Sales of Existing Homes Double in Belmont for December 2010.

For Belmont homeowners there appears to be some stability creeping into the market. Home sales were brisk this December—double what they were in 2009. Those of you who may remember the home buyer tax credit was due to end in November last year which pulled a lot of buyers from December sales into November—all across the country. Not so much in Belmont since the qualifying purchase price had to be less than $800,000. Nevertheless we went back to compare previous December sales and they normally fall in the area of 12 for the month of December. One has to go back to 2005 when the housing market was red hot to see sales figures this high.

These first two graphs illustrate the housing activity in Belmont for the Month of December 2010 and the year end averages for the entire year. Bel chart 1

 

 

 

Bel chrt 2 year end

If we run we run down the usual list of market indicators, across the board there are some positive signs for homeowners.

Belmont December 2010

*Highlighted homes were sold by Drew & Christine Morgan. Click on the graph for a full-sized image.

DOM

The time it took for a seller in Belmont to get a contract on their home was at 58, up only slightly from last year’s 50 and is pretty well mitigated with the doubling of sales.

PERCENT RECEIVED

Belmont sellers received 98.1% of their asking price in December 2010 as compared to 97.22 in December of 2009.

Half of the homes in December 2010 underwent price reductions for on average $58,000 before they sold. Last year 42% of sellers reduced their price by on average $69,000.

Of the 24 sales this last December two sold at the seller’s asking price, 16 sold for less than asking (by on average ($33,488), and six homes sold over the seller’s asking price by on average $17,183.

Homes which sold over asking did so on average in 26 days while homes which sold for less took more than 65 days to sell.*

MEDIAN SALE PRICE

If you’ve followed this blog for any length of time you’ve heard us talk about how deceiving the median price can be in any small sample size. Once again the median home price is a bit misleading as it has the median home price in Belmont in December of 2010 at $912,500. That’s $102,750 (12.7%) more than last year’s $809,750.

So the answer lies somewhere in the numbers but ferreting out a more accurate sense of value is difficult. The size homes which sold in 2009 were on average 277 square feet smaller than the homes which sold in December of 2010, which accounts for most of the perceived median price increase. It just so happens that the size home you could get this year was also around 13% larger than last year—effectively whipping out any gain.

Using the year-end totals helps even out some of the distortion inherent in median price figures as the graph above demonstrates. If you take an average of each month’s median home price in Belmont for 2009, the average median home price was $847,604 and for 2010 it was $908,159—an increase of 7.1%. The average size of the home which sold in the two periods also increased from 1730 in 2009 to 2000 in 2020, a 15.6% increase. So was there any home appreciation in Belmont in 2010? Probably not. It appeared that in the first quarter of 2010 homes might increase in value but as quarters two and three came to a close (immediately following the conclusion of the homebuyer incentive programs) it was clear that would not be the case. The fourth quarter managed to salvage some of the losses in the two previous quarters as you shall probably hear soon n the media.

If you are considering selling your home this year be sure and contact us for a valuation of your home. We are experts in selling peninsula properties and our record of selling every home we list for sale is unparalleled in our industry.

 Note: We throw out homes we know were re-listed or underwent huge price reductions only to sell for slightly higher than their greatly reduced price.

Disclaimer: The information contained in this newsletter 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 Sales – October 2010 Where’s the Beef?

With the election behind us and the stock market rallying to the excitement and anticipation of more economic stimulus and legislative gridlock, Belmont’s housing market continues to show signs of what could be viewed as stagnation at its best, or a double dip at its worst.

This October, housing sales for Belmont revealed a slower market and softening prices compared to October 2009.

 October 2010 Belmont4 
 

(Click the picture for a larger image).

SALES

Thirteen home sales—one shy of last year’s 14, would not normally give great cause for consternation—especially since the sample size in Belmont is so small.  However across the board indicators are eluding to a reluctance on the part of buyers to commit to purchasing a home.

 In light of comments like that of John Paulsen who made a fortune betting on the sub-prime market collapse proclaiming “this is the best time to buy a home in fifty years, exclaiming that, "If you don't own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home” clearly job security is the number one reason buyers are waiting before taking on any new debt.

MEDIAN HOME PRICE

The October median home price in Belmont was $864,200 and appears to have dropped only slightly from October 2009 when it was $865,000. Once again though larger homes sold this October. The median size home sold was 2010 square feet as compared to last year when the median size home sold was only 1760 square feet. Put another way, this year you could buy a home 250 square feet larger (14%) for the essentially the same price as last year.

DOM

The average time it took to sell a home in Belmont this October also went up from 38 days last year to 46 this October.

% RECEIVED

Seller’s also enjoyed getting 99.6% of their asking price last year while this October dropped to 98%.

PRICE REDUCTIONS

Six of the 13 sales this year had lowered their price on average $92,000 to attract a buyer while last year only three sellers reduced their asking price for on average $40,000.

This October while three homes sold for on average $29,000 more than their asking, last October six homes sold over asking for on average $23,000.

The last thing any seller wants is to get less than their asking price and this year more sellers were disappointed as nine homes sold for on average $34,000 less compared to last October when only seven homes sold for on average $30,000 less than their asking price.

In October of both years just one home sold at the seller’s asking price.

COMMENTARY

This fourth quarter slowdown in real estate is not all that unexpected. It’s a fairly mild hiccup at this point which may be attributed in part to election jitters but certainly it’s exacerbated by our own government when they announce they are re-visiting the home mortgage deduction. Of course every year some committee wants to reexamine if they could do away with it to be replaced by a flat t tax, but to do so in a year when the government is spending billions of dollars trying to stimulate the economy, and particularly the housing sector, one wonders why they wouldn’t just table any further debates on the home mortgage deduction until after they economy was on track.

Belmont Housing Price Report – September 2010

September means fall has arrived and nowhere did we see more falling than in the number of home sales in Belmont for this time of year.

Belmont September 2010 copy 

(click here for a full-sized image).

Here are the details:

MEDIAN PRICE:

Once again we had an increase in the median price over last September.  The median price in Belmont for September 2010 was $865,000—an increase of 8% over last September’s $795,000. And this was once again mitigated (or negated) by the size homes which sold in the two periods.

This September the size home sold in Belmont was 1,900 Square feet compared to last year when it was only 1,600. The 300 square foot differential accounts for approximately $144,000 in price variance if you multiply it based on the $480 per square foot that homes sold for over the two periods. Effectively the size home which sold was 18.75% larger but only garnered an 8% higher price tag.

Does this mean that Belmont’s median price is still dropping? Well it certainly means it has dropped in the past two months—but price drops this time of year tend to be seasonal.

NUMBER OF SALES:

Sales of homes in Belmont last month were down by 33% from a year ago. And a year ago sale were down from normal levels. Now 33% wouldn’t mean a lot if we had only three sales a month but we had 18 last September and only 12 this year.

This is no doubt a hangover from the housing stimulus bill that ran out earlier this year and attracted many of the buyers to move earlier in the year.

PRICE STABILIZATION:

It could be temporary, but of the homes which sold, three sold for on average $10,000 over asking (even though one only sold for a dollar more), two sold for the seller’s asking price and seven homes sold for less—by on average $66,000. Compared to last year when no homes sold for more than the seller’s asking price, eight homes sold under and 10 sold at the asking price, this is relatively good news.

DOM:

The time it took to sell the homes increased over last year—up from 45 days to 73.

INVENTORY:

With 64 homes available for sale in Belmont right now prices are sure to remain flat unless buyers begin to feel more comfortable with their job stability, or in some cases, the prospect of a job at all.

PERCENT RECEIVED:

Once again the numbers are down from last September. A year ago the seller could happily receive on average 98% of their asking price and this year that number dropped to 96.65%.

September is typically a month that begins the fall push for housing before buyers go into their winter hibernation mode with brisk sales and sellers typically getting more for their home than during the summer months. This was clearly not the case this September so it will be interesting to see how the October numbers come in.

There are a lot of buyers still sitting on the fence. It’s our opinion that at the end of the year Belmont’s median price will be higher than in 2009 and we expect that to continue at a tepid pace through 2011.

If you are a buyer thinking of making a move, statistically the winter is the best time to snag a deal. Call us is you’d like to get started early!

 

 

Belmont – Home sales for June 2010 in 94002

Belmont June 2010 SALES

Home sales in Belmont held their own as 25 homes sold in the month of June. Last month as you may recall 34 homes sold, the most in as many months. In June of 2009 20 homes sold and last year there wasn't a looming deadline to close escrow for a tax credit.

(click on the graphic for a full size picture)

Speaking of tax credit, don’t forget we’ve effectively extended the $8,000 tax credit by offering any first time buyer 1% of the purchase price as a credit towards their closing costs for anyone who buys a home through us and closes escrow between now and September 30th 2010.

MEDIAN PRICE

The median price took another jump up from $848,500 last month to $975,000—a 15% increase. The size homes which sold during the same period were about 10% larger so there was still some upward pressure on prices not just the fact that larger homes were selling.

DOM

The time it took to sell a home in Belmont was up from 25 days last month to 46 days in June; a pattern that more-or-less holds true each year as folks have graduations and vacations on their minds in lieu of house hunting.

INVENTORY

The number of homes for sale has stayed relatively flat at 66 as compared to 60 in May and 62 one year ago. And the number of new listings appears flat too at around 30 each month. As long as sales continue at this pace inventory should remain in check.

With interest rates hitting the lowest point since records were kept it has helped spur refinances and it remains to be seen if it will spur more fist time homebuyer sales. If you are considering buying a home on the peninsula with rates and values at what appear to be the trough, you may want to consider getting that home you’ve always wanted but perhaps held off for until more favorable conditions—they’re here.

Don't forget we update the market statistics for San Mateo County, San Carlos, Redwood City and Redwood Shores each month on our web site at MorganHomes.com.

Bay Area Housing Reports Show Some Median Price Stability

Just to bring you up to speed on the Bay Area housing market, we’re bringing to your attention a neat little gadget that allows you to see where values are relative to a prior point in time.

The chart we’ve included is based upon data from the Federal Housing Finance Agency’s web site for the San Francisco MSA (Metropolitan Statistical Area), but you can plug in the area where you live and even compare cities.

You’ve no doubt heard of the Case-Shiller report that uses repeat sales pairs to track the median home value more accurately. Essentially they track the same house selling over a period of years. Their methodology can be read here.

Well the U.S. government also tracks repeat home sales pairs to help Freddie Mac and Fanny Mae follow the markets across the country. On their web page they have this really neat calculator where you can input what you paid for a home and it will calculate what the home should be worth today based upon the median trend.

Note for the San Francisco MSA which incorporates San Francisco down to Redwood City we’re beginning to see a leveling off of the free fall that has befell the Bay Area since June of 2006.

We expect seasonal buying and selling trends to continue to vary home prices on a monthly basis but the overall median home price trend will no doubt be relatively flat for several more years to come. Jobs will drive the housing prices in the future, and we’re still running in double digit (11%) unemployment rates in the Bay Area.

Sellers—if you are going to try and wait for prices to dramatically rise you should be prepared to sit in your home for quite a few more years. In others words, if you want to move on in life, now’s as good a time as you’ll see for awhile.

Buyers—since values will probably be flat there’s no reason to rush out and buy a home if you are worrying about missing the bottom, but remember, if interest rates rise your monthly payment will go up dramatically.

Now for the inevitable disclaimer: The information contained in this newsletter 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-July 2009 Home Sales (by request)

We’re posting the sales for Belmont from back in July at the insistence of one of our readers (thanks for being so patient). We skipped that month since we were so busy ourselves. Quite a few buyers came out of the woodwork in July and we noticed it on one of our listings in San Carlos that had multiple offers. In our estimation, the Peninsula real estate market has not recovered significantly enough to warrant such activity but the low interest rates probably spurred people into action—all at once.

July Belm 2009

At 24, July had the most sales and of any month this year.  The median price was also the highest it has been all year at $926,500. But just look at how many homes sold over a million dollars! There were some very large homes selling which definitely propped up the median price temporarily.  We’ll go out on a limb and say that will probably hold for the remainder of the year—and well into the next; mostly because of the seasonal nature of real estate.

The prices that the sellers accepted were far under what their homes were listed for, indicating some tough negotiations by buyers and capitulating by sellers. Fifteen of the 24 homes sold under asking for on average of $ 43,000 less.

Sales in July were still less than half of what they were just a few years ago when homes were flying off the shelves. Still, it’s nice to see a momentary blip—unless you are a buyer. Speaking of that, if you are a buyer, the best time to buy a home is coming up soon. Don’t start your winter hibernation too soon and miss out on what we expect will be some great deals in December and January.

Belmont and the Bay Area Peninsula Housing Downturn

If you’re wondering where the housing downturn is headed in Belmont you can get a good indication by these two snap shots taken for the month of March 2007 and 2009.

We use 2007 as a benchmark since it was the last year where the impact of the housing crises had not yet been realized in our market.

Here are some startling yet revealing statistics:

The far right column of this chart says it all. Every indicator in red illustrates a deterioration of the seller’s market which has prevailed for so long.

You may notice that even though larger homes sold in 2009 the median price still dropped $161,500 in 2009. Adjusting for this, the real median price drop is actually $252,850 or 26%.

Today, on average it will take almost three times as long to sell a home in Belmont; when you do sell you are likely to receive under you asking price. In fact statistically you no longer have any chance of getting over your asking price and the odds of getting less than your asking price has increased by 50%. Sellers now receive on average only 96% of what they ask for their home compared to over 103% in 2007. In real dollars that translates into a swing of $52,000.

In the end, this much anticipated market correction will produce a more stable real estate market. Affordability is increasing and eventually sales will increase as buyers feel more optimistic about the future, including job security and housing stability.

Considering the drop in value we are experiencing, for sellers who are debating a moving out of the area, sooner rather than later will probably produce a better result. In all likelihood it will be many years before inflation drives price points back to levels seen in 2007.

A down market is typically an attractive time for sellers who are thinking of a move up. The logic behind this is a more expensive home is less in real dollars–and also saves you thousands of dollars in property taxes over the life of your ownership. Our current market also includes attractive Interest rates that are at historic lows, though Jumbo loans are not enjoying the full benefit of the government’s intervention.

Buyers who have stable jobs and are planning to live in their first home for five years or more are benefitting the most from the current conditions. Prices are at a low not seen in years, interest rates are at historic lows, the government is paying them $8,000 to buy a home this year, multiple offers are for the most part non-existent and the high inventory levels means there are a lot of homes to choose from.

In every market, there are opportunities. If you would like advice on how to make the most of our current economic climate give us a call at (650) 508-1441.

*Data retreived from the MLS

The information contained in this post is educational and intended for informational purposes only. It does not constitute legal or tax advice, nor does it substitute for legal or tax advice.

Revitalizing a home in Belmont (with background music)

Many of you saw this home on our web page and at the open house. Several homes in the Hallmark area of Belmont have languished on the market for months without selling and everyone has been asking us how we sold our listing so fast. Well, here’s the answer in video form. Obviously we had to price the home attractively but we also had to add value. Preparing a home for sale takes a lot more than staging. Thanks to a cooperative seller, we transformed this home in only a few weeks and the transition was phenomenal–then we listed and sold the home in a week. Take a quick peek at this short video where we show you before and after results–then call us to transform your home for sale.





Download Revitalized Belmont Home

Unveiling our NEW Fusion charts!

Graphs We’re very excited to bring you a new animated version of our graphs depicting the various housing market trends in San Mateo County and the cities which lie within.


Each month we download data from our Multiple Listing Service and analyze the market indicators. We provide this in-depth analysis for several of the many cities we serve on the Peninsula.


We’ve also added short audio tags to describe what we are depicting and help put the information in perspective (Click on the play button to hear a brief introduction).




Another feature will be our “Weekly Graph”. We’re not saying it will change each week but when an interesting trend develops you’ll find it under that tab.


We hope you’ll take a moment to check out our new graphical interface on our “How’s the Market?” link and give us some feedback.

BELMONT-October 2008 Home Sale Report

The housing market is in a state of flux so we spent added time this month helping you understand the numbers and our local Belmont market:

(Click on the report for a size you can read)

Belmont-October 2008 

Understanding the Belmont’s October 2008 housing market takes a lot more than listening to the numbers being bantered about without insight or analysis.

Read on, as we’ll tell you what these indicators mean and how to put them into perspective.

October 2008 Analysis First the overall picture:

We rate each indicator with an arrow depending on its effect relative to increasing home values from a homeowner's perspective. From a buyer's perspective these indicators would all be reversed. In other words, if inventory levels are growing we would rate that with a down arrow since it would put pressure on lower prices—bad for sellers but good for buyers.

Here we explain each indicator:

MEDIAN SIZE HOME SOLD:

This gets a down arrow because the median size home INCREASED in 2008 yet the median home price dropped. If this is taken into consideration the true median home price in October would be $807,639—a 27% year-over-year drop.

AVERAGE LOT SIZE:

                This gets a plus arrow since it accounts for SOME of the discrepancy in the median price from 2007-2008. That’s because while the median home sold in 2008 was larger, the lots were smaller and while the lot size does not have as great an impact on the median price as the home size itself, one must account for this to help explain some of the change in median prices. It’s interesting to note for example that in 2008 none of the high priced homes which sold were in the more sought after area after referred to as “Hallmark”, or more accurately Belmont Woods, while in 2007 four of the 15 sales were in this area—no doubt accounting for some of higher home sale prices.

MEDIAN PRICE

                This is of course the mother of all data point often reported by media organizations. Not to beat a dead horse, but without more explanation this number alone could really throw you for a loop.

Yes the median home price is down significantly for 2007 but one needs to remember that back in 2007 this number was an anomaly and we discounted it back then as such.

The problem is that the median size home that sold this October is dramatically larger than back in 2007 which flies in the face of what the numbers are telling us unless there’s been a substantial decrease in median home values—which undoubtedly there has been—just not to the degree the numbers may be hinting at.

One reason has already been mentioned—the fact that no homes in the tony Hallmark are were included in October’s 2008 sales data. These homes have larger lots—many level—sidewalks, underground utilities and a highly rated elementary school. All factors that are hard to quantify in terms of real dollars, but certainly could explain why the price per square foot in 2007 was $563–$50 more than in 2008.

SALES

                Sales were virtually unchanged—one more this year than last. However, given consumer confidence, which is at its lowest point in its 23 year history at 38.0, this is a great sign since despite consumer worries the pace of homes sales as remained steady. In fact Belmont’s inventory of homes for sale has dropped in recent weeks; though some of the lower inventory is attributable to the fact that in the last two weeks NO NEW LISTINGS have come on the market—a first as far back as we can remember!

 

From the Consumer Confidence web site:

“The Conference Board Consumer Confidence Index™, which had improved moderately in September, fell to an all-time low in October. The Index now stands at 38.0 (1985=100), down from 61.4 in September. The Present Situation Index decreased to 41.9 from 61.1 last month. The Expectations Index declined to 35.5 from 61.5 in September.

“The Consumer Confidence Survey™ is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for October's preliminary results was October 21st.”

DAYS ON THE MARKET

                This stat tells us how long it takes to sell a home. At first glance it appears to have dropped by a few days this year which would be a sign that homes are selling faster. Further analysis reveals that the Total Days on Market (also referred to as the continuous days on the market) has actually increased. What can account for this? Simply put, more agents are playing the game of re-listing a home that has been sitting on the market too long. That resets the Days on Market stat which consumers see but not the CDOM stat that agents are privy too. Don’t worry, your agent must disclose the real CDOM if you are making an offer.

HOMES SOLD OVER/UNDER ASKING

                More homes sold over asking this year than last October but that isn’t important if prices are lower. This could just mean that more agents are pricing homes lower intentionally in order to bring more attention and get homes sold in multiple offers (yes multiple offers are still happening on well priced properties). What’s important to note here is that homes which sold over the asking price sold for half of the amount over in 2008 as they did in 2007; and homes that sold under the asking price sold for twice as much less in 2008 as compared to 2007. That’s definitely a sign a weaker market.

NUMBER/AVERAGE REDUCTIONS

                This number provides us with little insight this month as these two periods are virtually unchanged. It’s nevertheless a good sign that they haven’t increased significantly at all.

PERCENT RECEIVED OF ASKING

                This number can also be misleading if homes are selling for significantly less, but closer to the asking price—this number could actually be higher in a down market. All it would take is for sellers to list their homes decidedly lower than market value, get multiple offers and create an environment where the homes sell over the asking price, yet lower in real dollars.

If you’ve gotten this far good for you. These are just some of the variables we take into consideration when analyzing our local market. So what does all this mean for home values in Belmont?

We expect prices to decrease year over year into 2009. On what magnitude? Probably not much since Belmont is insulated rather nicely on the Peninsula with no room for real growth and a relatively short supply of homes. Of course the impact of the current recession (yes we believe we are in a recession) and its affect on jobs will be a determining factor for inventory levels—if homeowners are forced to sell due to job relocation or losses and the market is flooded with homes for sale, with few new home buyer prospects prices could drop precipitously—in the neighborhood of 15%. Absent those dire conditions we expect a tamer drop of 6-8% through the third quarter of 2009. The next several years may remain flat in terms of appreciation has trepidatious buyers reluctantly return to the home buying market.

Other extraneous factors such as the cost of money could have a huge bearing on prices as well. Homeowner affordability is a key factor in bringing buyers into the market and while lower prices mean more buyers can afford homes, any increase in interest rates could easily wipe out the savings of lower home prices and forestall any market rebound.

This information is for entertainment purposes only and includes no legal, accounting or real estate advice nor is this intended to be specific to your situation-always consult a specialist who is familiar with the details of your situation. Data retreived from the multiple listing service–ProLIstings, San Mateo County