The election year introduced a temporary pause in the ongoing rebound of home sales and prices.
Continue readingHow to Price a Home in the Bay Area or Gamble and Stand to Lose Everything
What you May Not Know About Pricing a Home
Pricing a home in an uncertain market is much harder than it has been in the past few years, where so long as a home was priced low enough, it would garner multiple offers and be bid up to what the current market could bear.
How This Effects Sellers
The reason multiple offers generate over asking bids is obvious—somebody wants to own that home and offering below or at the asking price is a waste of time with other competitive bidders.
But what you may not be aware of, is the discrepancy in the offers received. Frequently we see offers ranging from at the asking price to hundreds of thousands of dollars over asking. What nobody except the seller and their agent knows is that the spread between the highest offer and the second highest bidder is often $100,000 or more apart.
This is exactly why when pricing a home, you want to price it so that multiple bidders will compete, and the winner will have paid too much—more than anyone else was willing to bid.
In investing it’s referred to as the Great Fool Rule Theory—and it works to a seller’s advantage. This is a study performed at Berkeley where they proved that bidding caused people to overpay. They call it The Bidder’s Curse aka The Winner’s Curse.
Here is an excerpt from their analysis linked above:
“An example that compares closely to our empirical analysis and research design is real estate auctions. Ashenfelter and Genesove (1992) document auctions of 83 condominium apartments in New Jersey, which — when the auction sale unexpectedly fell through — sold at significantly lower prices in face-to-face negotiations. The findings in this paper suggest that the large number of auction participants was a key determinant. It ensured the presence of overbidders.” — The Bidder’s Curse, Young Han Lee Ulrike Malmendier, May 13, 2008
The Rest of The Story
The recent sales we pulled in San Mateo County tell the whole story. We looked at all sales for homes listed after the market changed in April of 2022 to date of this writing, (July 29,2022).
The average days on market was 12, and the sellers received 106% of their asking price—not bad. But looking closer, we broke down the sales further to find a correlation between homes that received under their asking price and those which received over their asking price as compared to how long they were on the market, and the numbers tell the rest of the story.
Pricing a home too high means it will languish on the market, but it also means you will receive far less for your home.
Homes which were priced well, attracted multiple offers, and sold for over the asking price, in on average 9.5 days for 112% over the asking price
Homes which sold right at the asking price, sold on average in 12 days.*
Homes which sold for less than asking, took 21 days to sell, and the seller’s received only 93% of asking.
That represents a whopping 19% difference between a home that languishes on the market and one that sells quickly.
For the median price home in San Mateo County, that 19% deficit represents a loss of $361,000 in real dollars.
Price Reduction Correlation
Homes that sold over the asking price represented 70% of all sales. There were only five of those homes which had price reductions, and all sold over the original asking price once lowered. Our experience tells us that these homes probably received multiple offers after the price reductions which is the only rational explanation as to why they would be bid up beyond what a buyer could have purchased the home for prior to the reduction.
Homes that sold at the asking price represented only 4% of the sales, or 20 homes. (*We excluded another 25 homes that sold at the asking price as they were non-arms’ length transactions—sold off market in zero days).
Homes which sold under the asking price represented 26% of all sales, with 40% enduring price reductions averaging $213,00 in reductions of the asking price.
Pricing Your Home
As we’ve discussed in a prior post, many sellers make the mistake of focusing on two questions. How much do you charge and how much is my home worth—two of the least important questions.
To answer the first question, how much an agent charges may be inconsequential if they are the one able to net you that 19% more—It makes a full commission look paltry in comparison.
The second question of how much your home is worth is equally unimportant to ask your agent. What your agent needs to know is how to price it to attract bidders. What he or she thinks your home will sell for, doesn’t change the outcome of what you will receive.
Often sellers fall into the confirmation bias trap. They hire an agent based upon the answer to these two questions almost entirely. The agents who tell them what they think their home is worth—or more—that is aligned with their preconceived notions, is the agent they subconsciously tend to be drawn to as they feel a common bond with a like-minded being.
Buying a Listing
This trap is what many agents leverage. Some agents will tell you what your home is worth based solely upon what they think you want to hear—or even higher. It’s called in our industry “Buying a Listing”. Sellers are of course delighted to hear that their home is worth more than they thought. Why? Because the agent told them so? But the agent is not buying their home—they’re just buying the listing—so their opinion is irrelevant and does more harm than good, as we have demonstrated. These agents represent some of the above 26% that promised a high price, and were forced to backtrack and convince the seller to lower the price until the home finally sells.
Failing to properly learn the right questions to ask an agent, is gambling with your biggest asset, and we all know the house will eventually take everything.
Here are a few more good reads if you are considering selling your home:
How to Stop Agents from Behaving Badly at Your Expense
Why Open Houses May Not Ever Have Been Necessary After All
If you’re considering selling your home, contact us for an honest evaluation.
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.
Housing Market’s Unbearable Heat
The Bay Area housing market is as hot as it’s ever been for sellers, but the real heat is on buyers to get a home as throngs enter the market. It’s no longer race to get a home, it’s a marathon.

Frustrated buyers are using low interest rates which have empowered them to bid higher in multiple offer situations. The result, prices are rapidly rising.
Take San Mateo County for example. We compared May of 2020 to this year and across the board, the numbers show high demand and higher prices.

Reports of low inventory creating the feverish market are simply misreported. Low inventory implies there are no homes for sale, but looking at the numbers, one can easily see that the number of New Listings are up 14.2% over last year, while inventory of available homes to purchase is down 36%. There are scant homes to choose between, because more homes are selling and faster than before, not because fewer homes are coming to market.
The Months of Inventory in the last column says it all. Months of inventory represents the time it would take to sell the current inventory of homes at the current sales pace. That’s down from 2.4 months of inventory last year to less than one month of inventory in 2021 (the national average is typically six months of inventory).
The YOY median home sale price increase of a staggering 26% YOY illustrates the effect of demand outstripping supply, as buyers outbid one another to secure a home before interest rates rise, and their buying power is reduced, or their mortgage payment goes up.
In our town of Belmont, we see a similar pattern, but since it’s a smaller sample size, some of the numbers are more pronounced.

Take the number of new listings for sale—up 53% over 2020, yet the available homes to sell are down 35%. This is clearly due to the 122% increase in closed sales.
It’s understandable to question why then did the median home prices rise half of what they did in the overall San Mateo County stats? Simply put, Belmont started with a higher median home price, and has less elasticity in the price threshold to increase at the same rate as less expensive areas included in the San Mateo County Statistics.
What could cool this superheated housing climate? Any number of things, but higher interest rates could be the first to show on the horizon.
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.
Home Sales Slower in 2019
Last year ended with much indecision regarding the future of our local housing market, and since there are typically fewer sales at the beginning of a new year, we thought it prudent to compare the first two months of 2019 to last year at the same time to better understand the state of our current market.
On an empirical note, we’ve sold all of our listings his year at our same pace—11 days on the market, but with fewer offers. All have sold over the asking price, but not for as much as in recent years past.
MEDIAN PRICE
This is always a good indicator of what the rest of the stats might reveal because if prices are down, so too typically is everything else.
2018 Median Home Price $1,697,750
2019 Median Home Price $1,649,000
Change = $48,750 or 3% drop YOY
*NOTE: The size of homes selling in 2018 were on average 9% larger which could indicate an increase in the home prices, not a decrease year-over-year.
HOMES SALES (Units)
2018 20
2019 13
YOY Change = 7 or 54% Decrease in sales in 2019 so far
PERCENT RECEIVED OF THE ASKING PRICE
2018 114
2019 102
YOY Change = 12% Less over asking in 2019
While sales in 2019 to date are slower than 2018, homes are on the market for about the same time—14 days.
And though sellers are taking offers that as a percentage are less over their asking price than in 2018 by a whopping 11%, in real dollars they may be ahead of where we were one year ago.
With the inclement weather, buyers may have perhaps had less motivation or incentive to go out and look at homes, but virtually the same number of new listings came on the market in both years during this period, and thus sales declined so the “Months of Inventory”, or the tine it would take to sell the current inventory at the current rate of sales, has gone up dramatically from .9 months in February of 2018 to 1.3 montsh this year—though still historically very low. If more inventory (homes for sale) develop, prices could see further erosion in home values.
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.
Housing Market Free Fall?
How Can You Tell When The Housing Market Has Changed?
You look at the numbers.
Agents are a funny lot. Their perspective of the housing market around them has a lot to do with how busy they are at the moment—how many listings they have (or don’t) or how many times they’ve recently been beat in a multiple offer situation.
On broker tour day where we try and see all of the new listings in one fell swoop and we can’t help but bump in to our colleagues during tour. Actually a lot of important networking goes on during our tour, but along with the hope of discovering a “coming soon” treasure, is the hyperbole about the state of the market. It varies dramatically from agent to agent and house to house as we make our way up and down the peninsula.
When an agent’s listing lingers on the market too long they often blame it on “a slowdown in the market”, rather than try and figure out if they did something wrong or the seller overpriced their home. And of course if one of their listings recently flew off the shelf, a slowdown in the farthest thing from their mind.
And when seasonal fluctuations, which are otherwise easily predictable take hold, many agents are in a tizzy that the market has finally topped (or bottomed) out.
When we hear this wild conjecture it’s in at least my nature to go back and do some research to see what the real pulse is of the market.
So here’s how the patient was doing at the end of May 2014 for Belmont:
[DARK GREY HIGHLIGHT INDICATES OUR LISTING]
SALES
The number of homes which sold in Belmont during May of 2014 were 19—down from 32 a year ago. So what happened? Well as it turns out May of 2013 was one crazy anomaly as also seen in 2010. Homes sales in Belmont have averaged 24 sales per the month of May since 1998. But in our current market, homes sales are down because new listings are down, not because people are afraid to buy a home.
NEW LISTINGS
While the number of new listings dropped from 35 last May to 31 this year, the 16-year average is 37 new listing per month in May.
DOM [Days on Market]
This unremarkable statistic remained essentially unchanged at 11 days in May of 2013 to 12 days in 2014.
MEDIAN HOME PRICE
The Median home price in Belmont for May 2014 was $1,300,000 which bought one a median size 2,070 Sqft home. This May saw an increase over 2013 of 17% [raw numbers]. Of course the homes which sold this year were 8.6% larger so the real median home price increase was probably closer to 8.4% year-over-year. And if you use the actual square foot calculation model for adjustment that whacks it down even further to a 7.6 realized increase year-over-year. So the rate of home price increases appear to be slowing.
PRICE REDUCTIONS?
Only two sellers had to lower their price before their home sold which is exactly twice as many as last year.
PERCENT RECEIVED of ASKING
110% in 2013 to 111% in 2014. The all-time high was 115% over asking in April the month before.
Percent Received of Asking is probably the statistic most aligned with defining a hot or cold market so we track this number closely—though there’s one inherent flaw in reading too much into this and the median home price changes. Here’s why…
As prices increase fewer and fewer people have the wherewithal to purchase a home at all, let alone throw an extra $100,000 over the asking price. Couple that with the recent housing rebound out of a historic slump, and one can see that in the initial rebound years, the median price trend skyrocketed along with the percent seller’s received over asking until the home values breached new high territory. Hence we end up with statistics demonstrating the rate of appreciation slowing and the amount buyers can afford to go over asking waning. In all respects one could call that a slowdown, but being hit by a train going 50 mph rather than 100 still smarts.
How the Numbers Rolled
In May 2014 85% of the sellers received over their asking price—down from 88% last May and 14% received less than asking in 2014 as compared to 12% in 2013. None of the homes in either year sold at the seller’s asking price.
Disclaimer:
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.
The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Belmont–Week in Review November 30, 2008
Belmont’s housing market is experiencing slower than usual seasonally adjusted sales as other harder hit areas in our nine county region are experiencing large increases. This sounds worse than it is as Belmont’s home values are holding up rather well.
Listen to our Podcast to get a review of November’s housing market nuances.
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NEW LISTINGS
1309 Sunnyslope—2 Bed 1 bath 980 Sq. Ft. home on a 4,410 Sq. Ft. lot
This home won’t be toured until next Tuesday and there are no open houses listed as of yet There are some photos if you care to click on the address link. Side note—this home sold back in June of 2003 in multiple offers. It was listed at $599,000 and sold for $611,000. Listed By Charles Floyd, Help-U-Sell Floyd Realty
Belmont—3 Bed 2 Bath 1,040 Sq. Ft. home on a 6,300 Sq. Ft. lot. LISTED for $859,000 (sold back in July of 2002 for $580,000). This home has a bonus space which has been rented out for $800.00 per month. NO OPEN HOUSE LISTED. For some reason, the seller did not want the address disclosed but if you are driving around Belmont (headed towards San Mateo) you may recognize this home. Listed By Michael Vigo, Michael F. Vigo, broker.
PENDING SALES
2824 Hallmark Drive—4 Bed 3 Bath 2,400 +/- Sq. Ft. home LISTED for $1,298,900. This is of course our own listing and all contingencies have been removed. It’s now scheduled to close on December 5, 2008 and we’ll be sure and update you with the details then! Listed By Christine Morgan, Carlmont Associates
3414 Beresford Ave. 2 Bed 1 Bath 890 Sq. Ft. home LISTED for $649,000 and received an offer in 22 days. You can bet this home sold for less than the asking price—it needs a lot of work. Listed By Rosa De La Rosa, Regency Prime Properties Inc
3901 Christian Drive—3 Bed 2 Bath 1,660 Sq. Ft. home. Here’s the listing history for this home:
80841052 | 11/25/2008 | Pend Rel | 12/31/2008 | 03/31/2009 | Intero Real Estate Services (NTERO.4) | $843,000 |
80841052 | 11/05/2008 | Active | 03/31/2009 | Intero Real Estate Services (NTERO.4) | $843,000 | |
80841052 | 10/21/2008 | Active | 03/31/2009 | Intero Real Estate Services (NTERO.4) | $868,000 | |
80823845 | 09/08/2008 | Cancelled | 12/24/2008 | Out of Area Office (RCIP.1) | $899,000 | |
80823845 | 09/08/2008 | Cancelled | 12/24/2008 | Out of Area Office (RCIP.1) | $899,000 | |
80823845 | 08/11/2008 | Active | 12/24/2008 | Out of Area Office (RCIP.1) | $899,000 | |
80823845 | 08/11/2008 | Active | 12/24/2008 | Out of Area Office (RCIP.1) | $899,000 | |
80823845 | 07/24/2008 | Active | 12/24/2008 | Out of Area Office (RCIP.1) | $929,000 | |
80823845 | 07/24/2008 | Active | 12/24/2008 | Out of Area Office (RCIP.1) | $929,000 |
Wow—that was a long hard road to a sale. Listed By Ron J. Bonhagen Sr., Intero Real Estate Services
1909 Lyon—3 Bed 2.5 Bath 1,629 Sq. Ft. home. Another home with a long listing history:
80845560 | 11/25/2008 | Pend Show | 12/10/2008 | 02/01/2009 | Carlmont Associates (CARL.1) | $865,000 |
80845560 | 11/25/2008 | Pend Rel | 12/10/2008 | 02/01/2009 | Carlmont Associates (CARL.1) | $865,000 |
80845560 | 11/16/2008 | Active | 02/01/2009 | Carlmont Associates (CARL.1) | $865,000 | |
80845560 | 11/15/2008 | Active | 02/01/2009 | Carlmont Associates (CARL.1) | $869,888 | |
80843341 | 11/10/2008 | Cancelled | 03/31/2009 | Carlmont Associates (CARL.1) | $875,000 | |
80843341 | 11/03/2008 | Active | 03/31/2009 | Carlmont Associates (CARL.1) | $875,000 | |
80836808 | 11/03/2008 | Cancelled | 03/29/2009 | Carlmont Associates (CARL.1) | $889,000 | |
80836808 | 10/27/2008 | Active | 03/29/2009 | Carlmont Associates (CARL.1) | $889,000 | |
80836808 | 10/27/2008 | Active | 03/29/2009 | Carlmont Associates (CARL.1) | $879,000 | |
80836808 | 10/10/2008 | Active | 03/29/2009 | Carlmont Associates (CARL.1) | $889,000 | |
80836808 | 09/29/2008 | Active | 03/29/2009 | Carlmont Associates (CARL.1) | $912,000 | |
80830767 | 09/29/2008 | Cancelled | 02/28/2009 | Carlmont Associates (CARL.1) | $912,000 | |
80830767 | 08/29/2008 | Active | 02/28/2009 | Carlmont Associates (CARL.1) | $912,000 |
This was listed by Celeste Pagan in our Carlmont Associates office. Listed By Celeste L. Pagan, Carlmont Associates
SOLD HOMES
2812 Wakefield Drive—4 Bed 3 Bath 2,490 Sq. Ft. home LISTED for $ 1,388,831 and lowered to $1,359,531 after 12 days and finally sold for $1,360,000 within 14 days of being reduced.
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.
Information deemed reliable but not guaranteed. This is not intended to be a representation of homes listed or sold exclusively by Drew or Christine Morgan or Carlmont Associates. Download WIR 11.30.2008