San Mateo County Housing Market: Rising Demand, Shrinking Supply, and Hidden Value Gains

San Mateo County Housing Market Snapshot: A Mixed Bag of Growth and Decline

The Q3 2024 housing market in San Mateo County reveals notable shifts compared to the same quarter in 2023. While total sales volume and median sale prices increased, other key indicators suggest tightening market dynamics.

Sales Surge Amid Reduced Inventory: The number of homes sold increased by 7.7%, rising from 902 to 977, likely due to strong demand despite the dropping number of new listings. This is reflected in the lower inventory levels—the inventory of homes that haven’t sold by the end of a month.

Pricing Trends Show Hidden Results: 

Median sale prices grew by 4.5%, reaching $1,908,700. At the same time, the cost per square foot climbed 5.2% to $1,149.

Smaller Lots, Bigger Gains

In Q3 2024, lot sizes shrank 24.7% (15,606 to 12,514 sq. ft.), and home sizes dropped 4.7% (to 2,012 sq. ft.). These shifts skew the reported appreciation, as smaller homes on smaller lots sold for 5.2% more. Adjusting for size differences and price per square foot ($60.00), the true median price appreciation is closer to 15.1% year-over-year.

Price Per Square Foot Climbs Nearly 9% The average price per square foot rose sharply, jumping 8.8% from $865 to $949. This uptick underscores rising property values and increased buyer competition. Higher demand, coupled with limited supply, is driving prices higher on a per-square-foot basis, a clear sign of a strengthening market. If inventory constraints remain, expect this trend to persist.

Faster Sales, Fewer Days on Market: Homes sold quicker in 2024, with the average days on market (DOM) dropping from 24 to 23 days, a minuscule 4.3% improvement. This indicates continued competition for available homes.

Strong Pricing Power: Sellers continued to receive more than asking prices, with the percentage of list price received improving to 105%, up 1%.

Total Sales Volume Climbs: The market saw a 5.9% increase in sales volume, reaching $2.35 billion, signaling robust overall growth.

Tighter Months of Inventory: The months of inventory dropped to 1.6, reflecting a 12.5% tightening, signaling a shift toward a stronger seller’s market.

In summary, Q3 2024 shows an increasingly competitive market with rising demand and constrained supply. While buyers face higher prices and smaller lots, sellers benefit from faster sales and strong pricing power. If inventory remains low, expect continued price pressures.

Drew and Christine Morgan are experienced REALTORS and NOTARY PUBLIC located in Belmont, CA, where they own and operate MORGANHOMES, Inc. They have assisted buyers and sellers in their community for over 30 years. Drew and Christine have received the coveted Diamond award and ranked among the top 50 agents nationwide and the top 3 in Northern California by RE/MAX. To contact them, please call (650) 508.1441 or email info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook and on Twitter.

This article provides educational information and is intended for informational purposes only. It should not be considered real estate, tax, insurance, or legal advice, and it cannot replace advice tailored to your specific situation. It’s always best to seek guidance from a professional who is familiar with your scenario.

BROKER | OWNER | NOTARY

The Evolution of REALTOR Compensation: Understanding Changes in Buyer’s Agent Remuneration

A trend is emerging wherein sellers opt to exclusively remunerate their own agent, leaving the buyer’s agent compensation subject to negotiation by buyers.

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San Mateo County Rising Home Prices, Plummeting Transactions, and the Impact on Belmont

Despite homes being above water and values steadily increasing on the Peninsula, the overall market is not in top shape, as the number of transactions is at an all-time low.

                          Overview:

  • Home values are consistently rising on the Peninsula.
    • However, the number of home transactions is currently at an all-time low.

Recent Data (Q3 2023):

  • In San Mateo County, new listings are down 6.7% compared to a year ago.
    • Compared to a more typical year, 2018, new listings are down significantly by 18.3%.
    • When compared to the Great Recession in 2008, new listings have plummeted by almost 60%.

Sales Trends:

  • Sales have decreased by 15% from last year, 20% from 2018, and 26% from 2008.

Home Prices:

  • Despite (or because of) the decrease in available homes, home prices are rising.
    • Following the basic economic principle of supply and demand, the limited supply is driving up prices.
    • In San Mateo County, home values have increased by 1% since last year, 13% since 2018, and an impressive 46% since 2008.

Local Impact in Belmont:

  • In Belmont, the impact of higher interest rates is more pronounced.
    • New listings are down by 4.5% from last year’s Q3, but significantly lower by 70% since 2018 and 80% since 2008.

In essence, while home prices are rising due to limited supply, the number of available homes for sale and overall transactions has significantly declined, especially when compared to previous years.

Drew and Christine Morgan are experienced REALTORS and NOTARY PUBLIC located in Belmont, CA. They have been assisting buyers and sellers in their community for over 30 years. Drew and Christine have received the coveted Diamond award and ranked among the top 50 agents nationwide and top 3 in Northern California by RE/MAX. To contact them, please call (650) 508.1441 or email info@morganhomes.com.

or all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook and on Twitter.

This article provides educational information and is intended for informational purposes only. It should not be considered as real estate, tax, insurance, or legal advice, and it cannot replace advice tailored to your specific situation. It’s always best to seek guidance from a professional who is familiar with your scenario.

BROKER | MANAGER | NOTARY

Unveiling the Thrilling Odyssey of Bay Area Housing Values: A Tale of Peaks, Plummets, and Uncertain Horizons

Our market peaked in May of 2022, began a slow slide until it hit bottom of that year in November, before regaining its traction and the slow pace of recovery.

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HOUSING MARKET DIPS REMAIN IN THE MIX AS NEW LISTINGS CONTINUE TO DROP

Though the landscape may appear bleak to some, to others, doors have opened to greener pastures offering new market opportunities.

We guessed correctly that around this time, home prices would start to look more like they did a year ago than two years ago.

Looking in the rear-view mirror, home prices hit their all-time high in April of 2022 before beginning what would be a reverse of fortune for sellers over the next year.

WHERE ARE WE NOW

Most indicators remain down over last year, but not so much in the price decrease department. What has taken a hit is the inevitable drop in sellers choosing to move for fear of losing their low fixed mortgage rate.

Take Belmont, for example. The number of new listings dropped 27% YOY as compared to June 2022. 

The Inventory—or the number of homes left for sale at the end of the month dropped 56%, a strong indicator that there is still strong demand for homes.

One more home sold this month than last year, which is statistically insignificant, but it underscores that our meager inventory is moving.

The days a home is on the market is back to a more normal 12, up from eight when the bidding frenzy in Q1 of 2022 was at its peak.

The percent a seller receives of the asking price is around 105%—down from 107% a year ago, but still indicating overbidding on select homes.

The Belmont median home price is down 12.3% YOY, as some air escapes from the brief bubble in 2022.

San Mateo County fared about the same:

News listings declined 27%

Inventory dropped 30%

Sales were down 8%

The median home price came down 5%

And the time it took to sell a home increased by 50%

We still have less than one month of housing inventory in Belmont and 1.4 months in San Mateo County, which is lower than the rest of the country by about five months.

Currently, half of the homes being sold are fetching prices above the seller’s asking price, indicating the presence of multiple bids, while the other half are selling for less. Sellers are still receiving lower prices than they could have obtained a year ago during the brief bubble. However, given the rapid 14% price increase in the first three months of 2022, it is evident that there was considerable room for a market correction.

With prices rising by 14% in the first quarter of 2022, it was anticipated that a portion of the price surge would not be sustainable.

TAKE AWAY

Interest rates have increased again recently and will probably stay at these levels for the remainder of the year. That’s not helping buyers or sellers. Buyers can afford less home, or less expensive homes, and sellers don’t want to move, which puts more pressure on holding home prices at bay.

Since the local housing market heavily relies on the interplay of supply and demand, if interest rates remain high and an increase number of sellers feel compelled to sell, the growing inventory of homes for sale will intensify the pace of home price decreases.

We understand how difficult it is to try and time one’s life around the housing market—whether to move now or later and what would be optimal. Two things will impact the housing next year that we can anticipate. With the Presidential Election, we expect a repeat of diminished housing market activity as we near summer. And mortgage interest rates are expected to come down. This may entice more sellers into the market, diluting the pool of possible buyers for homes. If you are considering a move, be sure to contact us soon so that we may advise you early on as to the best time next year to sell.

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 30 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.

Drew Morgan, Broker Associate 01124318 | Christine Morgan, Sales Associate 01174047

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook and on Twitter.

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 Prices Expected to Jump

In the summer of 2007 our preferred lender Steve Herbert from the now defunct Washington Mutual called for an emergency meeting in our Belmont office. His agenda, the sky was about to fall on the lending industry. Of course what followed was the collapse of dozens of financial institutions and decline in the housing industry not seen since the great depression.

Lending standards were tightened during this three year downturn and money was lent to only AAA clients. Credit was hard to come by and loans such as stated income for self-employed people were nowhere to be had.

Fast forward seven years and in our meeting today, Steve Herbert stood in front of our group of three offices and announced that the lending standards have been significantly reduced.

Fisher Investments foretold this turnaround over a month ago in our meeting in Woodside with their Financial Investment Group.

We’re seeing it every day—new offers from banks wanting to lend their money with generous programs to help people with less than 20% down, self-employed, or less than stellar credit scores.

What does this mean for you?

If you are considering buying a home the good news is credit will be easier to get—finally. The bad news is that will increase the number of buyers who can qualify for a loan—increasing your competition. This will invariably put even more upward pressure on prices. Just when we thought the rate of appreciation might begin to wane, looser lending standards are tantamount to adding fuel to the fire of home values.

Putting your home search on hold in fear that values are unsustainable may be a fool’s game as less strict lending standards just prolonged the recovery before any market downturn.

We’re into the housing recovery for two years now and we expect that when a correction does occur—and if history repeats itself the cycle will—price declines may only wipe out the last several years of increases. Perhaps five or seven years from now as prices continue to have climbed to new highs will they begin to drop. Based upon past real estate boom and bust cycles, we doubt they will drop back to today’s prices.

This graph illustrates San Mateo County Home Price Trend vs. the City of Belmont. Notice home values are more volatile when viewing a wide swath such as San Mateo County with its dramatically varying cities including Atherton and Daly City. Belmont on the other hand was more insulated during the downturn than the SMC index. Belmont home prices essentially dropping in 2009 to lows equivalent of those of five years previous but within several months after the low in 2009 they had recovered to levels seen in 2006 and by October of 2013 they has eclipsed their previous high in 2008.

 

Bel smc graph for merdian price trend

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of course while we will benefit both personally and professionally as will many of our clients from these more broad lending standards, we could have managed at the current levels which would in all likelihood result in a more stable housing industry and helped avoid more bubbles like we saw in the last decade. And while some specific regulations will help restrict similar dire consequences from occurring, there are others (sub-prime mortgages for example) that will once again allow those who perhaps should not yet own a home to get one–and lapse back into trouble–we’ll see.

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.