Belmont gets hit with lower returns for sellers this month as the market stall continues in November.
Comparing home sales for the month of November in 2017 to this year, it’s inescapably obvious that there’s been a shift in the market.
This data reflects many homes which actually sold in September, but have only recently closed in November. This market shift has become even more accentuated in October and November, and we expect the coming months data to reflect that.
This market correction has come upon us so quickly, that Standard & Poor’s Case-Shiller study which tracks among other things, the nine bay area county homes sales over time, and amalgamates that date into an index for investors, has yet to show any decline—their findings lag the market by three months.
This Metropolitan Statistical Area (MSA) index often does turn-down in the two months near the end of the year—November and December, only to rebound the following spring. We’re following this indicator closely as we are many others.
2018 TOP DATA AND 2017 LOWER DATA—BELMONT HOME SALES
Key take-ways:
Note that the percentage sellers are receiving of their asking price has dropped from an average of 109% last year to 98% this year during the same period (November).
The time it took to sell a home (DOM) went from 19 last year to 26 this year.
The median price really didn’t change, except that the since homes that sold were a tad bit higher this year, so there was some incremental increase in the median price.
Think it’s time to sell? We say, not now. Wait and see if this is a temporary fluctuation. But get ready now to come out of the gates in February if you want to try and get top dollar.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Wouldn’t it be nice if all market stalls were this pretty?
Welcome to our world, where the new question du jour is “Is there a market crash on the horizon?”, or some equally broad request eliciting a prognostication beyond our worldly abilities. We say, “define horizon?”
Market Stall
In 2017 there was little discussion about the Peninsula housing market and its sustainability. Yet since June of 2018, it’s what everyone seems to be talking about. So, we want to know, what’s really going on?
It never ceases to amaze us how short term the memory is for so many buyers and many agents. We did a blog post in May of 2016 and again in July, about the stall in the market back then. Of course, that too was an election year, and that post is as relevant today as it was back then. Right when everyone thought the sky was falling, after the election and inauguration, the housing market rebounded to where it had left off, bringing on more misery for buyers as multiple offers once again ensued.
But will that happen again? Will the forces of higher interest rates coupled with fewer tax deduction incentives cause a permanent slowdown in the housing market even after the mid-term elections?
We measured the time period between August 1stthrough October 1st to get an accurate read on the current market conditions.
In Belmont, there were 59 new listings in 2017. This year during the same duration there have been three less—at 56. And although we’re hearing buyers and even some agents espouse how many more new listings there are, there are actually fewer in the same period.
In San Mateo, looking a price reductions during this same period, in the Presidential election year of 2016, 24% of sellers lowered their asking price. In 2017 only 9.8% of sellers had to lower their initial asking price, and so far this year, another election year, 26% of sellers have lowered their asking price.
What is changing is the rate of absorption—or how many homes are selling. The Months of Inventory is a measurement of how long it would take to sell the current inventory of homes at the current pace of sales. Nationwide, this number typically stands around 6 months. In Belmont, that number has been below 1 month for most of the year, with a striking anomaly. The inventory stands at 1.3 months now, the same as it was in 2016 & 2017 during the same seasonal window.
In Belmont, during the same period in 2016-2018 the number of homes sales went from 33 in the presidential election year of 2016, to 43 last year in 2017, to 35 this year in the run up to the mid-term elections. That’s a decrease in sales of ~19% YOY, and that’s what is causing higher inventory levels—not the number of new listings.
On a more macro level, home sales in San Mateo County as a whole went from 752 units sold in 2016, to 734 in 2017 and this year 681 sales—an increased slow down each year-over-year.
How are seller’s weathering the storm? In 2017 Belmont homes sellers were receiving on average 112% of their asking price. That number dropped to 110% this year during the same period.
While in 2017, of the sellers who had to lower their asking price, they averaged a downward adjustment of only $89,000, this year that adjustment increased to $190,000—another sign of weakening demand.
How did the prices hold up overall during these two periods?
In 2017 the median price for a home in Belmont averaged $1,660,000 for these two months, while this year they averaged $1,821,000—indicating a 9.7% median home price increase YOY in Belmont.
What’s the take-away?
Home prices have begun to top out as fewer and fewer buyers can afford the median home price.
Government intervention in limiting the property tax deduction to only $10,000 per year and capping the mortgage interest deduction to the first $750,000 has a direct bearing on peninsula home values as the average cost to homeowners will now far exceed both of these caps.
Interest rates continue to creep up which will only further compound the ability of buyers to qualify for a Peninsula home.
We expect to see a more equilibrium in the market which will be less favorable to sellers while the playing field may finally be leveling.
Don’t expect prices to drop, but sellers can’t expect to get as many offers for as much over asking as their neighbor did a year ago.
Then there’s the stock market. We’ll let the experts talk about what’s going on there, but clearly with another huge unknown comes more uncertainty, and we can only imagine there will be further pull-back in the housing sector until the uncertainty wanes.
With strong job growth, buyers may want to buy now, as if history repeats itself, the Spring market will swing back in the favor of sellers.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario
Owners ensuite with walk-in shower, dual pane windows and recessed lighting
Freshly updated kitchen with newer sleek modern Samsung® appliances including silent-style dishwasher, five burner gas stove, microwave, stainless basin sink—granite counters
Large open communal living room with gas insert fireplace, recessed lighting, and new hardwood floors
New electrical panel
New front and rear landscaping
Multiple outdoor dining and entertainment patio areas—grass play area
Two car attached garage with new modern garage door
Approximately ~1,220 sq. ft.
Substantial ~7,102 sq. ft. lot
Built in 1955– and updated by current owners
Freshly painted interior with designer colors
Award winning Belmont schools, near Carlmont High School
Sought after Central Belmont location, nearby Carlmont Village Shopping Center
Several blocks from Barrett Park Community Center with its many recreational activities, childcare, dog park and socializing
Conveniently close to San Francisco International Airport, Half Moon Bay and Coastal towns, major commute arteries, nearby parks and plenty of excellent shopping and dining options
Reports available to qualified parties
1812 El Verano Way, Belmont
HANDSOME REMODELED CALIFORNIA RANCH | COVETED BELMONT HILLS AREA | INCREDIBLE BACKYARD
Designed and constructed by famed engineer and builder, ‘Andy’ Oddstad, this rolling hills location was chosen for its idyllic surroundings and its warmer microclimate—insulated from the cooler western hills exposure–hence the name El Verano, meaning “The Summer”. This post-WWII enclave of modest homes offer spacious lots, wide streets and community friendly sidewalks—rare for Belmont’s rural surroundings.
This single level home resides upon a bluff and enjoys level topography on an oversized lot. The home has undergone extensive enhancements and has been nicely updated with contemporary finishes. New hardwood flooring is throughout the home, along with the generous use of LED recessed lighting.
The nicely updated kitchen features Maple colored soft-close style drawers, granite counters, all new Samsung®stainless appliances including a quiet style dishwasher, five burner gas stove with self-cleaning oven, and French door stainless refrigerator.
Conveniently located in the galley kitchen is a dinette area for casual meals, and the adjacent more formal dining area opens to the spacious living room, augmented by a centerpiece wood burning fireplace, and highlighted by LED recessed lighting. Access to the expansive entertainment patio and newly sodded sunny flat grassy backyard is also available from this room. The amazing rear yard is perfect for evening get-togethers and outdoor enjoyment.
The two-car garage has fresh Shield-Crete epoxy slurry flooring, and new modern roll-up garage door with sidelights and Wi-Fi compatible belt drive Lift Master opener.
It’s coveted location also benefits from its proximity to both downtown areas of Belmont, as well as convenient travel corridors. Located near the Carlmont Village Shopping Center with a variety of retailers, restaurants and popular gathering spots, such as Starbucks, Vivace and Waterdog Tavern with pet friendly outdoor dining. Other businesses include ACE Hardware, and the upscale Lunardi’s Grocery.
For shopping, Hillsdale Mall is a short drive away and is undergoing a complete renovation, with stores such as Nordstrom, Macy’s, Williams-Sonoma, Sephora and Trader Joe’s. Enjoy dining options like Paul Martin’s American Grill, The Cheesecake Factory, California Pizza Kitchen, and The Counter.
Belmont is ideally located on the Peninsula between the Silicon Valley and San Francisco. It’s popular because of its close proximity to major travel arteries—Highways 101, 280, 92. Caltrain and San Francisco International Airport is also conveniently nearby.
Contact us to find out why more people are moving to the Mid-Peninsula. 650-508-1441
In each of our Newsletters we bring you the recent Belmont home sales for the previous month. This time we thought we’d stack up the months of August to the same time last year, so the variance from the previous year is obvious.
The first thing that jumps out at us is that there were 33% fewer sales overall. If we take out the one off-market sale in 2016, the time it took for the homes to sell really didn’t change. Homes are still selling briskly at about 10-14 days on the market—which really is more dependent upon which day the seller elects to hear offers.
There were two homes which underwent a price reduction before selling, and one home that sold for under the seller’s asking price in 2017, and none in 2016. Still, the amount the seller’s received stayed at around 108% of the seller’s asking price.
Since the size of homes which sold in both years was statistically unchanged, the median price difference YOY is very reliable. It shows that homes in Belmont rose on average almost 10% YOY with the median home price rising a modest 5.13 %. Are we near the top of the market? These almost nominal increases would suggest so, though to a buyer, in real dollars, the medium price home in Belmont just went up $75,000.
[CLICK ON THE IMAGE FOR A FULL SIZE RENDERING]
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
The Case-Shiller Report was released June 27th, the last Tuesday of the month, which tracks home sales in 20 metropolitan cities around the country, called MSA’s, of Metropolitan Statistical Areas.
Our MSA (Metropolitan Statistical Area) in the Bay Area consist of five counties—Marin, San Francisco, San Mateo, Alameda and Contra Costsa. It’s important to note that while home values might be headed upward at a dramatic pace in the counties of San Francisco and San Mateo, they might be lagging in Alameda and Contra Costa, thus diluting the upward trend in one county vs. the whole MSA. This has been the case in our area since the housing recovery began in earnest in 2012.
The same goes for the 20 city composite index, which takes 20 metropolitan cities in the country and tracks them as an average trend.
While the 10 and 20 city composite indices shows that the housing market has not yet eclipsed the all-time high recorded around March of 2006, in the Bay Area, we have.
This graph which we built utilized the data from Case-Shiller for our SFMSA and illustrates that we have reached a new all-time high for home values. However, it’s important to note that the delta between the trend line and the peak where we are today, illustrating where the straight-line home values should be, is far less than in the peak of 2006, where we see a much great deviance off the trend line values. In fact, the peak of 2006 was 58% higher above the trend line than it is today.
One might infer from this that we are not as overvalued as it might appear at first glance.
This give some credence to the synopsis for the Standard and Poor’s Case-Schiller analysis and discussion.
Case-Shiller Analysis by Standard & Poor’s— ANALYSIS
Great View of San Francisco
“As home prices continue rising faster than inflation, two questions are being asked: why? And, could this be a bubble?” says David M. Blitzer Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up. The increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising. At the same time, the supply of homes for sale has barely kept pace with demand and the inventory of new or existing homes for sale shrunk down to only a four- month supply. Adding to price pressures, mortgage rates remain close to 4% and affordability is not a significant issue.
“The question is not if home prices can climb without any limit; they can’t. Rather, will home price gains gently slow or will they crash and take the economy down with them? For the moment, conditions appear favorable for avoiding a crash. Housing starts are trending higher and rising prices may encourage some homeowners to sell. Moreover, mortgage default rates are low and household debt levels are manageable. Total mortgage debt outstanding is $14.4 trillion, about $400 billion below the record set in 2008. Any increase in mortgage interest rates would dampen demand. Household finances should be able to weather a fairly large price drop.”
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario
We’re hearing a few rumblings from sellers thinking it might be a good time to cash out before there’s a full market correction. We’ve also heard from buyers that they might try and wait out the market, and see if there’s a decrease in home values anytime soon. And many of our colleagues are sharing the same sentiments, as the number of multiple bidders appears to them to be waning.
And they’re not necessarily wrong. The market has shifted as we have been espousing in several of our more recent blog posts.
But our observations on why the market seems to be “cooling” has more to do with home values surpassing the purchasing power of the average buyer, than a market experiencing a correction. Because while the mid-peninsula may be realizing a chill in the air when it comes to the number of multiple bids, the lower priced cities such as South San Francisco have never seen more activity. In reality what has happened is that the strong demand for homes under $1,200,000 has forced buyers to look elsewhere.
Housing markets tend to move a little slower than the stock market, where one may see sizeable swings in individual stock or sector valuations on a daily, even hourly basis.
We’ve been talking about the shift to a more normal market, where the number of homes for sale is at equilibrium with the number of buyers looking for a place to purchase.
We believe that our market is not there yet, but it may be getting closer. Any decline in consumer confidence could make that shift happen more rapidly.
It’s important, however, to make a distinction between a much over used term “market correction” and a more accurate term “market shift”. In fact, we’d argue that there is no correction in the housing market like there is in the stock market.
A change in the balance of supply vs. demand is a market shift. A market correction is where the market itself decides values are too high, and forces a correction with a widespread sell–off.
Consider it this way. Thousands of homeowners on the peninsula would all have to be convinced at once that the market has reached an unsustainable level and cash out to create a flood of housing inventory to result in the type of market correction that is being bantered about.
A housing market shift is typically fueled by an outside force—such as the tech bubble bursting in 2000, where wide-spread job lay-offs in the sector forced many homeowners to sell at once, flooding the market with homes for sale. That was not a correction in home values, it was a market shift.
When will the market dynamics change so that buyers are once again in control? When inventory levels surpass demand. Imagine an hour glass where the sand is slowly flowing from top to bottom. The sand begins to pile up and form a small mountain at the bottom of the glass. Until all of a sudden, it collapses. When will that one grain of sand cause the entire pile to cascade down? That’s impossible to predict. So it is in the world of real estate, that while market shifts are inevitable, forecasting when they will occur is an impractical task.
And now a look at the numbers in Belmont for March 2017:
Belmont home sales indicatedthe number of units sold in 2017 increased by less than 1% over the same period last year. Sellers received 1.7% more of their asking price, and the time it took to sell their homes dropped from 11 days to 10.
And while the median price for a Belmont home in March at $1,723,000, increased 18.2% YOY, the size of homes selling this March were 16% larger than last year. Adjusting for the size of the homes selling in these two periods, the actual YOY appreciation might be closer to 2%.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
A lot transpires at the end of the year. There are resolutions for the new year, and reflection upon the year just passed. There’s wrapping up the holiday decorations and reflecting upon the celebratory memories.
And then there’s wrapping up the year-end business for us. Surveying what happened in our local housing market and taking a stab at the “Why”?
We posted an article for our blog in December which we authored and was originally printed in the Examiner. It was aptly titled, “Shifting Market in Play”. In it, we discussed the subtle but noticeable shift in our housing market towards a market approaching equilibrium—that being a market wherein the demand is nearing the supply. That’s a good thing, as a more normal market is a more sustainable market.
It’s not simply that demand for housing is waning, but rather demand at the newly established price point is down. In other words, fewer people can afford the median price home which has had a dampening effect on home sales.
Affordability is affected by three major factors: median house price, mortgage interest rates, and household income. Mortgage rates are still below historical averages, and household income is on the rise. So, what is keeping housing affordability down are home prices—which are ironically artificially inflated due to the first two factors, low interest rates and high income.
Comparing the year-end numbers for Belmont, we see that listings were up but sales were down. The time it took to sell a home was higher, but the price the sellers received and the percent of the seller’s asking price were lower.
The median price appears to have taken a hit too, but upon further examination, one can see that while the median price was down 1.5%, the median size home that sold last year was down even more, at 3.4%.
When the housing market dropped in 2007, home values bounced along at the bottom for several years before climbing again. This is typically true at the peak as well. Are we there? We could be. Data from Q1 & Q2 will give us a more clear picture.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
NOTE: Shifting Market in Play is an article we did for the Examiner in December, when asked to comment on 2016—A Year in Review: This is a link to the original article.
In order to understand our current housing market, one must appreciate that markets are constantly in flux. In our town of Belmont, we looked at home sales and compared the periods from January thru November for years 2015 and 2016.
Let’s first discuss the market conditions. There’s a lot of hyperbole as to the state of our current housing market. Sellers are still in the mindset that they hold all of the cards, yet buyers are beginning to push back on prices. Sellers are receiving fewer offers, many have had to lower their asking prices, and homes are often times closing below the asking price—something that rarely happened from 2012-2015. This suggests a shifting market.
Clearly, the sky is not falling, the shift is towards a more normal market, where homes sit on the market longer, and may sell above, at, or below the seller’s asking price. This long awaited market shift is not a correction, but rather a predictable and healthy move towards a more balanced and sustainable market. To be blunt, prices have risen to a level at which the majority of buyers can no longer afford the median priced home, resulting in a cooling down effect on the housing market.
We first examined all of the home sales in Belmont that occurred in 2015 through November in order to compare those with the same period of home sales in 2016. We added no search filter other than the date range, since the larger the pool of sales, the more reliable the data.
2015
2016
% ∆
Sales
178
181
1.7%
Median Home Price
$1,516,500
$1,389,000
-8.4%
Home ft²
1850
1760
-4.9%
$/ft²
830
856
3.1%
DOM (Days on market)
12
11
-8.3%
% Received
114.5
107.2
-6.4%
Price Reductions
9
19
111.1%
For How Much
$120,638
$118,477
-1.8%
Sold Over Asking
156
149
-4.5%
Sold At Asking
6
10
66.7%
Sold Under Asking
16
22
37.5%
It’s clear that a market shift has occurred. Note that the median home price reflects a significant decrease year over year (YOY), and part of that is simply because smaller homes sold in 2016 skewing the numbers. But in almost every category there’s a distinct shift towards a more normal market. There were fewer homes selling for more than the asking price and the ones that did sell over asking sold for 33% less over asking than in 2015. There were more cancelled listings, and more price reductions for greater amounts. The inventory of homes for sale is growing—up from 0.3 to 0.7 months of inventory (still considered seller’s territory).
On a more macro-level, when we look at the San Francisco Metropolitan Statistical Area (SFMSA) as produced by Case-Shiller for Standard and Poor’s, which encompasses the counties of Marin, Alameda, Contra Costa, San Francisco and San Mateo, one can see that while the YOY increase in their index was a rise of almost 15%, there was only a nominal 0.5% increase in home values since April.
How long will the new normal market continue? We’ll save that wild card question for other talking heads. Nobody really knows of course, and anybody that professes to know should give you cause for concern. However, the market appears to have hit a price threshold. As fewer buyers can qualify for the median priced home, more sellers will be getting less windfall profits like they did during the meteoric rise over the last three years.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA with RE/MAX Star Propeties. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
In order to know what changed our housing market, one must understand that markets are constantly in flux, it’s just hard to see when you are in the middle of one.
We took a look at homes in Foster City for a client recently. The premise was they wanted to know if the housing market was in the seller’s favor, or in the buyer’s favor–if prices were going up, steady, or dropping.
Anecdotally many agents will tell you their opinion based upon their personal observations. If they had a hard time selling their last home they might tell you the market is “changing” and if their last listing flew off of the shelf, they might believe the housing market is as robust as ever. But whatever people feel, the numbers don’t lie. Numbers are an unemotional representation of what is occurring in a given market.
Let’s first discuss the market conditions. There’s a lot of hyperbole as to the state of our current housing market. Sellers are still in the mindset that they hold all of the cards, yet buyers are beginning to push back on prices. Sellers are receiving fewer offers, many homes are having to lower their asking price, and homes are selling often times below the asking price—something that rarely happened in 2012- 2015. This lends itself to a shifting market.
Clearly the sky is not falling, the shift is towards a more normal market, where homes sit on the market longer, and may or may not sell at the seller’s asking price. This long awaited market shift is not a correction, but rather a predictable and healthy move towards a more balanced and sustainable market. To be blunt, prices have risen to a level that the majority of buyers can no longer afford.
We first examined all of the sales in Foster City which occurred in 2015 through August 31st in order to compare 2015 home sales within the same seasonal periods to 2016. We added no search filter other than the date range, since the larger the pool of sales more reliable the data.
This is the data:
It’s clear that a market shift has occurred. While the median home price had a marginal increase of 3% YOY, in every category there’s a distinct shift towards a more normal market. There are more homes selling, for less over the asking price, and taking longer to do so. There are more cancelled listings, more price reductions, and for a greater amount. The inventory of homes for sale is growing—up from .83 months of inventory to three months this year.
The month’s supply of inventory is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5 month supply of homes for sale.
The months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 3 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers. Foster City is currently running a housing inventory level of 3 months.
What this means is that the market shift will no doubt continue until there’s a full blown correction. We could be years away from that happening, but we are moving into the slowest part of the season where seller’s typically net the least for their homes. And if interest rates rise—and they should since they’re at historic lows, that too will have a damping effect on home values in the foreseeable future.
How long will the new normal market continue? We’ll save that wild card prediction for other talking heads. Nobody really knows of course, and anybody that professes they know should scare you. But the market appears to have hit a price threshold. As fewer and fewer buyers can qualify for the median price home, fewer sellers will be getting windfall profits like they did during the meteoric rise over the last three years.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Comparing Belmont July of 2015 sales statistics to July of this year, they might look rather benign, but when you look a little deeper, you can see indications of what could be a slowing trend.
There were only two more listing this year than last, and even with seven more home sales in 2016 the inventory of unsold homes doubled. So did the months of inventory–rising from a minuscule .3 of a month to a mere .7—(still a ridiculously low number considering the U.S. housing inventory level hovers around six months). [CLICK THE IMAGE TO ENLARGE]
While the $129,000 median drop in home prices might seem shocking at first glance, it’s mitigated to some degree since smaller homes sold this year. In fact, if we factor in the difference in the size of the homes in the two periods we come up with an almost identical median price year-over-year of $1,633,000.
We also see the price per square foot dropping from $906 to $824—and larger homes sold last year. Why is that important? Because larger homes statistically sell for less per square foot, since the land upon which they sit is not in the equation, yet can account for 50% or more of a home’s value.
And there’s the smoking gun—home prices did not go up in Belmont this June as compared to last. Not only that, but sellers received only 106% of their asking price compared to 119% in June of 2015. [CLICK THE IMAGE TO ENLARGE]
Is it the unknown of Brexit? That served only to help lower mortgage payments—in theory giving buyers more buying power. It is an election year? This one is tumultuous. Whenever there’s an unknown in the air buyers tend to pull back, sit on the fence and wait it out—it’s human nature.
It could also simply be that we’ve hit a price threshold that the average buyer can no longer afford, or any combination of the above (or more). In any case, it was bound to happen at some point. The question is, have we hit that point?
Disclaimer:
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Drew & Christine Morgan did not necessarily participate in these sales
