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.

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.

1812 El Verano Way, Belmont OPEN SAT & SUN 8/4 & 8/5

1812 El Verano Way, Belmont LISTED FOR $1,598,000

  • Remodeled and enhanced with contemporary finishes
  • Three generous bedrooms
  • Two full taupe-tiled baths
  • Rich Oak hardwood flooring
  • 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

Prop 13 May Die a Slow Death

Do you remember proposition 13? If you do, you probably own a home, but prop 13 may be dying a slow death, at least for industrial and commercial properties.

THE BACKSTORY: On June 6th, 1978, nearly two-thirds of California’s voters passed Proposition 13, reducing property tax rates on homes, and businesses by about 57%. Proposition 13 forever altered the way property taxes would be levied on real property, or so voters were promised.

Under Proposition 13 tax reform, property tax value was rolled back and frozen at the 1976 assessed value level. Property tax increases on any given property were limited to no more than 2% per year as long as the property was not sold. Once sold, the property was reassessed at 1% of the sale price, and the 2% yearly cap became applicable to future years.

Prior to Proposition 13, the property tax rate throughout California averaged a little less than 3% of market value. Additionally, there were no limits on increases for the tax rate or on individual ad valorem charges. (“Ad valorem” refers to taxes based on the assessed value of property). Some properties were reassessed 50% to 100% in just one year and their owners’ property tax bills increased accordingly.

But change is inevitable, and that’s exactly what proponents of the newly proposed initiative are counting on.

WHAT’S IN STORE: A new ballot initiative that takes aim at how commercial properties are taxed under California’s Proposition 13 could raise $6 to $10 billion more each year for schools and other programs and services, according to a new analysis by the Legislative Analyst’s Office.

At the heart of the initiative, (which is still being reviewed by the state attorney general’s office), is a property tax law enshrined in the state constitution since 1978. Proposition 13 caps taxes for all kinds of properties — residential and commercial — at 1 percent of a property’s purchase price, allowing for increases of no more than 2 percent per year, even if the value of the property triples or quadruples over time.

The initiative would change the constitution so that commercial and industrial properties — and land not intended for housing development — are instead taxed based on their current market value. The idea, long favored by critics of Proposition 13, is often called a “split roll” since it would not affect protections for residential properties. Businesses whose total property holdings are valued below $2 million would be exempt.

Supporters of the ballot initiative include the League of Women Voters, California Calls, PICO California and other civic and community groups.

But that’s not the end it. The California Association of REALTORS wasn’t to put more teeth into the initiative by adding an initiative to the proposition 13 overhaul that changes how those homeowners over 55 can transfer their tax base.

Currently, Proposition 60, enacted into law in 1986, allows for the one-time transfer of your current home’s tax base to a replacement property of equal or lesser value after the age of 55 of either spouse, providing that the replacement property was located within the same county.

The problem for most people wishing to benefit from this tax base transfer is they are limited to moving within the county in which they currently reside, or moving to one of only a handful of reciprocal counties (Alameda, Los Angeles, Orange, San Diego, Ventura, San Mateo, Santa Clara, or El Dorado).

The new proposed initiative tied to proposition 13 amendments would allow homeowners over 55 to carry with them their current tax base whenever, (as many times as they like), and wherever they move—so long as they stay within California.

Proponents of the initiative say it will help free up the housing inventory shortage, as many long-time homeowners are reticent to move if they can’t carry their low tax base. While opponents, such as San Francisco-based YIMBY Action, a pro-development, millennial-led group say that this initiative is just helping the rich get richer—implicit in their argument is that if you own a home, you must be rich.

Thanks to the San Jose Mercury for providing much of the article’s investigative analysis and insight.

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.

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 or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario

 

 

 

Winning the Bid May Actually Be Losing

Are agents terrible at pricing homes for sale, or is there another reason so many homes sell for hundreds of thousands of dollars over the asking price?

When a home is underpriced, or overpriced for that matter, it often has to do with the fact that the listing agent is from out of the area. They miss the mark because in their home turf, homes may be selling for less (or more) than where their listing is located, and when they apply their native pricing strategies to a listing they have out of the area, they can be pretty far off at times.

The same goes for an agent who represents a buyer in an area where they’re not as familiar with the local home values. They may grossly overestimate a home’s worth, based upon their experience in the area where they concentrate, thus recommending an offer price to a buyer that is too high and artificially driving the prices up.

Then there’s the phenomenon known as the “Winner’s Curse”, hence while you may be winning the bid, you’re actually losing. The winner’s curse may occur in any auction where less than complete information is available. The winner’s curse says that in such an auction, the winner will tend to overpay. The winner may overpay or be “cursed” in one of two ways: 1) the winning bid exceeds the intrinsic value of the asset or 2) the value of the asset is less than the bidder anticipated, so the bidder may still have a net gain, but will be worse off than anticipated.

The Winner’s Curse phenomenon also manifests itself in the home buying process in several additional ways, some of which are introduced by the buyers.

When a buyer tries to outbid their competition by purposefully offering more than the home should be worth, just to win the auction, they may win the bid, but by definition, they paid too much, since the average bid typically defines the value, and the winning bid is the outlier.

Since homes are not a commodity, as in oil or gas for example, wherein the value is pretty well understood and, more importantly, oil is oil and it either makes sense to purchased it at “x” price or it doesn’t. Wherein when it comes to homes, at least those located outside of tract areas, are unique unto themselves, and buying a similar home may not be nearly as emotionally appealing. In this way, it’s more like adopting a child, no two are the same.

From a listing agent’s standpoint, pricing a home at the selling price of the home across the street typically backfires. Here’s why. Let’s say that the home across the street was listed at $1,000,000, and sold with ten offers for $1,400,000. The high bidder, who won the bid, and by definition paid too much—because they paid more than any other buyer was willing to bid—is now out of the pool of potential bidders for the next home—the one you just listed across the street. This means out of the nine residual buyers, none were willing to pay $1,400,000 and some may have even already moved on, or are in contract on another home. What did the other nine buyers bid? Only that listing agent will ever know, but the next highest bidder is the one you need to attract and who knows how much they offered.  And this of course assumes that the homes are identical—which they never are. The second highest bidder might not even like your listing, might be out of town the week you go on the market, which means now you are relegated to the third, fourth, or fifth bidders in order of their declining tolerance for bidding or ability to pay.

This is one reason agents will intentionally list a home at what seems to be irresponsible—far below what it might eventually sell for, based upon the recent comparable sales in the area. And while this practice might be viewed by some as false advertising, which is illegal, as the home might well be priced lower than recent sales, it might actually be priced appropriately for its intrinsic value.

In residential real estate valuation, there are several ways to ascertain the intrinsic value of a home. The three accepted practices in real estate are known as the Comparative Market Approach, also known as the sales comparison approach, the Principle of Substitution, (what else could I buy), and the Cost Approach, (how much would it cost to build a similar home from scratch).

Agents and buyers alike tend to rely heavily on the sales comparison approach, as it makes sense to compare the home they are buying to those which have recently sold, but if the buyers are bidding too much on homes, than the comparable sales are less trustworthy, and looking at the Cost Approach, or what it would cost to build a new home might be more effective, if nothing more as a check and balance against the price one might offer.

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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.

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 or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario

Possible Tax Hike Looming

1 Month Left to Sell Before Possible Tax Hike

DAILY REAL ESTATE NEWS | THURSDAY, NOVEMBER 30, 2017

Some home sellers would need a sale contract inked before the end of 2017 in order to avoid a big tax bill that would be imposed if the GOP tax reform proposals become law. Both the House and Senate bills would require sellers to have lived in their residence for a longer period of time before qualifying for the capital gains tax exclusion on the sale of a primary home. They would have to live in their house at least five years out of the last eight; right now, the requirement is two years out of the last five.

The Senate version, however, includes an exception for transactions in which a contract is written before Jan. 1, even if the closing occurs in 2018. The bill passed by the House includes no such exception. Therefore, homeowners who are currently thinking about selling have only one month left to complete a deal before proposed tax changes would take effect. Should tax reform be enacted, some homeowners who sell in 2018 may no longer qualify for the capital gains exclusion, which covers up to $250,000 for an individual and $500,000 for a married couple. As a result, the difference between your client’s tax bill pre- and post-tax reform could be huge.

https://youtu.be/jbGfwJBwslk

It won’t be known whether the House or Senate version of tax reform is adopted until the bill is finalized, which could happen in a few weeks. But sellers who haven’t lived in their house for more than five of the last eight years will want to act quickly regardless of the version that is approved.

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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.

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 or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario

Belmont Home Value’s Increase—Is There No End in Sight?

Before we head into the winter slow season for home sales, we’ll take a quick look back at Q3 home sales for Belmont, and the larger San Mateo County.

BELMONT & SAN MATEO COUNTY

HOME SALES—

Belmont had 78 new listings in Q3 as compared to 64 last year during the same period, and increase of 18%.

San Mateo County’s inventory of new listings dropped 6% YOY

INVENTORY/SALES—

Ironically, even with more new listings the inventory dropped 21% YOY. Why? Because sales increased 17% eliminating housing inventory.

SMC’S overall inventory also dropped—31% YOY, and sales dropped by 3.4%

DAYS ON MARKET (DOM) —

The time it took to sell a home in Belmont, on average, dropped from 16 days to 14

SMC Days on market dropped from 27 to 23

MEDIAN HOME PRICE

The median home price increased 12.7% YOY for Q3 for closed homes. When we compared the size of the homes selling in the two periods, there was statistically no difference, at 1784 ft² in 2016 and 1,748 ft² in 2017—so we made no adjustment for square footage interfering with the median home price swing. Note that Belmont it an all-time median home price point this October 2017.

San Mateo COUNTY’S MEDIAN HOME PRICE ROSE 9.5% YOY IN Q3

PERCENT RECEIVED

Belmont home seller’s eked out 4.4% more for their homes over their list price than last year during the same period.

In San Mateo County that number went up to 3.7% of asking

WRAP-UP

In every category in regards to home sale activity, Belmont outperformed and outpaced San Mateo County leading speculation that the peak for Belmont home values have not yet been reached.

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.

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 or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario

 

 

 

 

 

 

Belmont Home Price Increases Slow to a Crawl

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.

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 or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Bay Area Home Values Eclipse Historical Records

Case Shiller Report for June 2017

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.

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 or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario

 

 

New Listings in Pricey Bay Area Counties Rose Significantly

The California Association of REALTORS™  has released a recent report on the state of the California’s housing, naming San Mateo County as having the highest median price in the state. They went one to mention the rising number of new listings. Could this mean that sellers are finally thinking the market is near its top? Will housing inventory open up, and water down the tidal wave of multiple offers? It’s probably too soon in the year to tell, but the tide may be changing, as we commented on at the end of 2016.

• C.A.R.’s Unsold Inventory Index, which measures the number of months needed to sell the supply of homes on the market at the current sales rate, rose to 3.7 months in January from 2.6 months in December. The index stood at 4.3 months in January 2016.

• New listings in pricey Bay Area counties, such as Marin, San Francisco, San Mateo, and Santa Clara rose significantly from December, a possible indication of sellers cashing out robust price appreciation experienced over the past few years.

• New statewide active listings continued to decline, dipping 0.3 percent from December and 10.5 percent from January 2016.

• The median number of days it took to sell a single-family home went up from 33 days in December to 37 days in January but was down from 44.2 days in January 2016.

• C.A.R.’s sales-to-list price ratio* was 98.1 of listing prices statewide in January, 98.2 percent in December and 97.8 in January 2016.

• The average price per square foot** for an existing, single-family home statewide was $240 in January, $242 in December, and $228 in January 2016.
• San Francisco County had the highest price per square foot in January at $841/sq. ft., followed by San Mateo ($723/sq. ft.), and Santa Clara ($567/sq. ft.). Counties with the lowest price per square foot in January included Del Norte ($124/sq. ft.), Kings ($125/sq. ft.), and Kern ($127/sq. ft.).

• After mortgage rates surged in the final few weeks of 2016, the 30-year, fixed-mortgage interest rate averaged 4.15 percent in January, down from 4.2 percent in December but was up from 3.87 percent in January 2016, according to Freddie Mac. The five-year, adjustable-rate mortgage interest rates edged up in January to an average of 3.24 percent, from 3.23 percent in December and 2.98 percent in January 2016.

Reprinted with permission form the California Association of REALTORS®

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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.

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 or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.