Shiny Penny Tour Day for the Best Bay Area Deals 5.14.2013

You know the market is heating up when agents actually start to list homes at the insane prices some buyers have been paying. We’re not in the business of trash talking overpriced listings but suffice to say there were a lot today—both in Belmont and San Carlos.

But as you probably know we’re here after the Tuesday broker tour to bring you the Best Bay Area Deals, the “Shiny Penney”—the one home that stood out above the rest.

Where we bring you the best of tour each Tuesday.
Where we bring you the best of tour each Tuesday.

 

 

Today we broke with tradition and found two homes of interest. Both homes are well priced and each offers a unique living setting.

2217 Thurm Avenue is .  They are calling it a 3 bedroom two bath home. What makes this home unique is the setting—you feel as though you are at your own retreat. It sports open beam ceilings which makes the southwestern style motif work so well. Listed by the Gillmartin Goup.

Just Listed in Belmont-- 2217 Thurm
Just Listed in Belmont– 2217 Thurm

 

 

2217 THURM AVENUE, Belmont 94002 Status: Active MLS #: 81316043
Class: Single Family Residential Orig Price: $938,000 List: 05/10/2013
Area: Haskins Estates Etc. (361) List Price: $938,000 Original: 05/10/2013
County: SAN MATEO COUNTY Sale:
Complex: COE:
Beds: 3 Baths: 2 (2/0) Expires: 08/29/2013
Approx SqFt: 1,630 (Assessor) Off Mrkt:
Approx Lot: 7,150 Sqft (Assessor) DOM: 4
Built/Age: 1956(Assessor)/57 Green doc: No

Another home worth honorable mention is the home at 2763 San Carlos Avenue. While San Carlos Avenue can be a busy street, you don’t feel that way when you are in this home. It’s set up from the street on a small bluff and the owners have done an excellent job of orienting the living area so that you feel secluded. Then of course there’s the backyard fireplace and grill that makes for great evening outdoor entertaining. Listed by Premiere Properties.

2763 San Carlos Avenue - Just LIsted
2763 San Carlos Avenue – Just Listed

 

 

 

2763 SAN CARLOS AVENUE, San Carlos 94070 Status: Active MLS #: 81315791
Class: Single Family Residential Orig Price: $888,000 List: 05/09/2013
Area: Beverly Terrace Etc. (351) List Price: $888,000 Original: 05/09/2013
County: SAN MATEO COUNTY Sale:
Complex: COE:
Beds: 3 Baths: 2 (2/0) Expires: 12/31/2013
Approx SqFt: 1,240 (Assessor) Off Mrkt:
Approx Lot: 7,000 Sqft (Assessor) DOM: 5
Built/Age: 1954(Assessor)/59 Green doc: No

 

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. and 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.

Belmont Home Values Rise Again in April But Sales Cool Off – Housing Report for April 2013

We’ll do a quick re-cap of the Belmont housing market for April 2013, since by now unless you’ve been living under a rock you’ve heard that the Peninsula housing market is back in full swing; and some would argue the swing is becoming dangerous to ride.

We’re probably a few years away from that precipice and we seriously doubt that the current run up of home values will continue at the frenetic pace we’ve seen in the last year. If the rate of appreciation settles down to sub double digit increases year-over-year the market will be more sustainable.

If you are some place where you can hear our audio accompaniment, we’ve recorded a short piece which helps explain some of the perplexing numbers for Belmont home values in April of 2013.

That’s a long way of saying we’ll be brief in our analysis this month. We’ll start with the big news which is probably not what you’d expect to hear…

[click on the sales for a full size chart]

Belmont Home Sales April 2013

SALES

Sales year-over-year dropped 30% in the month of April. In April of 2012 24 homes traded hands while in 2013 only 17 homes closed escrow.

 

New Listings

New listings were up 40% in 2013 over 2012 for the month of April.

Current Inventory

The inventory of homes available for sale in April of 2013 dropped 27% over last year at the same time.

Months of Inventory

The time it would take to sell off the entire current inventory of homes at the current rate of sales was virtually unchanged from 1.78 months of inventory last April to 1.76 months this year.

Do some of these numbers seem paradoxical? More new listings and fewer sales—is the market cooling off? If you’d like a more detailed discussion you may visit our blog page for a short podcast where we explain the correlation these numbers have to each other.

MEDIAN PRICE

The median home price in Belmont increased around 12% to $955,000 over last April when the median price was $849,500.

Reading between the lines—we see that the size home that sold in 2012 though was also 2,070 square feet as opposed to the homes which sold this April which were only 1,520 square feet. Effectively this means in 2013 you get a home in Belmont that is 26% smaller but cost you 12% more. That’s a serious increase in prices in just one year which we discuss more in the audio portion.

PRICE REDUCTIONS

Another indication of the hot Belmont housing market is reflected in the number of price reductions—or lack thereof. There were no price reductions in April for any Belmont home which sold.

In April of 2012, out of the 24 sales 10 homes sold above the asking price, 4 sold at the asking price and 10 sold below. In 2013 all but one home sold over the asking price.

PERCENT RECEIVED

Sellers in Belmont received on average 111% of their asking price in April of 2013 as compared to 99.6% last April.

If you are a seller who has been waiting for the market to rebound, it just did.

Data from the Multiple Listing Service for San Mateo County – MLS Listings, Inc.

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. Drew & Christine did not participate in all of these sales.

Case-Shiller Posts Higher Home Prices in the Bay Area

New York, April 30, 2013 – Data through February 2013, released today by S&P Dow Jones Indices for its
S&P/ Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed average home prices increased 8.6% and 9.3% for the 10- and 20-City Composites in the 12 months ending in February 2013. The 10 and 20 City Composites rose 0.4% and 0.3% from January to February.

“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.

“Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price
increases. Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Boston and Chicago– saw the smallest year-over-year price improvements.

Housing Price Increases – Is There Any End in Sight?

Looking at the home sales in Belmont during the first quarter, one can see from this spreadsheet that every seller who listed their home received over their asking price. They were only a few exceptions. One was a home that was a short sale which we took out of the mix since those list prices are arbitrary, one was an off-market sale. We discounted any home that had been listed since last year to reflect the more robust 2013 season.

[click on the image for larger print]

Belmont Q1 2013 Home Sales

The percent that sellers are receiving over their asking price is mind boggling. It all has to do with the short supply of homes and the large numbers of buyers trying to take advantage of the historically low interest rates.

Of course that could change. Interest rates could rise making homes more expensive, or with rising prices, more “Equity Sellers” will develop as homes which were under water can now be sold for a profit. More inventory of homes means more competition for sellers as buyers will have more homes to choose from.

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.

 

Where Did All the Inventory Go? Long Time Passing…

Where did all of the listing go? Where’s the inventory?

That’s a common question today as eager home buyers are wondering if they’ll ever get a house. As we said in an earlier post, it’s not that there aren’t enough homes coming on the market, it’s that they all sell, and so it appears there are no homes to buy.

We’re getting enough questions about the hot housing market that we thought it warranted an attempt to explain what the reasons are for what Mr. Shiller (of Case-Shiller) would likely refer to as “Irrational Exuberance” after a book he authored by the same name.

Before we show you the numbers, which in some cases are absolutely mind boggling, we’ll proffer our explanation.

Our economy and the housing sector are recovering from the longest and most devastating housing downturn since the great depression. Home values plummeted for five years in a row in the end making home ownership more affordable.

As seen in this graph, home affordability peaked in 2009, yet sales were still dismal. Even with reduced home prices and record low interest rates buyers were afraid to take the plunge into home ownership.

There were still several obstacles which buyers had to overcome. Confidence in the economy and confidence in job stability. Even though home affordability peaked in 2009 potential home buyers were worried about the economy and their jobs. To compound the reluctance to move forward there was the deep rooted psychological trauma in the wake of post bubble bursting which was enough to keep most skeptics on the sideline for a few more years.

We saw things begin to change in 2011 when we were being inundated with new hires in the tech sector moving from out of state and requesting our assistance in securing a one year rental. It was the first sign that 2012 housing might pick-up—and it did.

In 2012 the “Buy Now” light switch was flipped on and buyers came out in droves to bid on the few home available. Why did so many buyers elect to more forward all at once? Because they all enjoyed the same motivating elements—America was on sale, interest rates were at historic lows, and now with companies hiring again, buyers felt comfortable in their jobs.

So in the wake of the greatest housing downturn in U.S. history, it seems plausible that might be going through a rebound equally as dramatic.

How long can this last? More “Equity Sellers” are being created every day as home prices replenish the equity lost during the downturn. More homes for sale will help the current historically low inventory levels (San Mateo County has less than two months of inventory and Belmont less than one).  But don’t expect prices to drop anytime soon. Even higher interest rates have had little affect on the prices of Peninsula homes.

Now onto the numbers...This is our post about the first quarter Belmont home sales. Here you can see how low inventory levels have created overbids averaging 114% of the seller’s asking price.

The partial title is a tribute to the endless hours my father would play the Kingston Trio’s “Where Have All the Flowers Gone” which harkens to the days of the Vietnam War resistance. If you are old enough to remember that little ditty, I’m sure it’s stuck in your head by now too…

 

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.

Are Home Prices Rising Too Fast?

Are Home Prices Rising Too Fast? [re-blog]

DAILY REAL ESTATE NEWS | MONDAY, APRIL 15, 2013Rising Home Prices

Some housing analysts are concerned that the sudden rise in home prices could make homes more unaffordable again if the price increases outpace income growth, The Wall Street Journal reports.

Average housing costs for home buyers who took out a mortgage were around 22.5 percent of average incomes, according to John Burns Real Estate Consulting. That is down from 38.5 percent in 2006, the peak of the housing bubble. The historical average is about 33 percent.

But with home prices rising in many markets and, in some, rising at a faster pace than income levels, will more people soon be priced out of the market?

Housing analysts say that, for now at least, lower mortgage rates are offsetting the higher prices of homes.

Borrowers have seen their purchasing power rise by around 33 percent over the past four years due to the low interest rates, The Wall Street Journal reports. For example, a borrower can make a $1,000 monthly mortgage payment and qualify for a $222,000 mortgage at today’s low interest rates, compared to 2008 when they’d likely qualify for $165,000 when mortgage rates were around 6.1 percent — nearly double what they are today.

Borrowers are able to withstand home-price increases because of the low rates, not because household incomes are growing, The Wall Street Journal reports. If mortgage rates tick back up to the 6 percent or 8 percent range, homes may look overpriced relative to incomes, according to housing analysts.

Source: “Why Rising Interest Rates Could Eventually Curb Price Gains,” The Wall Street Journal (April 10, 2013)

Read More

Existing Home Sales and Prices Continue to Rise
What’s Really Driving the Rise in Home Prices?

Forget Everything You Thought You Knew About Home Values

It seems there’s even more pent-up demand for housing than there was after the 1989 housing crash. The lower than usual interest rates is undoubtedly a contributing cause for the frenzied activity but what else is creating the stratospheric rise in housing activity?

It’s becoming a common event for a home to have 10-20 offers submitted by enthusiastic buyers. One first time buyer home in San Mateo recently sold with 86 offers! We’ve been in bidding wars ourselves where the winning bid paid over $300,000 more than asking price for a modest San Carlos home.
It’s probably not a leap for you to then believe that the median size home in San Mateo County climbed 29% since last March?
How’d we come up with that 29%? We adjusted it to account for the size of homes selling during the two periods. Had we not done so the raw figures showed a 34% increase.
In March of 2012 the median home in San Mateo country sold for just $689,000 and this March the median home price was $925,000. So did a lot of larger homes sell this year? For sure the upper market is starting to get traction again but the median size home selling in 2013 was only 5% larger. So we roughly estimate that if one can get a 5% large home in 2013 but have to pay 34% more, than prices probably went up by a factor of around 29%.
Looking at the housing picture for San Mateo County for March of 2013 as compare to March of 2012, we see that there were 20% fewer home sales this year as compared to last.
Why the fewer home sales if the market is so hot? Because, simply put, there are fewer homes for buyers to choose from. In 2013 there were 20 percent fewer sales but 29 % fewer new listings-which explains the low inventory.
For buyers wanting to get into a home, it may be now or never as home prices appear to have skyrocketed almost 30% in San Mateo County just in the last year. If interest rates rise, that double whammy may just put home ownership out of the reach for many.

 

 

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 Prices & Sales for March 2013 – Can it Get Any Hotter?

Once again Belmont home sales were strong. Now that we are comparing a bull year in 2013  to 2012, another bull year, the increases seem a bit watered down since in both years thus far home sales have been strong.

Belmont Home Prices March 2013

SALES

At 22 home sales in Belmont this March, we tied last year’s impressive increase of 29% over 2011 with 22 sales once again.

DAYS ON MARKET

The time it took to sell a home in Belmont went from 38 days last March to only 29 this year—just one more affirmation of the incredibly hot market.

PERCENT RECEIVED

Sellers enjoyed another boost in the percent of their asking price they received. In March of 2011 sellers received 99.5% of asking which jumped to 101.6% in 2012 before being eclipsed by this year’s impressive 108.3%. Sellers that are worried about what they pay their agent should think less about negotiating a ½ % discount in commission and more about hiring the best agent with the best results. My parents called that “Penny wise and pound foolish”.

PRICE REDUCTIONS

Two sellers had to lower their initial asking price to entice a buyer as compared to last year when three sellers lowered their asking price. Once again, compared to 2011 when almost 1/3rd of seller reduced their asking price, this is another high water mark.

MEDIAN PRICE

The median home price in Belmont last March was $899,000 and for the second month in a row it has eclipsed the $1 million dollar mark coming in at $1,044,000 for March—though the median size home also went up from 1,763 square feet in 2012 to 1,830 in 2013. So while the size of homes selling this year are 3.8% larger, they are selling for 16% more—suggesting an overall increase of around 12% year over year. Sounds about right for what we are seeing.

MONTHS OF INVENTORY

This statistic is used represent the “Month’s of Inventory” in a given period. Essentially the time it would take to sell the entire existing inventory of homes at the current rate of monthly sales. In Belmont, that number has been dwindling each month until it reached .6 (less 18 days of inventory). That number alone might not have much meaning unless you understand that the housing inventory as whole in the US stands at 18 months—not 18 days.

Is it because there are more sales, or a declining inventory due to fewer new listings—or both?

With buyers and agents complaining about the lack of inventory, and with the lack of inventory playing a large role in the multiple offers we’re seeing, we decided we’d add a new graph to our statistics page that tracks the number of new listings and sales each month in select cities.

 

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.

DRE License Numbers 01124318 & 01174047

Drew & Christine Morgan, REALTORS | Notary Public