they are on average receiving 10% less over asking than in Q1.

Some of these anomalies are seasonal, and as such, with May being a month that is affected by seasonality in home sales, some of what the market is experiencing is seasonal and normal.

The most recent sales in Belmont are for far less than the sales in January-April. That is of course when the February interest rate hikes really kicked in, coinciding with the stock market taking a hit.

Since many Bay Area buyers are tech workers, whose compensation is augmented to a high degree with stock options, when the stocks are high, buyers are more bullish and can compete in the home bidding process by liquidating more stocks. Conversely, when the stock market takes a hit, buyers not only have less capital to work with, but they also tend to sit back and wait for the market to stabilize before liquidating their holdings.

Where We Stand Today

This graph illustrates the rapid rise in the 30-year mortgage rate this year. We suspect that much of the overzealous bidding that occurred in the first quarter of 2022 was due to buyers’ knowledge that rates were scheduled to rise, and their desire to take advantage of lower rates while they could—even if that meant overpaying in a bidding war for a home.

The S&P 500 and home values seem inextricably connected. One can see in this graph the rise and decline during that same Q1 period that buoyed purchasing power and is now waning.

As seen in this graph for all sales in San Mateo County, Condominium values take a hit first. We attribute this to two factors. The first being that condominiums tend to be akin to a commodity. Many are similar if not nearly identical. There are of course varying degrees of upgrades, whether one has an end or upper floor unit, the location within the complex, but overall, the differentiating factor in a market with growing inventory, comes down to price.

The secondary factor is that as prices and competition for single family homes fall, condominium owners have an opportunity to make a move into a stand-alone home, while buyers who were just shy of being able to purchase a home, and would have bought a condo, now turn to owning a home with a yard.

What is Different Now

What has changed is that with fewer buyers in the market, and less competition, they can be choosier. While it’s still too early to call it a buyer’s market across the board, certain sectors such as the condominium market and cities, and even neighborhood within cities that are less desirable, are most affected.

This means that not every home will sell—at least like they did in the past. Homes will have to be spruced up, staged, show well, and most likely be vacant to garner the level of excitement necessary to captivate the dwindling pool of buyers, so as not to take an inordinate hit on the sale price.

For the typical three-bedroom home, looking at the sales in Belmont, between March and April the seller’s enjoyed a list to sales price ratio of 119%. Since April that has dropped 11% to 108%. With the median home price still hovering around $2,400,000, that represents a $250,000 decrease in overbidding per home.

Is this a Correction?

We don’t see it so much as a correction, but rather the market simply returning to pre hysteria bidding. Interest rate increases along with poor stock portfolio performance has dampened the buying environment—for now. We wrote a previous piece on the monetary effect of rising interest rates and home purchasing power.

Gaining Some Perspective

Buyers are in shock because for the past 20 years, 30-year mortgage rates averaged 3.035%. They never knew rates prior to that 20-year period when between 1980 and 2000 they averaged 10.3%. And the average 30 mortgage rate since 1971 when interest rates were tracked, is 7.7%. Buyers who have never even heard of an interest rate over 4% will acclimate and become accustomed to the new norm, and life will go on. Longer term homeowners who have lived through the interest rate roller coaster ride, will be less effected emotionally, and probably move forward with life’s plans accordingly.

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 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.

Bay Area Housing Market on Precipice of Unpredictable Change

One would think that predicting the seasonal course in our local housing market wouldn’t be that hard, right? What makes people decide whether now is the time to buy or wait on the sidelines? We’re not sure exactly what one thing it is, or if it even is one thing at all. More likely it’s a mix of factors that plays into their emotions, but one thing is in common—when buyers pull back, they almost all do it in sync—almost like the young, amateur traders transforming markets.

The Pandemic Changed the Norms

Prior to the Pandemic we took great pride in prognosticating seasonal real estate cycles by examining past performance of the market at various times of the year and during various cyclical events. Take for example election years. Whether it’s a presidential election year that stands to be decisive, such as Trump v. Biden, or even a less momentous mid-term election, we were pretty much guaranteed to realize a buyer pull-back from late September through mid-November. That was just one of the expectations that we had to throw out the window in 2020.

Of course, the stock market swinging wildly sets people off, and any hint of tech companies laying people off sends the pool of buyers into hibernation.

We had a lot of variables stacking up signaling buyers may take a siesta from house hunting during the Pandemic while jobs, the economy, really the entire future was in unchartered waters, but instead buyers came out in droves snapping up everything and anything so long as it had a yard—go figure. While in hindsight we can see the motivations for many of these first-time buyers jumping into the market—working from home while home-schooling two children in a 900 square foot apartment with not even a yard for sustenance is enough to get any procrastinator off the fence, though we certainly wouldn’t have bet on it.

We started this year with unemployment moderating, but inflation gathering steam, the “R” word entering economists’ vocabulary again, and threats of war in Ukraine which stood to further impact prices. Yet in Q1 we saw one of the biggest bull runs in the housing market we’ve seen in years.

While the median home price in San Mateo County went up 7% between Q1 of 2021 and Q1 of 2022, in Belmont the increase in those two periods was 28%.

So, what’s in store for Q2? Where is the market headed now as the landscape changes?

Even the mention of possible interest rate hikes tends to knock a lot of buyers off of the fence as they finally realize that the luxury they had to purchase a home “whenever”, knowing the rates would always be low, may be coming to a close. It’s odd too, as rates were nearly as high in 2019 and nobody seemed to care.

But this is different. Rate hikes are scheduled for this year and even though the Federal Reserve rate doesn’t automatically correlate to a hike in Mortgage rates, the markets take advantage of it to raise mortgage rates, and profits.

We didn’t so much as predict what would happen when the government artificially kept mortgage rates low after the Great Recession housing debacle in 2007, it was more akin to watching a plane crash from the sky. You don’t have to see it hit the ground to know what will happen.  So, what IS happening that we knew would be inescapable? Homeowners who refinanced or buyers who purchased a home when rates were at historic lows—in the 2-3% range, aren’t going to be selling their home and moving anytime soon. Sure, in California they can now carry their low property tax base, but they can’t carry their low interest rate—so many are going to stay put and there will be even less inventory than there has been, and which will once again put upward pressure on housing prices. 

However, the current rise in interest rates will have a mitigating effect on any upward pressure on home prices. 

The current rates for mortgages that went from 2.5% to 5.2% now makes the monthly mortgage payment on a median price home in Belmont go up more than $4,000 a month, which is a 33% increase. Effectively, that means a buyer’s purchasing power just dropped by 

~ $650,000.

What we cannot predict is the outcome of how the collision of these two contrasting forces will end.

The short of it is we don’t know what buyers will do going forward. Will they wait for a while to see if rates come back down, or jump in before they go higher? Or, will they jump in anyway while others are sidelined and refinance later? Will it put a cap on over bidding? Will higher interest rates dissuade homeowners from selling even if it’s to downsize, to keep a lower payment/interest rate? Will that be enough to throttle back inventory further to mitigate the impact of fewer buyers in the market?

On a micro scale, we have seen a recent slowdown in heightened level of enthusiastic home buying activity in the last few weeks, but then again we see that every year near tax time, Easter and Spring breaks—stay tuned.

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/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.

BELMONT HOME VALUES CONTINUE THEIR ASCENT AS SALES DECLINED

It wasn’t just Sir Richard Branson and Jeff Bezos that have shepherded in a new era. Belmont single family homes values have continued their pandemic born steep ascent.

First, the numbers:

Belmont home values continued their astronomical ascent as sales declined in September of 2021. Belmont sales of single family homes fell 9.6% from September of 2020 to the same period in 2021. Compared to September of 2019, pre-pandemic, sales were up this year more than 53% in 2021.

The average time it took to sell a home went down from 19 days to 12.

The Months of Inventory—the time it would take to sell all the homes on the market at the current rate of sales—went from .8 months down to .5, and the available inventory of homes to choose from went from 21 in 2020, to only 11 in 2021. To put this into perspective, the U.S. housing inventory sits at 6.1 months.

The median home price rose from $1,925,000 to $2,235,000, close to a 12% increase YOY. It’s important to note that the size of homes selling in these two periods went down, from 2,150 ft² to 1,737 ft², a 19% decrease, which serves to only magnify the cost to the consumer. 

The price per ft² in 2020 was $979 and increased to $1,299 in 2021. It’s typical for the price per square foot to go up when smaller homes are selling, since it does not take into consideration the lot which the homes sit upon.

What is noteworthy is while the size of homes selling in these two periods went down 19%, prices went up 12%—illustrating that for 12% more in 2021, one could only get a 19% smaller home.

The percentage sellers received also went up from 101% of the asking price in 2020 to 112% in 2021, underscoring the strong demand.

Due to the increase in home values, the cost of home ownership, while borrowing money at 3% interest, went up $1,000 per month in just the last year. If interest rates were to rise to just 4%, the median price home in Belmont would cost ~ additional $1,000 per month.  

According to Mike Farrell of Wells Fargo, a person wishing to buy the median priced Belmont home with 20% down in 2020 needed to earn ~$225,0000 a year, while in 2021 that rose to $300,000 per year. That’s assuming the borrower has no other debt, such as credit card, car payments or school loans.

For buyers with stock options, puting a larger down payment may be an option to increase their buying power without worrying about needing more income to qualify for a mortgage. But for buyers with traditional salaries—essential workers from Teachers, Police, Firefighters, and hospital workers to grocery store employees, and restaurant workers who, without help from outside wealthy family members, will have little hope of ever buying into the dream of home ownership in the Bay Area.

Unfortunately, we see the same story playing out in San Mateo County as a whole.

The most important take-aways from these numbers are the median home price, which jumped 6% YOY, while the size of homes selling were 2% smaller, and the percentage the seller received of their asking price jumped 6 percentage points from 102% of asking to 108%.

As a direct result of the pandemic, many apartment renters, and condominium owners, found to work from home—and in many cases home school children, they needed more space. Since public gatherings were off the table—they wanted a yard as well as no common areas such as elevators. This created a glut of condominiums on the market.

It goes without saying, that we are in unchartered waters in terms of housing demand. Looking at this data from Case-Shiller®️, as compiled by FRED®, which covers the San Francisco MSA (Metropolitan Statistical Area) comprised of five of the nine Bay Area Counties, one can see the dramatic spike in home values beginning in 2020.

If you have considered selling your home and would like to maximize the proceeds from your sale, please contact us for a no obligation assessment.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at 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.

Housing Market’s Unbearable Heat

The Bay Area housing market is as hot as it’s ever been for sellers, but the real heat is on buyers to get a home as throngs enter the market. It’s no longer race to get a home, it’s a marathon.

Frustrated buyers are using low interest rates which have empowered them to bid higher in multiple offer situations. The result, prices are rapidly rising.

Take San Mateo County for example. We compared May of 2020 to this year and across the board, the numbers show high demand and higher prices.

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Reports of low inventory creating the feverish market are simply misreported. Low inventory implies there are no homes for sale, but looking at the numbers, one can easily see that the number of New Listings are up 14.2% over last year, while inventory of available homes to purchase is down 36%. There are scant homes to choose between, because more homes are selling and faster than before, not because fewer homes are coming to market.

The Months of Inventory in the last column says it all. Months of inventory represents the time it would take to sell the current inventory of homes at the current sales pace. That’s down from 2.4 months of inventory last year to less than one month of inventory in 2021 (the national average is typically six months of inventory).

The YOY median home sale price increase of a staggering 26% YOY illustrates the effect of demand outstripping supply, as buyers outbid one another to secure a home before interest rates rise, and their buying power is reduced, or their mortgage payment goes up.

In our town of Belmont, we see a similar pattern, but since it’s a smaller sample size, some of the numbers are more pronounced. 

Take the number of new listings for sale—up 53% over 2020, yet the available homes to sell are down 35%. This is clearly due to the 122% increase in closed sales.

It’s understandable to question why then did the median home prices rise half of what they did in the overall San Mateo County stats? Simply put, Belmont started with a higher median home price, and has less elasticity in the price threshold to increase at the same rate as less expensive areas included in the San Mateo County Statistics.

What could cool this superheated housing climate? Any number of things, but higher interest rates could be the first to show on the horizon.

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/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.

An Unpredictable Year of Uncertainty

After the most tumultuous year we’ve experienced, and perhaps arguably one of the direst years in our nation’s modern history, we take a moment to reflect on home sales from 2020, the results of which were certainly not anticipated.

We’ve said it and seen it before—when there’s uncertainty in the world, homes sales tend to suffer, as buyers take a wait and see approach. 

We can’t predict what unknown events may arise in an upcoming year to forewarn our clients as to when will be the optimal time to make a move, except in an election year when there’s almost certain to be uncertainty in a mid-term or Presidential election year. It’s for that reason, that we encouraged our sellers not to wait until October to list their home for sale in 2020.

But then the pandemic hit, and apparently, all the norms—everything we’ve seen in market shifts in our 25+ years in business—went out the window.

In March, there was the stay-at-home order. Initially, our trade had yet to be determined an essential business, and thus we were essentially shut down. No open houses, offices closed, and even showings of occupied homes were disallowed.

That was relaxed in short order. Once declared an essential business, real estate offices could re-open, and with the new strict showing guidelines, occupied homes could once again be shown.

Many non-essential tech companies closed their offices, and ordered their employees to work from home. Schools also closed, and in-home learning became the norm.

A shift in home buying almost immediately transpired. People quickly learned they needed more space. Apartment dwellers found their cramped quarters no longer viable, and condos with common elevators and long hallway corridors were found to be ill suited for precautionary safe distancing measures.

In June, when the stay-at home-order was relaxed, it triggered a pent-up need for single family housing, and with sellers reticent to have throngs of strangers in their homes, the scant inventory of homes for sale had tilted the already unequal supply and demand equation and drove up prices.

Many homeowners found they could work from home in alternative areas, and chose to make a Bay Area exodus. That served to loosen the tight grip on low inventory, but it still fell shy of meeting the needs of eager home buyers wishing to gain more space, and prices continued to rise.

The following graphs illustrate the shift in the 2nd quarter of 2020, where increased sales and skyrocketing home prices ensued, eclipsing all records for new listings, sales and median prices over 2019.

Predicting the future of real estate is a fool’s game. If you’re interested in learning how Proposition 19 could help you make a move, and carry a low property tax base, start with our article outlining the opportunities and restrictions, then give us a call if you’re considering a move.

On a local level, these are the year-over-year comparisons for Belmont.

BELMONT NEW LISTINGS 2019 vs. 2020

BELMONT UNITS SOLD 2019 vs. 2020
SAN MATEO COUNTY MEDIAN HOME PRICE 2019 vs. 2020

On a slightly more macro-level, these are the same graphs for the entire san Mateo County.

SAN MATEO COUNTY NEW LISTINGS 2019 vs. 2020
SAN MATEO COUNTY UNITS SOLD 2019 vs. 2020
SAN MATEO COUNTY MEDIAN HOME PRICE 2019 vs. 2020

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/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.

HOMES SALES TANK DURING SHELTER IN PLACE

When Critical Thinking Skills Vanish

We’re not sure what housing market the National Association of Realtors are referring to, but their headlines continue the “glass is half full” mentality which only serves to mislead the public in an effort to bolster their own organization—one which I might add, we are forced to be a part of, for better or for worse.

Take these headlines ripped from the email blasts by NAR just today…

This first one is a classic example. Sight unseen offers are growing from what? From when before the shelter in place order when no buyer in their right mind would buy a home sight unseen?

Then there’s this glass half full headline. All this tells me is that 75% of buyers do NOT accept the virtual buying scenario. And it’s not as if buyers really have a choice right now, so 25% took a leap of faith and dove in to the pool of house hunting no matter what is happening in the world.

What we do not know for certain yet, but soon will find out, is that these buyers are probably taking advantage of desperate sellers, and getting deep discounts on home prices. We’ve been hearing anecdotal stories from our colleagues of prices renegotiated downward immediately following the COVID outbreak.

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And lastly, the electronic signature platform Docusign’s CEO pronouncing that they have yet to see a slowdown. Wonder why? Since sales have dropped in San Mateo county by 78% this year compared to last year during the same period, from when the shelter in place order was initiated until today (one month).

Perhaps it’s because today, that is the ONLY way one can sign a contract, when before it was optional?

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Here are the facts. In San Mateo County during the period from March 17th until April 17th of this year, during the COVIT 19 shelter in place order, when it became illegal to show an occupied home, sales of single-family homes have dropped 78% over the same period in 2019.

The amount a seller has received from the few sales that have already closed, indicates that sellers are receiving on average 100% of their asking price. Not bad, all things considered, yet that’s a 5% downswing over the same period last year.

Truth be told, it’s too early to measure the damage that the mishandling of the COVID 19 outbreak will inflict upon the housing industry, or the economic health of the U.S. as a whole. 

We seem to be getting enough mixed messages from our leaders, and we would hope that the REALTOR trade organizations wouldn’t fall into the same trap, as if our fragile sanity relied upon drinking Kool-Aid from a glass always half full. 

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/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.

COVID 19—Impact on San Mateo County Home Sales

We hope that you and your family are safe and healthy, and implementing practices to remain so. This is such a challenging time for all. 


As one can imagine, the real estate industry is not immune to these uncertain times, and for the next several weeks or longer, we seem headed for more unpredictability.


It’s the unknown that makes people hesitate, whether it be an election year , recession or freefall in the stock market—all of which we are experiencing this year. Of course, unknown factors have always made for instability, although the risk of an epidemic never seemed as imminent as, for example, a threat of a local earthquake. But now that we’re amid this pandemic, there is much uncertainty of when it will end, and what effects may remain.


Real estate is now considered to be an “essential” service industry although some of the services we can offer are limited. Some of what we can do and what we should do are at odds with each other. The Multiple Listing Service (MLS) that all REALTORS ®  rely on for marketing homes, has disallowed broker tours or open houses, and all showings are being discouraged in order to suppress the transmission of the COVID-19 virus.


We are finding innovative ways to continue to help our clients regardless of the necessity or desirability to buy or sell homes. Today there are favorable conditions with less competition and low interest rates to help keep the industry moving. Mortgage lenders have eased practices and appraisers are now doing “drive-by” inspections. Title insurance and escrow companies are arranging for private home and “drive-thru” signings—enabling buyers and sellers to sign documents from the comfort and safety of their car. These measures aim to keep home sales healthy. 

In an effort to put into perspective and quantify the COVID 19 impact on our local real estate market and your home’s value, we examined the period between March 14th, when the Shelter in Place order was implemented, until March 30th for both years—2019 and 2020 in San Mateo County.

As one can see in the graphs below, the number of homes brought to the market—new listings—are down 33%, and the percentage of those that went pending during this period down 50%.

This clearly indicates that we are seeing a shift to a buyer’s market as supply outpaces demand.

What isn’t evident in this data, due to the lack of tracking algorithms, is the number of cancelled or withdrawn listings, or the number of sales that have a contingency in their offer—estimated to be up more than 60%.

Speaking of which, pending sales in February, released today, showed strong housing demand. Although March numbers will certainly begin to reflect the challenges the pandemic is creating, today’s numbers are a sign that the underlying fundamentals of the market are strong.

If you need real estate advice during this time, please know that we’re here to help. We are keeping a watchful eye on how this is affecting our industry, and the market values. We are here to help you regardless of when you find it necessary or desirable to transact real estate. 

We’re available to advise you on a personal case-by-case basis to determine the best opportunity for your needs. 

Editor’s note: The feature image is the ugliest picture we’ve ever posted.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years 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.

2019 Housing Round-Up Let Down

2019 Housing Round-Up

We’re just stepping into the 2020 housing market and it’s too early to tell how the housing it will play out this year. That data typically starts to develop in February-May, as buyers come out of winter hibernation and begin looking at homes in earnest. And with the better weather on the horizon, sellers are more inclined to put their home on the market.

These two forces converge each year to dictate the supply and demand balance, thus determining the strength of the market for sellers, or advantages for buyers. A shortage of supply could continue to drive up values, while a shortage in demand would have just the opposite effect.

We had been indicating this trend may be on the horizon with this very blog back in 2018 with this post about lower returns.

San Mateo County results which provides a more macro-scale, illustrate this.

SAN MATEO COUNTY REPORT

The median home value dropped 1.3 percentage points YOY, which, in and of itself is not an earth-shattering indicator, but the amount sellers received of their asking price is—it dropped 5% YOY.

The leftover inventory of homes for sale at year-end grew 22%, while the number of new listings YOY dropped 6.24% and sales dropped 3.1%. It also took six more days to sell the average home.

BELMONT HOME REPORT

Being a much smaller market sample, the data is less reliable than looking at the entire county, but by examining the entire year—rather than an isolated YOY comparison for each month, the data spikes and troughs tend to somewhat smooth out.

In Belmont, home sales dropped 6.35%, new listings dropped by 10.65%, the percent a seller received down 6%, the median sale price—dropping 4.26%, and the DOM, or time it took to sell a home, up, 30%.

The housing market had a tumultuous end in 2018, and yet comparing the year-end results for 2018 and 2019, we can see that this balance shifted even further away from the unsustainable and feverish seller’s market of the past seven-year bull run, to a more normal, balanced market. We’re seeing the pendulum move from that of a seller’s market, to a more evenly balanced market in full swing.

If you want to know what we believe may very well be in store for us in 2020, read our newest blog post on Election Year Jitters—How it will Effect the Market.

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.

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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.