Winter Home Prices Increase

Winter home prices increase and buck the trends of a winter slowdowns.

We’re getting close to our most anticipated analysis—the year end summary for Belmont. But before those numbers are in the history books, we are closing out the year with November’s home sales report.

The Belmont home market continues to show strong growth after a lackluster fall market. Typically we see a strong push for home sales after Labor Day and a winter hibernation period once we get past Thanksgiving. This year seems to be at odds with historical trends as seen in the median home price which has risen steadily since August.

This November in Belmont the median home price was at $1,342,000 which was only eclipsed once in July of this year. Last November the median home price was $1,089,000. That translates into a 23% increase in the median home price year-over-year.

Did larger homes sell this year artificially skewing the median home price higher? The answer is yes. The size homes which sold this November were 18% larger. If we account for this in the median home price analysis we arrive at a more reasonable appreciation level of 5% year–over-year—which of course is just an approximation.

As prices get higher, demand wanes and the rate of appreciation levels off—as is demonstrated in the above numbers.

SALES & NEW LISTINGS

The number of homes sales dropped 44% year-over year since last November. Upward pressure on home values is being fed by the lack of inventory as new listings dropped 20% as well.

PERCENT RECEIVED

The amount which Seller’s received of their asking price was essentially unchanged at 107 % of asking.

OVER-UNDER

While 72% of all home sales sold for over the asking price—unchanged since last November, this year no seller’s had to adjust their asking prices lower. Last November 20% of sellers lowered their asking price for on average $200,000—indicating a slightly more robust November this year.

On a macro-level, the San Francisco Metropolitan Statistical analysis (the SFMSA) prepared by Standard & Poor’s, and referred to as the Case-Shiller study, reported a decline from August to September of .2%. The Case-Shiller uses a repeat sales pair methodology—virtually watching the same home sell over time. Not that .2% is a monumental shift in trends, since as can be seen in the chart below, seasonal factors cause even a large area like our MSA to fluctuate to a much greater degree.

This graph compares the MSA for our area year-over-year for the past three recovery years. Note that a fair amount of each year’s appreciation (increase in the index) occurs in the first two quarters of each year.

MSA Year over Year

 

 

 

 

 

 

 

 

 

 

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.

 

Housing Market Prices Halve

With the Autumnal Equinox just around the corner, we look back a great summer. Now to get caught up on the housing market since we’ve took some much needed time off.

On the national level…we gleam this insight from Standard and Poor’s website…

“Home price gains continue to ease as they have since last fall,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “For the first time since February 2008, all cities showed lower annual rates than the previous month. Other housing indicators – starts, existing home sales and builders’ sentiment – are positive. Taken together, these point to a more normal housing sector.

“The monthly National Index rose 0.9% in June. While all 20 cities saw higher home prices over the last 12 months, all experienced slower gains. In San Francisco, the pace of price increases halved since late last summer. The Sun Belt cities – Las Vegas, Phoenix, Miami and Tampa – all remain a third or more below their peak prices set almost a decade ago.

“Bargain basement mortgage rates won’t continue forever; recent improvements in the labor markets and comments from Fed chair Janet Yellen and others hint that interest rates could rise as soon as the first quarter of 2015. Rising mortgage rates won’t send housing into a tailspin, but will further dampen price gains.”

“All 20 cities used for the Case-Shiller report saw their year-over-year rates weaken in June. For the second consecutive month, San Francisco saw its rate decelerate by almost three percentage points – from 18.4% in April to 12.9% in June. Phoenix showed its smallest year-over-year gain of 6.9% since March 2012. Cleveland showed a marginal increase of 0.8% over the last 12 months while Las Vegas led with a gain of 15.2%. All cities reported price increases for the third consecutive month; it would have been a fourth had New York not declined 0.4% in March. San Francisco posted its eighth consecutive price increase but showed its smallest gain of 0.3% since February. Five cities – Detroit, Las Vegas, New York, Phoenix and San Diego – posted larger gains in June than in May. Dallas and Denver continue to set new peaks while Detroit remains the only city below its January 2000 value.”

Everybody wants to know when this crazy market will end.  People just can’t imagine that it will continue at this pace—and of course it won’t, and it didn’t and we’ve been predicating this all along; that the rate of appreciation would wane once home prices rebounded to levels which are sustainable.

The housing market dropped too far and filling that void happened very fast—essentially 2012 until now. We are now reaching new high home values and people are just plain being priced out—with fewer and fewer people who can afford the median price home.  But while the rate of appreciation is slowing, home values are continuing to rise, just at a much more sustainable and slower pace.

The San Francisco MSA (which consists of the counties of San Francisco, Marin, San Mateo, Contra Costa and Alameda), while experiencing a slowdown in the rate of appreciation (by almost half), nevertheless still enjoyed a 12.9% increase year-over-year.  You can see a graph we’ve put together of the SF MSA data points illustrating the trend over the past 27 years.

*Note—the Standard & Poor’s Index lags the market by three months.

The good news is a home won’t cost you 25% more next year, probably just around 10%. But who wants to pay a 10% penalty for waiting?

 

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.

Home Value Increases Taper in July

July is a great month in Belmont as the wind winds down a bit in anticipation of our Indian summer.

We hope everyone had a great Fourth of July weekend and our slightly warmer than usual weekend.

If you are interested in the local microclimates in Belmont you can visit Weather Underground’s web site where folks like us upload our personal home weather station data. It’s interesting to see the various Belmont of micro-climate pockets.

On to the numbers…

[Click on the picture for a large view]
[Click on the picture for a large view]

 

Talk about low inventory–real estate has been very slow this week as you can imagine. Tuesday was our Broker tour day and there no new listings in Belmont or San Carlos to even view. We can’t remember the last time that happened.

In this post we visit the home sales in Belmont for the month of June 2014.

SALES

Sales of existing single family homes dropped 15% over last year from 26 sales to 22 this June.

 

 

 

 

MEDIAN PRICE

Belmont’s median home price rose almost 20% over June of last year. The size of homes selling in the two periods also dropped almost 10% from 1975 square feet in 2013 to 1778 square feet in 2014 which does nothing but exacerbate the median price increase since for 20% more you can now buy a home 10% smaller. At $1,099,000, though, it’s a steep drop from May’s astounding median price of $1,300,000. Of course the homes which sold in May were over 16% larger and the median price only dropped 8.4% so there’s still a paper net gain of 8%.

Compared to June of last year, single family residential median price levels rose in all counties with Santa Cruz County up 20%, Monterey County up 16%, San Mateo up 14%, San Benito up 15% and Santa Clara County up 12%.

DOM

The time it took to sell the average home in Belmont was 12 days—down from 14 last year.

OVER ASKING SALES

91% of the homes sold over asking in June of 2014 compared to 88% during the same time last year.

PERCENT RECEIVED OF ASKING

This is the one statistic that indicates a slowdown in the rate of market appreciation. In 2013 the average seller received 112% of their asking price. That dropped to 109% this month—exactly on par with last month.

What does this drop mean? It’s probably indicative of values getting closer to where they should be for now. The initial increase we have seen over the last two years was clearly unsustainable but also understandable.

Prices had dropped well below expected value levels and that deficit was easily wiped out in 2012 as the market began its rebound in earnest. In 2013 we saw the rebound continue into unchartered waters and prices hit a high watermark. This year we see more of the same but as prices continue to rise fewer people can qualify for the median priced home and begin to seek less expensive cities—watch out east bay.

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.

 

Drew & Christine Morgan did not necessarily participate in these sales.

 

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:

Belmont May 2014

 

[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.

SALES May 2014

 

 

 

 

 

 

 

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.

New Listings

 

 

 

 

 

 

 

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.

Median May

 

 

 

 

 

 

 

 

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.

percent received May 2014

 

 

 

 

 

 

 

 

 

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.

 

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.

Best Way to Sell A Home

Agents can be their own worst enemy when what they should be doing is finding the best way to sell a home.Frequently Unasked Questions

The real estate business is hard enough without agents making it even more difficult. Many of our clients assume we work 24/7 and the business practices of many agents essentially ensures that we do.

There’s no standardized best practice when it comes to lunching a home for sale. Homes pop up every day of the week and offers are entertained anywhere from before a home even hits the market, to hours, a few days or weeks later.

Take for example our local market where with very little inventory, homes are flying off the shelf. Unless there is some sort of structure to the launch and contract review day, one could never get a day off as every time a home would hit the MLS agents would have to scurry over and get their clients in within minutes or the home might be sold.

Thankfully, many local agents set a date to entertain offers so that buyers and their agents aren’t scrambling to see all of the available homes at a moment’s notice.

Recently, a new standard of practice has started to develop as some agents have begun listing properties before the weekend—holding one weekend of open homes, a Tuesday Broker tour, and listening to offers the following Friday. That equates to 7 days on the market. And while it brings some semblance of order to our otherwise chaotic trade, it’s not the best course of action to get the seller the most for their home.

The first issue is the earnest money deposit. Listening to offers on Friday is fraught with anxiety as our contracts default to 3 business days to deposit the buyer’s consideration (deposit) into escrow. A Friday offer date means the buyer’s deposit money doesn’t even hit escrow until Wednesday of the following week—five days after contract ratification. Even if the buyer’s agent changed that in the contract to 1 business day, the deposit is still not due until Monday after a weekend of new open homes. It’s not unusual to see a buyer get cold feet or see a better home over the weekend and decide not to deliver the deposit. No agent wants to find themselves trying to resurrect a highest offer a week later yet they continue to put themselves and their sellers at risk.

Another issue is sufficient market awareness and, the mere practicality of seeing a home, analyzing the recent sales in the area, reviewing the reports and making an informed offer. Most buyers today spend more time choosing their washer and dryer than they do actually buying their home—it’s an unsustainable pace and will invariably lead to lawsuits.

Anecdotally, we’ve encountered many buyers during our first open house praying that we will be open one more weekend as their spouse was out of town for the week. If you market your home for less than one week you’re potentially missing out on interested buyers who may be unavailable during that small window. And imagine the frustration when buyers who take just one week off to get away during their year long home search are out of luck when the ideal home gets listed by one of these agents the week they are away.

Our research indicates we’ve received some of our highest and best offers often from a buyer who saw the home at the second open home. On a home we just listed and sold with four offers in 11 days, had we heard offers before the second open house we would have missed out on two of the suitors (bidders) who came through the second weekend.

But who is to say our strategy works the best? The numbers do. We consistently outperform other agents with the percentage over the asking price we net our sellers. And it’s not because we under price our listings. We do this by sticking to a formula with proven results. We’ve also never had a buyer voluntarily back out of one of our listings once in contract. We contribute part of this success to slowing down the process and not putting people in a foot race. We think that market saturation is good for sellers and buyers as the sellers get maximum market attention and buyers have more time to digest whether a home is right for them before they get into escrow.

The numbers below represent all of the homes sold in Belmont year to date. Notice that there’s a sweet spot where too many days on the market and a home gets far less, and too few not enough.

Sellers who marketed their home on average for ten days received more than agents who took offers too soon. It’s also interesting to note that of the 67 homes which have sold thus far this year, the highest over asking a seller received was 46%–marketed for 10 days. In fact eight of the 14 homes which sold 20% or more over asking were listed for greater than 10 days but less than 14.

Median
% over Asking Days on Market
>20%

10
15-20 %

9
10-15%

12
5-10%

8
0-5%

34
< 100%

33

mortgage-rates27-300x300

 

Many agents banter about claims that they will sell your home for more money in shorter period of time—but we have the numbers to back us up. We base our system for marketing homes on a proven strategy that nets our sellers consistently more than the other top agents in our territory. Our listings are all on the market for 11 days which accounts for two weekend of open houses, one broker tour and offer date after the second set of open houses. To find out what else we do, contact us directly to learn more about our progressive services.

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.

Housing Market Cooling Down?

Are Belmont home values or sales tapering off? Are we in for a cool down?

This month we look at April 2014 sales for Belmont to see if home sales or values are waning.

There’s much speculation even among our colleagues as to what is happening in our market and how sustainable our current housing environment may be. Most agents believe that we cannot continue at this pace but beyond that there seems to be no quorum on where the market will go from here.

Rather than guess what may happen next we like to watch what is happening to see if there’s a pattern.

Each year our housing market endures seasonal fluctuations at various times which affect the inventory levels, the number of sales, the number of new listings and even the percent a seller receives. Varying market conditions weigh more heavily on the median home price and the days on market.

When we look at April’s number for 2014 we’re comparing year-over-year numbers for the same period. This way we can objectively analyze where we should be in the seasonal sales cycle and dispense with any hyperbole about whether the market is “cooling down” or “heating up”.

Whenever there’s even a slight shift in the wind of inventory or sales from one month to another it’s second nature for agents to think the market has shifted into a cool off phase, when often it’s nothing more than a seasonal fluctuation which should be expected.

Looking at the important statistics we track each year, we went back to the beginning of when our Multiple Listing Service retained records—1998.
The question at hand is not whether April sales or listings are up or down as compared to March, the question is how do April’s numbers compare to every other April?

In analyzing the April markets, we allowed for a small adjustment when looking at the numbers for each April to avoid comparing dissimilar markets and to eliminate a wash-out of statistical values. We not only compared ever April since 1998 to April of 2014, we also compared every hot April market and every slow April market.

APRIL 2014

 

[click on the picture for a larger view]

PERCENT RECEIVEDHot Market vs slow
In each case April 2014 indicated an intense market. For example, the percentage a seller receives of their asking price in April has averaged right around 103% since 1998. In slow markets April’s percentage received has been a paltry 99.6% and in hot markets it has skyrocketed to 105.69%. This April it stood at 114.09%–8.7% higher—and 8% higher than the previous high in 2006 at what was then the peak of the market.

NEW LISTINGS
The number of new listings which have come on the market in April of each year has averaged 35. In a slow market Belmont averages 39 new listings for sale and in a hot market 32. The previous high listing count was in 2005 when 43 new listing hit the market. This year there were only 25–a low not seen since the slow down in 2007 when there were only 23. The current number of new listings hitting the market is statistically aligned with that of a slow market–not a hot one. Remember, this is April under a microscope. Lower than typical inventory could serve to continue to put upward pressure on values.

MONTHS OF INVENTORY
The time it would take to sell all of the homes currently on the market at the current rate of sales is referred to as the “Months of Inventory”. It’s designed to provide a useful ratio between listings and sales. Expressed as in terms of “months”, it’s a good indication of the strength of any housing market. April’s months of inventory has averaged 2.44 months over the past 16 years. In slow years it has averaged 3.73 months and in hot markets averaged 1.54. In April of 2014 it stood at 1.0–an all-time low with April of 2005 coming in second at 1.21 months. Nationally, this number stands around 6.3 months.

When sales are down from March to April, or the number of new listings rises incrementally—as they did this March to April when three more homes came on the market, it’s less important than where they should be historically.

The most interesting pattern we observed was when we filtered out for hot and cool markets. We notice that periods of hot and cool markets seemed to last about three to four years each before a correction. The last correction began in 2012. Has the market peaked? Statistically speaking, April should soon…

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.

Drew & Christine Morgan did not necessarily participate in these sales.

 

 

 

Belmont Home Prices Crazy

Belmont Home Prices in March Are Off the Charts Hitting an All-Time High Water Mark

High Mark - Blog

Just when you thought it was safe to go back in the water—even if it was just to dip in your toe—wham—the market showed its full force and effect in March’s numbers.

Belmont March 2014[click on the image for a larger picture]

SALES

Dropped 32% from March 2013. There were only 15 sales this year as compared to 22 last March.

Why?

INVENTORY

Typically when we see fewer homes sell year-over-year, it’s because there are fewer homes to sell OR the market is changing. Looking at the inventory of homes for sale, this March there were 16 homes for sale and last March there were 14. There were 21 new listings last year and 22 this March.

If inventory levels are actually higher, but sales are down what’s going in?

MEDIAN PRICE

The median price skyrocketed year-over-year from $1,044,000 in 2013 to $1,328,888—a 27% increase in one year.  The previous high median home price in Belmont was in September of 2013 when it stood for one month at $1,239,444–as one can see that’s a substantial increase and might easily put a damper on sales as fewer people can afford to buy the median price home.

Did larger homes sell in 2014 artificially buoying the median home price? Not at all. In fact, the size of the homes which sold in March were a tad but smaller than in 2013. The median price per square foot tells the same story as it rose 29% over last year to $746.00 per square foot.

In 2013 two homes offered price reductions and while four homes sold under the asking price, three sold at asking and 15 sold for more. This year none of the sellers had to lower their asking price and all but one home (listed by an out-of-area agent not familiar with Belmont values apparently) sold for less—every other home sold over the seller’s asking price.

PERCENT RECEIVED

How much over asking? This March sellers received on average 115% of their asking price compared to 108% last year—almost double the overbid amounts in just one year. Has competition ratcheted up a notch?

DAYS ON THE MARKET [DOM]

The time it took to sell a home in March dropped from on average 27 days last year to 12 in 2014.

When you hear the term unsustainable this is what they are referring to. But Belmont is not unlike other towns further south which have been either suffering from this affliction or enjoying the reward of appreciation (depending on your perspective)—for several years now. Palo Alto leads the appreciation pack and when prices get too out of balance buyers migrate to Menlo Park—then San Carlos—then Belmont—then San Mateo.

At some point the rate of appreciation will slow if for no other reason than buyers can no longer afford to buy the median price home. But in reality, nomadic instincts will kick in as buyers graze further north in search of one of our most basic needs—shelter.

SELLERS—if you’ve been waiting for the right moment to strike a “For Sale” sign in your yard—we may have reached the pinnacle of opportunity.

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.

Drew & Christine Morgan did not necessarily participate in these sales.

Belmont Home Sales Off To A Frenetic Start

 

It seems the Belmont housing market is off to another strong start in 2014.

In every category we track, homes sales in February of 2014 were stronger than in 2013.

Belmont February 2014

SALES

Sales were at a dead tie with last year. Considering there were fewer homes to sell, that’s a strong indicator of the urgency on the part of buyers to get a home before the prices (and/or interest rates) rise any further.

[click on the image for a larger picture]

NEW LISTINGS

This February Belmont had 20 new listings compared to 23 in 2013.

INVENTORY

The number of available homes for sale this February was only 14—down from 17 last year during the same time.

DAYS ON THE MARKET (DOM)

The average time it took a Belmont home seller to sell their home this February was only 11 days, down from 17 last year.

PERCENT RECEIVED

Sellers for Belmont homes received on average 109.32% of their asking price compared to last February when they received 107.37%—still far above the state average.

MONTHS OF INVENTORY

The total months it would take to sell of the current inventory dropped from 1.55 months last February to 1.27 months this year. The national average is 5 months of inventory.

All indications are for another strong year—as we predicted. Next report we’ll wrap up Q1 with March’s numbers.

If you are considering a move this year, the spring time is a great time to get top dollar with competitive offers.

WRAP-UP

SELLERS—

GOOD NEWS—you can sell your home quickly at the right price. Most homes are selling over asking if priced according to our current market conditions—that is to say most homes sell for +/ 10% over asking so pricing at what your homes is worth makes it overpriced to buyers.

Not all agents get you the same results—interview wisely.

BAD NEWS—this seller’s market won’t last forever. More homes are coming on the market because more sellers have equity to move. The days of paying too much for a home and windfall profits are nearing the end.

BUYERS—don’t think if you read the above that you can wait out the market. That’s a fool’s game as although the rate of appreciation will wane, it’s still in positive territory for the foreseeable future.

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.

Drew & Christine Morgan did not necessarily participate in these sales.

Can San Carlos Housing Market Withstand The Heat?

What is happening to the San Carlos housing market?

How short our memories are—just eight years ago our area was headed for the largest market correction—free fall—since the Great Depression. Three years later, in 2009, the market hit bottom, but it wasn’t until 2012 that things really started to heat up—and heat up fast.

Home values hit unsustainable highs in 2006 fueled by risky loans. The inevitable correction brought values below what would have been considered to be a reasonable correction, so of course when buyers once again felt confident about their jobs, the market rebounded at an exponential rate—quickly wiping out any loses within two years.

Where are we now? Our MSA (Metropolitan Statistical Area) comprised of counties San Mateo, San Francisco, Marin, Alameda and Contra Costsa is still short of the once all-time highs seen in 2006. But real estate is local and the mid-peninsula is rebounding at a much faster rate fueled by the increase in Bio and tech jobs. Our area surpassed the pinnacle of index values in 2012 and we are now in uncharted waters for high home values.

Just this month in San Carlos (March 2014), homes have been selling for on average 113% of the seller’s initial asking price with only two homes selling for under asking.

Rosewood

The one clear standout was this home on Rosewood, a stylish two bedroom 2,184 square foot home in the coveted area of San Carlos referred to as the White Oaks. Listed appropriately for $1,179,000 it sold with multiple offers for $1,728,000—and that is not a typo—$549,000 over the seller’s asking price (47%). To help put that stunning overbid into perspective, it’s about double the median home price in the United States.

Where will this all end? Of course there will be another correction at some point and those who purchased a home near the peak will be in the most precarious position, should they need to sell.

Imagine a game of musical chairs and when the music stops the market crashes. It’s better to be the first one who sat down and enjoy the appreciation while others scramble to find their place.

Is there anything a buyer can do to avoid these historical pitfalls? Innovative home price protection companies have sprung up to help cover any losses—like gap coverage for a car lease. If you are considering buying a home and would like more information visit our web site at MorganHomes.com and click on Home Price Protection tabs in the middle of the page or email us at info@morganhomes.com.

 

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.

Drew & Christine Morgan did not necessarily participate in these sales.