Shift in Housing Market Scares Young Buyers Away

The Interest Rate Hike Effect

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

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

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

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

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

Where We Stand Today

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

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

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

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

What is Different Now

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

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

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

Is this a Correction?

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

Gaining Some Perspective

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

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

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

How to Stop Agents from Behaving Badly at Your Expense

If you’re considering selling your home, you’ve probably also been thinking about how to go about finding the right real estate agent to help.

Choosing precisely the right real estate representation makes a bigger difference than you might ever imagine. So where does one begin?

DEFINING A TOP AGENT

REALTORS banter around the term “Top Agent” quite loosely—Top 1%, Top 10%, etc. They earn that title for dollar volume in sales—not any independent measurement of the quality of their work or survey from past clients. In the Bay Area, most agents surpass any threshold for earning the Top award distinction due to the median sales prices—not the they are any better than their colleagues in Kansas who need to sell 10 times the number of homes to garner that distinction.

Discard any idea of using on-line companies that recommend agents or say they will “find” you a perfect match. These are nothing more than companies extorting money from agents to be in their directory. They are not recommending the best agents, but rather the ones willing to pay to be recommended.

YELP tends to do the same thing. Although the reviews are organic in nature, agents must pay to be listed at the top of the search, even though they are often far from top agents.

Agents with the most listings or yard signs in a neighborhood are also not necessarily the agent doing the best job, they’re just getting the most attention.

Doing a native on-line search is more time consuming, but it will yield you the best results. Search for local agents that have been in the business long enough to have learned the ropes at someone else’s expense. Any real training of agents happens in the field, not the classroom. Look for examples of their work product on their own web sites—video tours, photos, and descriptive informational pieces.

THE MEET

Once you’ve found an agent you’d like to meet with, reach out and set up an initial meeting. Don’t call three of four agents all at once. It takes hours to prepare for a meeting and you’re wasting agents’ valuable time.

If you’re not happy with the first agent you meet, by all means contact another.

No two REALTORS are the same and each one acts essentially as their own independent contractor. They develop a business plan on their own and so you’re really hiring the agent, not the company they work for.

Are their differences in the companies’ agents work for? Sure, but far less important than the agents you’re hiring.  Most agents will focus on how big (or small) their company is—how much “market share” and how much “technology” they have but how does that really benefit you?

The fact is most agents are capable of selling your home in this seller’s market, but the service they offer and the attention to detail and marketing varies greatly.

With that invariably comes differing degrees of success and results.

SELECTING AN AGENT—WHAT QUESTIONS TO ASK

These are the questions most sellers are prepared to ask:

  • How much do you charge?
  • What do you think my home is worth?

More detailed sellers might throw in a few more:

  • How long have you been in business?
  • In what cities do you specialize?
  • Do you work with mostly sellers, or buyers?
  • Do you have referrals with whom we may speak?

And that’s pretty much the extent of most sellers’ questions. The two which paradoxically seem to carry the most weight are two sellers always ask—how much is my home worth and what do you charge. These are two very important questions, but they should have little to do with choosing an agent. You can always find a discount agent to sell your home and you will most certainly get cut rate service and results as well.

The price the agent tells you your home is worth should also have little to do with whether you hire them. You get to pick the asking price for your home and if you’ve watched sales in your neighborhood, you probably have a pretty good idea at what price homes are selling.

Be careful not to decide on your agent based solely on the highest estimated sale price you hear, since that agent may not know your market or could be trying to “buy” your listing—meaning they are trying to get you to list with them under the pretense that they can magically get more for your home just by asking for it. Unfortunately, it just doesn’t work that way.

Buyers choose the price they are willing to pay for your home—not you as a seller or your agent!

We’ve heard sellers say, “We’re going to hire the REALTOR that sold our friends house—they said that they liked him and felt that he did a good job.”

And perhaps they did do a good job, but then again maybe the seller just thought because they received multiple offers well over the asking price that they must have done a good job. But could they have done better? 

THE MOST IMPORTANT QUESTION

Results. Before you’d consider having any important surgery done, wouldn’t you like to know what your Doctor’s survival rate is for his patients? How many operations has she performed? How much they charge would probably be the least of your concerns, so long as you survive to pay the bill.

Wouldn’t it be nice before booking a flight to know how long the pilot has been flying and how many hours they’ve logged?

Any agent can proclaim to be the best, or sell their listings for more in a shorter period of time, but you need to ask for proof. 

IT DOESN’T GET UGLIER THAN THIS

These sellers probably thought their agent did a good job as well. After all, they received $126,000 over asking!

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When the sellers hired these agents, they no doubt never expected this shoddy work product would be what they received—and we can all but guarantee that it’s not what was promised.

This is what is referred to as a Moral Hazard—wherein under the contractual protection of a listing agreement an agent takes advantage of their client—promising one thing and doing another.

But as bad as the photo of the home on its side may be, the agents went on to boast in the private comments (in red) to all agents, that had they waited to hear offers, they would have received three more—and one back-up offer was for $25,000 more than the early offer they may have steered their seller into accepting. To add insult to injury, when they went back into the listing to amend the comments with self-aggrandized accolades once it closed, they still never took the time to fix the photo. So great job Dino!

This may be a gross example of agents taking advantage of a seller, but many agents are guilty of taking the path of least resistance, (e.g. work), to get paid.

We can’t count how many times we’ve represented a buyer, delivered an offer only to receive a call late at night that the seller accepted a different offer. Many times, if the agent had reached out to us, our buyers would have stepped up in price and the seller would have received even more for their home.

We often download disclosures for our buyers which is an indication that we have a very interested party. An offer date is set and we rarely if ever receive a call from the listing agents asking if our buyers are interested in making an offer, and if not, why.

BROKER TOUR, OPEN HOUSES & ADVERSE SELECTION

Agents will probably tell you that they will hold open your home for all agents to view on a special day referred to as “Broker Tour Day”. They may even tell you that they will serve food to attract the masses. And unless you ask if they will be present—they usually won’t. Agent Teams that have someone different for every aspect of the job are especially guilty of this. Many times, they don’t even go that far—they have a vendor such as a mortgage company hold open the home so they don’t have to bother being present. Other times we’ve seen the “Catered Broker Tour Lunch” promised to the seller relegated to a tray of stale sandwiches on a counter with the agent nowhere to be found. Being present at an open house is critical to answer other agents’ questions about the home. 

Unfortunately, these breaches in moral behavior are more common than not.

YOU CAN DO BETTER

Do your homework. Research agents organically on-line to see what work product they are capable of and delivering. Then, be armed with the best questions most agents are ill prepared to answer.

If you’re interested in receiving a list of questions every seller should be asking, we’d be glad to deliver 35 of the best questions when we meet in-person for our initial visit.

Here’s a preview…

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.

A LOOK AT 2021 HOUSING AND WHAT LIES AHEAD IN 2022

Unless you’ve been living under a rock the past two years, you’ve no doubt heard that home values climbed their assent into the stratosphere.

Stratosphere

But as local agents for over 25 years, even we have a hard time wrapping our heads around the staggering numbers.

You may have also heard that there’s “no inventory”. Well, that’s not exactly true.

Then what’s causing the spike in prices? High demand, not lack of supply—unlike the overall economy that’s suffering from a lack of supply and high demand.

Comparing the annual number for 2020 to 2021, we’ll start with the inventory of homes for sale.

The number of new listings that came on the market in 2020 was 234 in 2020 and 249 in 2021 which is an increase of 6.4% more homes available for sale in 2021. Then why is everyone talking about low inventory? Because sales went from 183 units in 2020 to 254 in 2021—a whopping 38% increase—so there are no homes left to buy.

One might ponder, “How can that be?” If you only have an increase of 6.4% in new listings, how can you have 38% more sales. The answer is everything is selling in 2021 while in 2020 some of those new listings never made it into escrow.

That’s evident in the days on market, which dropped 45%, from 20 days to only 11, and the percent a seller received over the asking price climbed from 105% in 2020 to 114% in 2021. 

Another indicator of the scant number of homes available at any given moment is the “Months of Inventory” statistic, that measures how long it would take to sell all of the available inventory at the current rate of sales. That dropped from a meager .4 months, to an almost immeasurable .1 month, (overall, the U.S. stands at around six months of inventory at any given time).

What effect did this have on home values? Nothing, but it had a lot to do with home prices. They hit their highest level in history recording a median home price of $2,245,000 up from $1,888,000—a 19% increase YOY and a 28% increase in the past two years—while the size of homes selling in the last two periods stayed statistically similar at 1,968 and 1,962 square feet respectively. 

This is an article we did back in 2018 on the supposed crest of interest rate hikes.

There is some cooling off of the astronomical climb in prices as noted by the Case-Shiller study for the Bay Area’s metropolitan area, but that may not reflect our local hot spot trends in the mid-peninsula.

What to Watch Out For

Rising Interest Rates

Rising interest rates may give buyers some relief from a super-heated market, may also serve to quell their purchasing power while softening prices. The irony is just when buyers may be able to compete in the market, even if they were to pay less for a home, they’ll end up paying more in interest in their loans.

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

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

2581 Hallmark Drive – JUST LISTED!

Four walls and a roof over your head isn’t the only way we define the word ‘home.’ Home is more than just a shelter, it’s where we love, it’s where we feel, it’s where we can be ourselves and it’s where life happens—this home fulfills all of those dreams. We could describe it as chic, luxurious, inviting, and comfortable, but one really must see this home in-person to appreciate the complete experience.

Built by Blackwell, this home is the highly coveted single-level “Carlmont” model in prestigious Upper Hallmark. It has been lovingly enhanced, remodeled, and remade in a contemporary style best described as “living at the same time; belonging to the same time”. The result? Gracious, streamlined spaces that radiate harmony.

Step from the slate tiled front porch, inside to the formal entry and step upon rich hardwood flooring that emanates throughout the entire living area. We first come to the large open office and spacious remade great room which includes a custom modern gas fireplace with tiled mantle façade.

Soaring ceilings guide you through the open style formal dining room to a copious entertainment area encompassing a family room with a glass gas fireplace and granite hearth, nearby an expansive gourmet kitchen. 

This remarkable kitchen was redesigned with soaring ceilings and a generous island offering a place for casual meals, conversations or food preparation station. Here we also find a butler’s bar with built-in wine storage, and a smart glass doored pantry. Crisp white cabinetry wakes up one’s senses and are keenly offset by the warm Caesarstone® counters. A welcoming array of high-end stainless appliances including a large LG® refrigeration unit, Viking® combination microwave and convection oven, Dacor® six burner gas stove top with Viking®stainless hood, and Bosch® dishwasher make this kitchen deeply functional while staying true to the sensible flow for guests and home chefs alike.

Down the hallway we uncover three more bedrooms and several more baths—all updated to today’s demanding standards. The owner’s ensuite enjoys its own private place to bathe in luxury with a grand walk-in shower and seamless glass doors. A secluded water closet with Toto commode, dual sinks, while the fine cabinetry even has powered drawers to keep the Caesarstone® counters uncluttered while the adjacent full walk-in closet can accommodate the most extensive wardrobe.

The level rear yard is perfect for entertainment options which features a wood deck with overhead LED illuminated lighting, patio dining area and grass play area. Dine alfresco and enjoy the wooded Hallmark Park backdrop in this delightful rear yard.

Prestigious Belmont Heights, also known as the Hallmark area of Belmont, is an admired and picturesque location. This area is adjacent to over 1,000 acres of open space and trails, with sweeping panoramic views of San Francisco and the Bay. Over the back fence is Hallmark Park which has tennis courts, children’s play area, with views of neighboring Crystal Springs Reservoir and the open space. 

Belmont is ideally located on the Peninsula between San Francisco and the Silicon Valley with SFO International airport just a short drive away. It’s close proximity to major travel arteries—Highway 101, 280 and Caltrain are only a few miles away. For this very reason, many who choose to live here select this strategically ideal location. The Carlmont Village Shopping Center offers a variety of retailers and restaurants including Starbucks, Hassett Ace Hardware, Lunardi’s, Bank of America and Ladera Nursery. Nearby popular gathering spots include, Vivace Ristorante, Iberia Restaurant, Waterdog Tavern and the Farm House Restaurant.

Contact us to find out why more people are moving to the Mid-Peninsula. 650-508-1441

  • Four bedrooms—one currently employed as an office
  • Two and 1/2 updated baths—shower over tub
  • Owners ensuite—hardwood flooring, Toto® commode, walk-in closet with built-in organizers, recessed lighting and soaring ceilings.
  • Updated island kitchen with newer sleek appliances including L.G Refrigerator and Bosch® dishwasher, Dacor® six burner gas stove, Viking® stainless hood and oven including microwave and convection oven.
  • Large open communal kitchen and family room—granite façade glass rock gas fireplace
  • Large great room with soaring ceilings, recessed lighting—full wall tiled gas fireplace
  • Approximate sq. ft. ~2,210 sq. ft. home
  • Substantial ~7,800 sq. ft. lot
  • Built in 1974—updated by current owner
  • Rich engineered hardwood flooring
  • Multiple outdoor dining and entertainment deck areas—level rear grass yard area
  • Newer heating and air conditioning—NEST® controls
  • Solar panels (owned) with German Sonnen® battery storage system
  • New electrical panels and wiring
  • Rachio® smart watering system
  • Ring® security cameras
  • Three-car attached garage—completely finished space
  • RV or boat parking with power and dump station
  • Award winning Belmont schools
  • 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

Click here for a 3D tour of this fantastic home!

OFF-MARKET OPPORTUNITY 1926 Oak Knoll Drive, Belmont

Every so often, there’s a home so special that words cannot do it justice. We could describe it as chic, modern, high-tech, luxurious, inviting and comfortable, but one really must see this home in person to appreciate the complete experience.

This nine-year new classically crafted home has been designed in a contemporary style best described as offering clean lines, proportions, open layouts and abundant natural light. Additional characteristics include flat and shallow-pitched roofs, large expanses of glass, clean unencumbered walls, and an intrinsic connection between the indoor and outdoor space. The result? Gracious, streamlined spaces that radiate harmony.

The entire main floor is thoughtfully laid out with a ground level bedroom, full bath, great room, grand dining area, and kitchen combination. The great room on the main level, encompasses a professional styled kitchen, impressive communal dining area, and an eat-at bar and separate enclave for casual meals or conversations. Functionality includes a six burner Viking® stainless stove and oven combination, warming drawer, deep soft-close drawers while industrial-styled custom concrete countertops complete the chic feel. With a separate stainless prep sink and custom metro shelved pantry, this kitchen remains deeply functional while staying true to the minimalist aesthetic.

Rooms are naturally illuminated with a combination of celestial skylights and transom room transitions. Floor–to-ceiling windows feature expansive views of San Francisco City, the Bay, Mt. Diablo as well as 180º views from the pronounced view deck—harmoniously integrating the indoors with the world.

Bamboo hardwood flooring and stainless cabled railings flow gracefully throughout the home and the inverted layout with the bedrooms below, exemplifies the views from the upstairs main living area.

Down the naturally illuminated open stairwell, we find the lower level bedrooms—perfectly located for warm summer nights. The lower area consists of a main hall with nine foot ceilings leading to the laundry area, two bedrooms serviced by a central hall bath, and a bonus room or 5thbedroom. Also on this level is the owner’s ensuite, which enjoys its own private deck access with spa overlooking the bay. A dual floating sink vanity is in the owner’s suite bath along with a seamless separate shower enclosure and oversized soaking tub and a walk-in closet is nearby.

To visit 1926 Oak Knoll is to realize the passion that went into creating this unique home. We are excited to proudly present this enchanting retreat— welcome home!

FEATURES:

HOME

  • Nine-year new construction with ~68 posts and piers
  • Quiet cul-de-sac
  • Protected micro-climate location
  • Street level entry main living area-reverse floor plan
  • Hardwood Bamboo floors
  • Smooth stucco & sheetrock wall finish
  • Contemporary styling
  • Transom windows
  • Solid core doors
  • Led recessed lighting
  • Stainless cabled railings
  • Dual pane Anderson windows
  • Tankless water heater

MAIN LEVEL

  • Great room with ~11’ gradient ceilings
  • Large communal dining area
  • Celestial windows with automated opening system
  • Open style great room floor plan with pitched ceilings and stunning views
  • Corner low-heat glass fireplace
  • Office, Media room or additional bedroom
  • Two car garage—S.F. views, and plumbed for H&C convenient car washing

CHEF’S KITCHEN

  • Six burner Viking® stove & stainless hood
  • Built-in Viking® microwave
  • Side prep sink
  • Deep cabinetry drawer for professional cooking vessels
  • Walk-in pantry includes custom metro shelving
  • Appliance garage
  • Built-in warming drawer
  • Stainless basin sinks
  • Stainless floating hood
  • Custom concrete counters

FUNCTIONAL VIEW DECKS

  • Multiple private view decks with spa—plumbed for natural gas outdoor grill
  • 180º  bay views of San Francisco downtown & Bay, Mt. Diablo to the south bay
  • Eastern profile for dramatic sunrises year round

GROUNDS

  • Level lower area with large flat paved space suitable for basketball (hoop installed w/lighting), play area or entertaining
  • Gardening beds
  • Mature plantings on almost ¼ acre includes chicken coop and run

OWNER’S SUITE

  • Expansive walk-in closet, soaking tub and separate seamless shower enclosure,
  • Dual raised sinks on floating cabinetry
  • Access to private second level decks and spa
  • ~9’ ceilings

LOWER LEVEL

  • Owner’s Suite and three additional bedrooms
  • Amazing lower level storage areas with ideal wine storage capacity
  • 2nd level room could be 5th bedroom
  • 9’ ceilings

When is the Best Time to Sell My Home?

When is the best time to sell my home is perhaps one of the top five questions we are frequently asked. On my desk I have a crystal ball—literally. And often when I am asked to venture a guesstimate as to how the real estate market will perform, I simply stare down at the glass orb until my clients’ eyes follow mine to my point of fixation, and they realize their question was really impossible for me to answer with any certainty.

If you’re read our blog page, you know I love to look at the numbers—how much have homes have gone up, what percent sellers are receiving of asking, etc.

These numbers don’t really tell me what will happen—they’re historical numbers so they only tell me what did happen. But before we get started, no decent look at the market would be worth anything if we didn’t first explain our thought process and methodology.

In assigning probabilities, there are two common to employ. Frequency based probabilities, which rely and past data points to lend credibility to predicting a future event, and subjective probabilities based upon our belief that something will or will not occur.

Of course the belief or subjective probability approach at first glance appears just as the name infers—that it’s too subjective. However it’s actually quite important, and you probably use this approach more often than you do frequency based analysis when conducting your day-to-day assessment of say, whether or not you think the price of gas will be lower next week to decide if you want to wait to fill up then.

What about when we use both approaches, or aren’t sure which one is more appropriate for a given situation? Refinancing your home is a good example. Today’s question might be, “Will rates go lower than they are today, or will they soon rise to more historical levels?”. Here we might use frequency based analysis to look at the historical trend of mortgage rates and see where they are today in relation to average historical rates. Seeing how they are near the bottom of where rates have been over the last 30 years, one might conclude that they have nowhere to go but up, yet once again they dropped this October even after the Fed’s all but promised a rate hike—because things change.

One of the problems inherent in using only frequency based analysis is that there’s a trade-off between accuracy of the information (having enough data points) and relevancy (how old is the data). Going back further and plotting more data points is certainly going to give us more information to evaluate, but the relevancy begins to drop off as we got too far back in time, when say our economy was in a different state— pre-internet for example.

So it is with these probability approaches in mind that we deliver to you our trend for the percent a seller receives of their asking price–each month of the year, over the past 17 years. Glancing at the graph one can easily see that spring appears to be the best point at which sellers get the highest percentage of their asking price. Note: the months tagged in the graph above the line are the months in that year where the seller received the highest percentage of their asking, while the red numbers below the line illustrate the month in each year where the seller received the least percent of their asking price. **clicking on these graphs will bring up an enlarged image.Best Time To Sell A Home

These are the percentages of frequency in occurrence where each one has an 8.3% (1/12) equal chance of homes selling either over or under the asking price in a given month.Best Months

May is a clear winner as to when reported sales of homes showed that sellers obtained the highest percent over their asking price—statistically. Since most of May’s homes probably sold in April, it’s more likely that the sale actually was consummated in April with a typical 30 day list to close time frame.

The problem with probabilities based solely upon past performance is that things can change quickly. Governments can topple or be overthrown sending the world into economic panic, external natural effects such as tornados, tidal waves, droughts, El Nino events, etc. can all contribute to altering selling and buying patterns. For example, October never shows up as a month where the least amount a seller received occurred, except for in 2001, after the September 11th terrorist’s attacks.

Also interesting to note is that if one breaks down this graph into pre-Deep Recession and Post Recovery periods there’s much less of a clear distinction as to which month is consistently a winner—or loser. An important and fair distinction should also be made in relying solely upon the percent a seller receives of asking as a definitive demarcation as to when selling your home is optimal. Sellers could be pricing their homes lower in the spring than they do later in the year, when new higher price levels have already been achieved. So measuring how much the seller received in real dollars is actually more important, but doing so involves tracking the median price trend which is easily influenced by relatively small market samples when larger or smaller homes sell in a given month. Tracking the price per square foot per month would help add more information into the mix, but that is susceptible to errors when homes with larger or smaller lots are involved.

And to throw the final wrench into the works, one must remember that during these 17 years there have been two recessions, and a lot of variance of interest rates and various government stimulus packages which have influenced people’s personal behaviors one month over another, not to mention El Nino’s and droughts which also have affected buying and selling patterns.

We hope this has helped further the cause of trying to turn the uncertainty of when to sell your home into a measurable risk. But remember, as Mark Twain is attributed to having once said, “History doesn’t repeat itself, but it does rhyme”.

 

 

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 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them 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.

 

 

Shh…My Home’s for Sale

Next time new neighbors appear mysteriously, they might have snagged a pocket listing in the neighborhood.

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Best Belmont Deal of the Week 1.11.11

Tuesday is our tour day and this home was the best deal we found in Belmont. It's located in a GREAT area of Belmont with a nice micro climate. It's hard to beat the west side for $749,000. This home shouldn't last a week.

 

   
 
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1514 FOLGER DR, Belmont 94002 (Belmont)
$749,950 Beds: 3 beds Baths: 2|0 baths		  
DOM: 4   MLS: 81100860 
Property Overview
1514 FOLGER DR
Belmont (Belmont) 94002
Detached Single Family (Class 1)
Beds, Baths: 3, 2|0
SqFt: 1,790
Lot: 9,600 sq ft
Yr Built / Age: 1946 / 65 years
Assoc Fee:  
List Price: $749,950
Sale Price:  
Sale Date:  
COE Date:  
Remarks
Cute, Country Style Home on large lot. Single-story home has 3 Bedrooms, 2 Baths + permitted BONUS recreational/TV room in basement area. Cute kitchen w/newer appliances.Updated bathrooms. Enjoy expansive patio with built-in BBQ & nice green lawn area. Detached & refurbished 2 Car Garage has bonus area that can be finished off as office or workspace. Call for appointment…Owner Occupied.
Schools/Districts
Elem: Central Elementary/ Belmont-Redwood Shores Elementary
Middle: Ralston Intermediate
High: Carlmont High/ Sequoia Union High
Property Features
Familyroom
No Family Room

Informal Dining Area
Breakfast Bar

Formal Dining Area
Separate Dining Room

Other Rooms
Recreation Room

Bedroom Descriptions
1 Master Bedroom Suite

Shower And Tub
1 Shower over Tub

Shower
1 Stall Shower

Other Areas
Full Basement

 Amenities
220 Volts in Kitchen
220 Volts in Laundry Area
Cable TV Available
Gas Hookup in Kitchen
Gas Water Heater

Fireplace Location
Fireplace in Living Room

Floor Covering(S)
Hardwood

Energy Features
Insulated Hot Water Heater
Low-Flow Toilet(s)

 Listing Includes
1 Dishwasher
1 Refrigerator
Built-In Oven/Range Combo
Dryer
Washer

Garage/Parking
2 Car Garage

Lot Description
    - -

View
Neighborhood View

 Yards/Grounds
Barbecue Area
Dog Run/Kennel
Patio

Has Pool
No Pool

Pool Description
    - -

Pool Options
    - -

Style
Country English

Horse Property
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Horse Property Description
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Bay Area Housing Prices Rise– Case-Shiller Report June 2010

We’re thinking we should simply name this series after our last post, “There you go again”, in honor of the media whenever it manages to make a mountain out of a molehill.

Typically, bad news is negative news since that’s what sells, but sometimes when the media get scooped by another outlet, they will try and dig up an opposing opinion in order to get a piece of the attention; further managing to confuse (or mislead) their audience.

We see it over the spectrum of issues, but one common theme is they are typically issues that are “hot buttons” with their audience, like the economy, housing, jobs etc.

It’s not hard to point out their lack of diligence—to dig a little deeper and ask “why”. So why don’t they do it? In today’s sound-bite media world it’s not about accurate reporting so much as getting the story out there fast and first.

We tend catch slanted real estate reporting since it is what can easily spot, but it’s prevalent in many other areas as well.

Take our last post pointing out the misleading report on housing sales decline. Almost simultaneous with that report was a report on the median price increasing. So they managed to exaggerate the report on the sales decline and overstate the median price increase. What’s a person to do?

If you’re like us we’re sure you’d like to reply on the news you hear as accurate, but unfortunately, that’s not always the case. Sometimes you have to dig deeper. Of course we’ll try and take some of that burden off of you. If you check in here regularly we try and ferret out the real stuff from the fluff.

What was wrong with their story about the median price increase in the Bay Area? On the surface nothing—the median price did increase in the Bay Area. But they are insinuating by the context in which they issue the report  that the median price increase is representative of home values going up. In fact, often times the median price changes have more to do with the mix of larger or smaller homes selling than it has to do with varying prices.

As in when the media reported that the sales of homes had decreased in San Mateo County by the highest margin in 15 years, but failed to mention that the data they were basing their story on had yet to be released and was only estimated. They also reported that the median price in San Mateo had increased without mentioning that is was in all likelihood a result of larger homes selling rather than prices increasing, as reported by the California Association of Realtors who provided the information they relied on.

This is from the California Association of Realtor press release. The same one cited in articles discussing the Bay Area median price gain.

“Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices for July may be exaggerated due to compositional changes in housing demand…”

And indeed if one digs deeper they find that foreclosures, which pulled the median prices down, and which accounted for nearly 50 %of all sales had dwindled significantly.

Did the values of homes in the Bay Area rise? In some areas in fact they did, just not as much as reported. The case-shriller report which looks at the same house selling repeated times, and thus considerably a more reliable source, shows that indeed values have been rising steadily since April of 2009.

As with the report on declining sales, in the end is their report wrong? No. just not as accurate as it could be.