Housing May Be Approaching Equilibrium

A lot transpires at the end of the year. There are resolutions for the new year, and reflection upon the year just passed. There’s wrapping up the holiday decorations and reflecting upon the celebratory memories.

And then there’s wrapping up the year-end business for us. Surveying what happened in our local housing market and taking a stab at the “Why”?

We posted an article for our blog in December which we authored and was originally printed in the Examiner. It was aptly titled, “Shifting Market in Play”. In it, we discussed the subtle but noticeable shift in our housing market towards a market approaching equilibrium—that being a market wherein the demand is nearing the supply. That’s a good thing, as a more normal market is a more sustainable market.

It’s not simply that demand for housing is waning, but rather demand at the newly established price point is down. In other words, fewer people can afford the median price home which has had a dampening effect on home sales.

Affordability is affected by three major factors: median house price, mortgage interest rates, and household income. Mortgage rates are still below historical averages, and household income is on the rise. So, what is keeping housing affordability down are home prices—which are ironically artificially inflated due to the first two factors, low interest rates and high income.

Comparing the year-end numbers for Belmont, we see that listings were up but sales were down. The time it took to sell a home was higher, but the price the sellers received and the percent of the seller’s asking price were lower.

2016-2017 YOY Data

 

 

The median price appears to have taken a hit too, but upon further examination, one can see that while the median price was down 1.5%, the median size home that sold last year was down even more, at 3.4%.

When the housing market dropped in 2007, home values bounced along at the bottom for several years before climbing again. This is typically true at the peak as well. Are we there? We could be. Data from Q1 & Q2 will give us a more clear picture.

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. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

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

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

 

Shifting Market in Play

NOTE: Shifting Market in Play is an article we did for the Examiner in December, when asked to comment on 2016—A Year in Review: This is a link to the original article.

In order to understand our current housing market, one must appreciate that markets are constantly in flux. In our town of Belmont, we looked at home sales and compared the periods from January thru November for years 2015 and 2016.

Let’s first discuss the market conditions. There’s a lot of hyperbole as to the state of our current housing market. Sellers are still in the mindset that they hold all of the cards, yet buyers are beginning to push back on prices. Sellers are receiving fewer offers, many have had to lower their asking prices, and homes are often times closing below the asking price—something that rarely happened from 2012-2015. This suggests a shifting market.

Clearly, the sky is not falling, the shift is towards a more normal market, where homes sit on the market longer, and may sell above, at, or below the seller’s asking price. This long awaited market shift is not a correction, but rather a predictable and healthy move towards a more balanced and sustainable market. To be blunt, prices have risen to a level at which the majority of buyers can no longer afford the median priced home, resulting in a cooling down effect on the housing market.

We first examined all of the home sales in Belmont that occurred in 2015 through November in order to compare those with the same period of home sales in 2016. We added no search filter other than the date range, since the larger the pool of sales, the more reliable the data.

2015 2016 % ∆
Sales 178 181 1.7%
Median Home Price $1,516,500 $1,389,000 -8.4%
Home ft² 1850 1760 -4.9%
$/ft² 830 856 3.1%
DOM (Days on market) 12 11 -8.3%
% Received 114.5 107.2 -6.4%
Price Reductions 9 19 111.1%
For How Much $120,638 $118,477 -1.8%
Sold Over Asking 156 149 -4.5%
Sold At Asking 6 10 66.7%
Sold Under Asking 16 22 37.5%

 

It’s clear that a market shift has occurred. Note that the median home price reflects a significant decrease year over year (YOY), and part of that is simply because smaller homes sold in 2016 skewing the numbers. But in almost every category there’s a distinct shift towards a more normal market. There were fewer homes selling for more than the asking price and the ones that did sell over asking sold for 33% less over asking than in 2015. There were more cancelled listings, and more price reductions for greater amounts. The inventory of homes for sale is growing—up from 0.3 to 0.7 months of inventory (still considered seller’s territory).

On a more macro-level, when we look at the San Francisco Metropolitan Statistical Area (SFMSA) as produced by Case-Shiller for Standard and Poor’s, which encompasses the counties of Marin, Alameda, Contra Costa, San Francisco and San Mateo, one can see that while the YOY increase in their index was a rise of almost 15%, there was only a nominal 0.5% increase in home values since April.

How long will the new normal market continue? We’ll save that wild card question for other talking heads. Nobody really knows of course, and anybody that professes to know should give you cause for concern. However, the market appears to have hit a price threshold. As fewer buyers can qualify for the median priced home, more sellers will be getting less windfall profits like they did during the meteoric rise over the last three years.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA with RE/MAX Star Propeties. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

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

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

The Eleventh Hour on the Eleventh Day of the Eleventh Month—Where Will You Be?

The Eleventh Hour on the Eleventh Day of the Eleventh Month—Where Will You Be?

Veterans Day originated as “Armistice Day” on Nov. 11, 1919, the first anniversary of the end of World War I. Armistice is an agreement made by opposing sides in a war to stop fighting for a certain time— a truce.

Congress passed a resolution in 1926 for an annual observance, and Nov. 11 became a national holiday beginning in 1938.Veterans Day

Veterans Day is not to be confused with Memorial Day–a common misunderstanding, according to the U.S. Department of Veterans Affairs. Memorial Day (the fourth Monday in May) honors American service members who died in service to their country or as a result of injuries incurred during battle, while Veterans Day pays tribute to all American veterans–living or dead–but especially gives thanks to living veterans who served their country honorably during war or peacetime.

  • In 1954, President Eisenhower officially changed the name of the holiday from Armistice Day to Veterans Day.
  • In 1968, the Uniform Holidays Bill was passed by Congress, which moved the celebration of Veterans Day to the fourth Monday in October. The law went into effect in 1971, but in 1975 President Ford returned Veterans Day to November 11, due to the important historical significance of the date.
  • Britain, France, Australia and Canada also commemorate the veterans of World Wars I and II on or near November 11th: Canada has Remembrance Day, while Britain has Remembrance Sunday (the second Sunday of November). In Europe, Britain and the Commonwealth countries it is common to observe two minutes of silence at the eleventh hour on the eleventh day of the eleventh month.

_____________________________________________________________________________________

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

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

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

 

 

Local Housing Market Shows Signs of Change

BELMONT (AND BAY AREA) MARKET SHIFT

In order to know what changed in our housing market, one must understand that markets are constantly in flux, it’s just hard to see when you are in the middle of one—sort of like being in the eye of a hurricane. We looked at home sales in Belmont and compared the periods from January to September for 2015 and 2016. We’re always asked what’s going on in our market and we like to be armed with facts.

Most people want to know if the housing market is in the seller’s or buyer’s favor-if prices are going up, steady, or dropping. Buyers want to know as they are trying to decide if they should wait and see what happens with the market, or just move forward with life’s plans.

Anecdotally, many agents will tell you their opinion based upon their personal observations. If they had a hard time selling their last home they might tell you the market is “changing” and if their last listing flew off the shelf they might proclaim the housing market to be as robust as ever. But whatever people feel, the numbers don’t lie. They are an unemotional representation of what is occurring in a given market.

Let’s first discuss the market conditions. There’s a lot of hyperbole as to the state of our current housing market. Sellers are still in the mindset that they hold all of the cards, yet buyers are beginning to push back on prices. Sellers are receiving fewer offers, many have had to lower their asking prices, and homes are often times closing below the asking price—something that rarely happened from 2012-2015. This would suggest a shifting market.

Clearly, the sky is not falling, the shift is towards a more normal market, where homes sit on the market longer, and may sell above, at, or below the seller’s asking price. This long awaited market shift is not a correction, but rather a predictable and healthy move towards a more balanced and sustainable market. To be blunt, prices have risen to a level that the majority of buyers can no longer afford.

We first examined all of the home sales in Belmont that occurred in 2015 through August 31st in order to compare with the same period in 2016. We added no search filter other than the date range, since the larger the pool of sales, the more reliable the data.

Here are the data:belmont-analysuis-for-10-2016

We added an arrow to represent if the numbers went up or down as compared to 2015, and then rated with a “Thumb’s Up” icon for those parameters that showed little change or improved a bit over 2015.

Note that while the raw median home price dropped in 2016, you can see at the very bottom of this inset that we made an adjustment, since smaller homes sold in 2016 of the two periods we examined. So for example, although the size of homes which sold were 4.8% smaller in 2016, they only sold for 1.2% less. Could that be interpreted that the median price actually rose 3.6%? Our numerical calculation based upon price per square foot comes up with 1.5%. In either case, it’s a modest increase year over year at best.

On a macro-level, when we look at the San Francisco Metropolitan Statistical Area (SFMSA) as produced by Case-Shiller for Standard and Poor’s, which encompasses the counties of Marin, Alameda, Contra Costa, San Francisco and San Mateo, one can see that there was a nominal 1% increase in home values between May and June alone. This lends more credence to our theory that home values are initially topping out in higher priced areas like the Mid- Peninsula.

It’s clear that a market shift has occurred. While the median home price reflects a marginal change year over year (YOY), in almost every category there’s a distinct shift towards a more normal market. There were fewer homes selling for more than the asking price and the ones that did sell over asking sold for 30% less than in 2015. There were more cancelled listings, and more price reductions for greater amounts. The inventory of homes for sale is growing—up from 0.3 to 0.7 months of inventory (still considered seller’s territory).

The month’s supply of inventory is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5-month supply of homes for sale. The months of supply are a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 3 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers.

Belmont still has less than one month of housing inventory but Foster City, also on the Mid-Peninsula, is currently running a housing inventory level of 3 months. What this means is that the market shift will no doubt continue until there’s a full blown correction. We could be years away from that happening, but we appear to be moving in that direction and we’re also moving into the slowest part of the season (winter), when seller’s typically net the least for their homes. In addition, if interest rates rise—and they should since they are at historic lows—that too will have a damping effect on home values in the near future.

How long will the new normal market continue? We’ll save that wild card question for other talking heads. Nobody really knows of course, and anybody that professes to know should scare you. However, the market appears to have hit a price threshold. As fewer and fewer buyers can qualify for the median priced home, more sellers will be getting less windfall profits like they did during the meteoric rise over the last three years.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.

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.

Days on the Market—What’s in a Statistic…

How long it takes when selling one’s home to get into contract is one of the most nerve racking periods during the home sale process—for sellers, but how long should it take to sell a home?gambling

Don’t gamble on the outcome. Our study shows that selling a home too fast or having it take too long can be detrimental. Not every case is the same, and not every market has the same perception, but on the Bay Area, specifically the mid-peninsula, statistically, there’s a sweet spot for selling a home quickly, and getting the most money at the same time.

One must understand how potential buyers view this statistic in order to evaluate why there’s a correlation.

When a home is being sold “off-market”, or off the MLS, buyers can have a difficult time ascertaining the intrinsic value. If a seller is asking “X”, potential buyers might think it’s worth the asking price—perhaps more, or less, who knows?

When that same homes goes “Live” to the entire community of house hunters and REALTORS®, if no offers materialize within the first 10 days—or on offer day—it’s a safe bet that the home is overpriced for the value offered, and will more likely than not eventually, sell for less—and savvy buyers know this.

If hordes of buyers line up right away to make offers, buyers looking on will feel confident that the home is priced well—or even too low. Conversely, if the home languishes on the market more than 14 days, and there’s scant interest, it’s a pretty good indication to buyers that the home may be priced too high—or worse that there’s something wrong with the home. In either of the latter cases, buyers will often sit back and wait to see what happens. They typically wonder when, and or if, the seller will lower the asking price.

This is when the tables shift and buyers are empowered to make offers at or below the seller’s asking price.

As a seller the last thing you want to do is overprice your home. Trying to alter a general opinion that there may be something wrong with your home puts a seller in a quandary, if not a perilous position.

Sellers can’t advertise that there’s “nothing wrong with their home”, since certainly every home has some inherent flaw. What they’d like to advertise is, “There’s no reason you shouldn’t be buying my home—it’s just as good as all of the others”. Except that, it’s probably overpriced.

What other factors can cause the days a home is on the market to creep up? In addition to the number one factor of overpricing a home, there’s accessibility and presentation.

Making your home hard to show can be hugely detrimental to getting the most buyers in to see your home. Making it “appointment only” or having it shown through your “agent only” will invariably limit the number of potential visits to your home.

When Real Estate agents set up a day to show their buyers homes, they know everyone’s time is limited. It does no good for them to show buyers so many homes that their buyers become overwhelmed, so agents will limit the showings to as many as they can comfortably fit in. If your home is hard to get into, they might save it for another day—or they might skip it altogether. Often a buyer will find a suitable home on their first outing.

Buyers are busy people. Often they are juggling jobs with long hours, pets and/or small children as they traipse around trying to find a suitable home. Having an open house where they can leisurely stop by on a weekend afternoon will benefit the accessibility of your home and increase the showings. Think how many mid-week dinner time appointments can be deferred by inviting buyers to a weekend open house.

Is one weekend enough? Many times it can be, but then you could be missing out on that one high bidder who was out of town on a business trip, or heavenly forbid, a weekend getaway from the stress of house hunting.  Imagine how frustrating it is for buyers who finally take a break for a one-week vacation only to learn that there dream home sold before they could return. And if you’re a seller, imagine potentially leaving that much money on the table.

Lastly, but certainly not least, is a home’s presentation. Not all sellers nor their agents present homes the same way. Some sellers despite their agents’ vehement admonitions will still cook a fried fish diner right before a critical showing. Real estate agents can also sabotage a seller’s likelihood of a sale by not realizing the importance of market saturation advertising—tapping onto the full potential of the internet with international and social marketing which includes the latest 3D virtual tours, video and of course Facebook and Twitter portals.

Our Next Post…Photographing Your Home—It’s Not Child’s Play. The photography of your homes is best left to professional. Too often we see homes presented with pictures taken from a cell phone.

_____________________________________________________________________________________

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

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

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

 

 

 

 

Know What Changed our Housing Market

In order to know what changed our housing market, one must understand that markets are constantly in flux, it’s just hard to see when you are in the middle of one.

We took a look at homes in Foster City for a client recently. The premise was they wanted to know if the housing market was in the seller’s favor, or in the buyer’s favor–if prices were going up, steady, or dropping.

Anecdotally many agents will tell you their opinion based upon their personal observations. If they had a hard time selling their last home they might tell you the market is “changing” and if their last listing flew off of the shelf, they might believe the housing market is as robust as ever. But whatever people feel, the numbers don’t lie. Numbers are an unemotional representation of what is occurring in a given market.

Let’s first discuss the market conditions. There’s a lot of hyperbole as to the state of our current housing market. Sellers are still in the mindset that they hold all of the cards, yet buyers are beginning to push back on prices. Sellers are receiving fewer offers, many homes are having to lower their asking price, and homes are selling often times below the asking price—something that rarely happened in 2012- 2015. This lends itself to a shifting market.

Shift

Clearly the sky is not falling, the shift is towards a more normal market, where homes sit on the market longer, and may or may not sell at the seller’s asking price. This long awaited market shift is not a correction, but rather a predictable and healthy move towards a more balanced and sustainable market. To be blunt, prices have risen to a level that the majority of buyers can no longer afford.

We first examined all of the sales in Foster City which occurred in 2015 through August 31st in order to compare 2015 home sales within the same seasonal periods to 2016. We added no search filter other than the date range, since the larger the pool of sales more reliable the data.

This is the data:

FC Market Conditions

It’s clear that a market shift has occurred. While the median home price had a marginal increase of 3% YOY, in every category there’s a distinct shift towards a more normal market. There are more homes selling, for less over the asking price, and taking longer to do so. There are more cancelled listings, more price reductions, and for a greater amount. The inventory of homes for sale is growing—up from .83 months of inventory to three months this year.

The month’s supply of inventory is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5 month supply of homes for sale.

The months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 3 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers. Foster City is currently running a housing inventory level of 3 months.

What this means is that the market shift will no doubt continue until there’s a full blown correction. We could be years away from that happening, but we are moving into the slowest part of the season where seller’s typically net the least for their homes. And if interest rates rise—and they should since they’re at historic lows, that too will have a damping effect on home values in the foreseeable future.

How long will the new normal market continue? We’ll save that wild card prediction for other talking heads. Nobody really knows of course, and anybody that professes they know should scare you. But the market appears to have hit a price threshold. As fewer and fewer buyers can qualify for the median price home, fewer sellers will be getting windfall profits like they did during the meteoric rise over the last three years.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.

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

 

 

 

Belmont Home Sales Suffer From A Stall

Belmont home sales this June suffered from the stall we predicted in this post back in May.

Comparing Belmont July of 2015 sales statistics to July of this year, they might look rather benign, but when you look a little deeper, you can see indications of what could be a slowing trend.

There were only two more listing this year than last, and even with seven more home sales in 2016 the inventory of unsold homes doubled. So did the months of inventory–rising from a minuscule .3 of a month to a mere .7—(still a ridiculously low number considering the U.S. housing inventory level hovers around six months). [CLICK THE IMAGE TO ENLARGE]

YOY June 2015-2016

While the $129,000 median drop in home prices might seem shocking at first glance, it’s mitigated to some degree since smaller homes sold this year. In fact, if we factor in the difference in the size of the homes in the two periods we come up with an almost identical median price year-over-year of $1,633,000.

We also see the price per square foot dropping from $906 to $824—and larger homes sold last year. Why is that important? Because larger homes statistically sell for less per square foot, since the land upon which they sit is not in the equation, yet can account for 50% or more of a home’s value.

And there’s the smoking gun—home prices did not go up in Belmont this June as compared to last. Not only that, but sellers received only 106% of their asking price compared to 119% in June of 2015. [CLICK THE IMAGE TO ENLARGE]

BELMONT jUNE 2016

Is it the unknown of Brexit? That served only to help lower mortgage payments—in theory giving buyers more buying power. It is an election year? This one is tumultuous. Whenever there’s an unknown in the air buyers tend to pull back, sit on the fence and wait it out—it’s human nature.

It could also simply be that we’ve hit a price threshold that the average buyer can no longer afford, or any combination of the above (or more). In any case, it was bound to happen at some point. The question is, have we hit that point?

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. 

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.

Drew & Christine Morgan did not necessarily participate in these sales

 

 

 

 

 

Homeowner’s Face Mandatory Upgrades

Homeowner’s face mandatory upgrades as the state legislature has determined that it’s time for us all to remodel our bathrooms. Well, not just bathrooms, actually any part of your home that contains older plumbing fixtures. Now there’s no excuse to put off that bathroom upgrade you so desperately needed. Of course, everybody knows that changing a plumbing fixture will open Pandora’s box, and of we’ll all then need fancy new bathroom vanities and glass tiled backsplashes to accentuate our new low flow faucet.Water Conservation

In the end this is good for our water conservation efforts, as well as stimulating our economy with hundreds and thousands of remodel projects about to get on the books. How long before you have to take on a multitude of remodel projects? Less than six months it turns out.

Though this new ordinance does not rise to the level of a point of sale requirement, it is a disclosure requirement at the point of sale. It also encourages cities and counties to adopt more stringent rules than the statewide mandated “disclosure only”, so don’t be surprised if a town near you rises this to the level of a new point of sale ordinance, assuring every home for sale would then be outfitted with the latest trendy look.

Below is the text we excerpted from the Civil Code, for your convenience.

 (a) On and after January 1, 2014, for all building alterations or improvements to single-family residential real property, as a condition for issuance of a certificate of final completion and occupancy or final permit approval by the local building department, the permit applicant shall replace all noncompliant plumbing fixtures with water-conserving plumbing fixtures.

****(b) On or before January 1, 2017, noncompliant plumbing fixtures in any single-family residential real property shall be replaced by the property owner with water-conserving plumbing fixtures.

****(c) On and after January 1, 2017, a seller or transferor of single-family residential real property shall disclose in writing to the prospective purchaser or transferee the requirements of subdivision (b) and whether the real property includes any noncompliant plumbing fixtures.

(Added by Stats. 2009, Ch. 587, Sec. 1. Effective January 1, 2010.)

 

Disclaimer:

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.

Making Heads or Tails of The Housing Market

Making Heads or Tails of The Housing MarketCoin Toss

Whenever the real estate market has been heading in an upward or downward direction for an extended period of time, people naturally begin to question when the current trajectory will end—and we are not immune to that natural tendency.

We live in Belmont and our real estate office is in Belmont but we also look to national and macro indicators as well, since the Bay Area really is its own microcosm of tech and real estate activity and what happens in the Bay Area tends to stay in the Bay Area.

Trying to make heads or tails of our local market is much harder since the number of sales (data points) are so few they are easily distorted by one or two outlier sales—a bidder who “had to have the home” and paid way too much, or a seller that sold off market for far too little.

The Macro Level

We post Standard & Poor’s Case-Shiller analysis each month to our web site. Even though the data has a three month lag time, its relative information and year-over-year data points are telling.

This is a graph of the MSA for our area—referred to as the San Francisco MSA (Metropolitan Statistical Area) but it’s composed of counties, Alameda, Contract Costa, Marin, San Francisco and San Mateo. Note that we’ve recently experienced a blip on the radar of declining index values for two months in a row.  Is it a trend? It could be. We’ll know more over the next two month’s reporting periods. Since the beginning of the recovery in February of 2012, there have only been two other instances when the index declined, only to bounce right back up—but only one  cycle of decline during this period ever lasted more than three consecutive months . What is disconcerting is that four of the five index declines have occurred in the last two years.SFMSA 2015-2016

With that in mind, we turn to Belmont home sales for March 2016.

Stats March 2016

The chart depicts Belmont real estate activity for the month of March in 2015 as compared to March 2016.

SALES

Sales of existing single family homes waere down 70 percent YOY, which might seem frightening except that inventory levels—the homes available to sell were down 60%.

MEDIAN HOME PRICE

We believe this actually dropped, here’s why. Technically, the median home price was up 6.3% YOY but that bought a Belmont home which was over 30% larger than in 2015. The 539 square feet difference at the going rate of $643 per square foot equals a disparity of almost $350,000. If you were to subtract that from the 2016 median home price, we get an adjusted media home price of $1,175,000—or an 18% drop in the median home price YOY.

PERCENT RECEIVED

This also dropped from 120% of asking in 2015 to 104.5% in 2016—a 13% drop. Now 120% in March of last year was an anomaly, but still on either side of March in 2015 it was 107% and 117%.

Belmont home values have reached a point where fewer and fewer people qualify for the median home price. That puts a damper on the rate of appreciation, so we expect that this year we will see more volatility in the numbers, and continue to put these numbers into perspective as best we can.

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.

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.

Free Solar Panels May not be Such a Bright Idea

Solar power leases may have pitfalls. We’re seeing more and more solar panel popping up on home these days and with them come issue when trying to resell one’s home. Studies have suggested that the addition of solar panels on a home can boost a home’s value. But sometimes those solar panels can sabotage a deal when it comes time to sell.Solar Power Savings

Selling Green Homes

Making the Case for Energy-Efficient Homes

Energy-Efficient Mortgages Gain Popularity

More Builders Find the Sun Is a Selling Point

Do Green Homes Fetch Higher Sales Prices?

More companies are offering home owners a contract to lease solar panels where they pay no upfront costs for the installation and could start saving on their electricity bills right away. But some home owners who sign onto these deals are finding some snags when they go to sell.

Many potential buyers are leery of taking on the leasing payment contracts for the next 15 to 17 years because they often have to qualify on credit from the solar companies themselves, in addition to the mortgage. Also, some buyers are hesitant to sign a contract because they’re concerned the solar equipment will become obsolete or won’t amount to a big savings in the end after paying the leasing fee.

We asked Solar city over to our home in Belmont for an estimate. Of course the carrot is free installation, but the savings is minimal. Since they are leasing you the equipment, they take an override on the energy their panels on your roof produce–and they sell that energy to you at a reduced rate–but it’s not anywhere close to free, as if you owned the equipment.

But we’re seeing issues trying to re-sell home with leased solar panels. Some home buyers are refusing to buy the house unless the seller buys out of the remaining lease payment stream — which could be $15,000 or more. If you’re going to eventually buy-out the contract anyway, it’s a far better idea to but it up front and enjoy 100% of the energy dollar savings.

In Fresno, Calif., a couple trying to sell their house told The Los Angeles Times that it attracted multiple offers but two sets of buyers backed out of the contracts due to the leased solar panels on their roof. The buyers felt the long-term cost of the lease agreement was too high or they were concerned about the credit qualifications they had to meet in order to take over the lease. Ultimately, the couple selling the home had to pay $22,000 to break the lease with the solar company so that they could sell the house.

With the rising popularity of solar, we already have seen several disputes arise over solar panel leases, and we expect the problem will get nothing but more frequent.

Residential solar installations are rising dramatically — up by 50 percent per year since 2012, according to the Solar Energy Industries Association.

Before you sign on the dotted line for a solar lease, check with your accountant for tax consequences if you purchase the system, you might qualify for a tax incentive write-off. A simple home equity line of credit may be all you need to qualify to own 100% of the power your home generates.

Source: “Leased Solar Panels Can Complicate – or Kill – a Home Sale,” The Los Angeles Times (March 22, 2015)