Nothing remains the same, except change—with each change being slightly different than the one before…
By The Numbers
Now that the waning dog days of summer are upon us, we felt it was time to summarize the second quarter sales for the year. I mean, doesn’t everyone want to know, “How is the Market”? It’s the question posed to us most frequently, and I guess rightly so. After all, for many, ok, I’ll expand that for most people, their Bay Area home is their largest asset—their nest egg. It’s akin to people in other areas of the country, where home prices are more understandable, tracking their 401k’s, stock performance, or their own bank accounts on a daily basis.
When the market takes a nose dive again, and it will, if you’re anywhere near retirement, you had better have a plan “A” now, or you’ll invariably be implementing the alternative, plan “B”, which means you might just get stuck in retirement purgatory waiting for the values to come back so you can cash-out on all of that equity you once had.
This is also the time of year when many of my colleagues come to me in hushed voices wearing ghastly, pasty facial expressions contorted into the most unpleasant sight and reeking of fear, asking me if I noticed that the market is down…that there’s been a shift, and did I notice it, and do I feel the same way. I don’t. I’ve been tracking home sales statistics for my entire career, and it’s normal, heck it’s expected that in the summer the market slows. In typical fashion, agents will post these dire statistics from summer to what amounts to nothing more than fear mongering. Of course the market has slowed down, its summer!
Why? Because people have lives—and they go live them. It’s interesting to observe that the better the economy, the more pronounced how this housing hiatus manifests itself—more money, more market confidence, means you might as well pack up the family and head off for an extended vacation to some romantic or adventures place, like Disneyland. Because let’s face it, once the kids are out of school, parents have to do something to burn off that pent-up energy and it’s certainly not going to be tamed traipsing around open houses every weekend.
Then there’s the inarguable fact that the high bidders for homes in the spring market have already won. They’ve got the home they want, and now they’re leaving the housing hunt rat race in the dust and soaking up all of the equity future buyers will be serving up to them on a silver platter.
So instead of looking back at the spring market and wishing our business was just as brisk and our pipeline as full, we do what one should do and that is to compare and contrast the same period year-over-year to better understand, without hyperbole, pre-conceived notions, or hysteria, what the heck is really going on.
To this we look at the entire market of San Mateo County. It gives us a better more macro view of home trends than say limiting our analyses to a small town like Belmont, however charming it is, but also highly susceptible to wild swings in its small market sample size.
Here we see a different story emanating from the lines of a spreadsheet. The market isn’t down, any more than it should be for this time of the year, and in fact it’s quite strong.
The median home price for San Mateo County in Q2 rose $185,000 YOY or 13%, while sellers also enjoyed receiving 3% more over their asking price.
The number of new listings was up 9%, while sales were down 4%, causing the housing inventory to rise an aggregate 19%.
So the sky isn’t falling. The activity in the market is not quite as brisk, but with all that meddling in people’s mortgage tax deductions that’s to be expected. Now, everyone can go back into their happy place imagining that home values will always go up in the Bay Area with the trajectory of a missile launch, until that missile misfires and lands right back from where it took off.
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 firstname.lastname@example.org.
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