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)

New Rules For Tax on Home Sales

Taxes

There are new rules for taxes on home sales you will want to understand. We know taxes are not the most sexy subject, but they’re important for one to understand when it comes to the disposition of real property assets.

First, what is FIRPTA? The IRS defines it as the, “Foreign Investment in Real Property Tax Act of 1980 regarding the disposition of a U.S. real property. Interest by a foreign person (the transferor) is subject to the  (FIRPTA) income tax withholding.”

What the Change to FIRPTA Withholding Means for You

Under current federal law, if a foreign person sells US real property, the buyer is obligated to withhold 10% of the gross sales price and remit this to the IRS. Pursuant to the Protecting Americans from Tax Hikes Act of 2015, however, which became law on December 18, 2015 (the “PATH Act”), the required 10% withholding will increase to 15% for all closings occurring on or after February 16, 2016.There is an exception to the increase for sales of a personal residence wherein the sales price is between $300,001 and $1,000,000. Under this circumstance, the 10% withholding rate continues to apply. In summary:

  • If the sales price is $300,000 or less AND the buyer will use as a personal residence – No change, exempt from withholding.
  • For all other real estate sales the buyer must withhold 15% of the sales price of the real estate (10% if a personal residence with a sale price between $300,001 and $1,000,000) and send it to the IRS within 20 days after the date of transfer.

Do you as a buyer really have to hang onto the 15% of the seller’s proceeds? The answer is if you don’t, you could be liable for the seller’s tax obligation. But not to worry, if you use an escrow company to handle your transaction they’ll take care of it for you, and protect you by having the seller sign a form for the IRS.

Information courtesy IPX Property Exchange Services, Inc. and Lawyer’s Title Company.

 

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.

Are December Home Values Real?

Are December Home Values Real? Can we trust what we hear?

Being REALTORS, we’re used to being asked “How’s the market?”, but never more than during holiday social events.

Real estate is the topic of conversation at a lot of social gatherings—we overhear conversations when we are out and about quite frequently. Usually it’s one person telling another about a crazy home sale in their neighborhood, where the final sale price was hundreds of thousands of dollars over asking, or the number of bidders hitting double digits.

That makes for great story telling, and in fact it’s an accurate one at that. Out of the 20 Belmont home sales in December 2015, 10 sold over $100,000 above the initial asking price. So if that’s become the norm, wouldn’t the better story be the home in the neighborhood that closed over a hundred thousand dollars under the asking price? And in fact that was the case in December, when a home on Adelaide sold for $123,000 under the list price of $1,688,000. We’ll save how that could happen for our next post…

December Belmont Home Sales
December Belmont Home Sales

SALES

Belmont has 20 homes sell in December, besting December of 2014 sales by over 60%.

MEDIAN PRICE

The median home price was $1,431,000 in December, a drop over November’s median home price of $1,652,000, but an increase over December of 2014 when the median home price stood at $1,198,000. Since the median home price seems to be the factor most people focus on, we’ll try and put that ~20% year-over-year increase into perspective.

One of the problems with using the median price is that it reflects if there has been a large amount of more expensive or less expensive homes sold in any given period. In these circumstances, you can often notice large differences in the median home price of a certain city from month to month.

For this reason, it is often better to view median prices over longer periods of time and monitor the trends, rather than looking at one month’s figures in isolation.

Last year the median size home in Belmont that sold in December was only 1,430 sqft, while this December it was 1922—34% larger. A 20% increase in price offset by homes being 34% larger could mean that home values in December actually dropped year-over-year. But this is small market sample, relatively speaking, and therefore subjected to these types of wild swings in data points.

To further answer the question of whether values are still on the rise, we turn to a larger market sample—San Mateo County, where instead of the average 15 sales we have in Belmont in a given month, the county as a whole has 350.

Here we find that the median home price trend went up 22% year-over-year. Since this includes many areas which are just now enjoying the rapid appreciation Belmont has seen in the past several years, areas like South San Francisco and Daly City, this number too is a bit skewed and is not necessarily representative of our mid-peninsula cities median home price growth.

When we take the median home price in Belmont for all 12 months in 2014, we arrive at a median monthly home price of $1,283,750 and using the same calculation for 2015 we arrive at a median monthly home price of $1,506,250—or a 17% increase year-over-year.  Obviously home values are still on the rise, but the exact rate is difficult to ascertain with small market samples.

Days on Market [DOM]

Homes are still selling in about 13 days on average. This is not to say that all homes are selling in 13 days, it means that of the homes which sold, they took 13 days to sell. Some homes languish on the market even in today’s red hot seller’s market and do not sell and are thus excluded from this calculation.

MONTHS of INVENTORY

The months of supply is the time it would take for all the current inventory to sell if it all sold at the current rate without new inventory coming on the market. In Belmont, it stands at .1—yes, that’s 1/10th of 1 percent a month of inventory. To put that into perspective, nationwide the housing inventory level stands at 5.7 months.

PERCENT RECEIVED

Belmont homeowners enjoyed receiving 109.4% of their initial asking price, as compared to 107.2% in December 2014.

It is interesting to note that 35% of the homes sold closed for less than the seller’s asking price. We contribute that primarily to the slower seasonal period.

Belmont Housing Forecast—-Are We in For Another Bubble?

2015 Real Estate in Review and 2016 Forecast–Are we in for another housing bubble?

Our Peninsula housing market certainly has a life of its own.

While the nation’s housing sector has been slow to climb out of thHousing-bubblee doldrums, the SF Bay Area housing sector has been catapulted into the stratosphere fueled by historically low interest rates and demand for housing from the gainfully employed high-tech sector.

U.S. housing growth, as measured by the renowned Case-Shiller Home Price Index supplied by Standard & Poor’s, showed composite housing prices on the national level rose 4.8% year-over-year since September 2014, while the San Francisco MSA (Metropolitan Statistical Area) rose over 11% during the same period. Looking back to when the Bay Area housing market began its recovery in April of 2009, home values have risen 84%, while on a national level they have risen only 20%. (Data as of SEP 2015—S&P Indices lag the market by two months).

—Where do we go from here?

For the last three years, demand has outstripped supply resulting in multiple offers and over bidding, driving home values to record levels. But our housing sector is so heavily influenced by the tech sector’s success that any bump in the road could spell a reversal in fortunes for thousands of homeowners.

It’s seems against the very essence of REALTORS® to acknowledge our industry is susceptible to downturns—this despite recently experiencing the largest housing decline since the Great Depression. Changes in a couple of key market forces could dramatically slow or even reverse the current trend of rapid housing appreciation in the Bay Area.

Jobs—According to the Economic Institute, for each job created in the high-tech sector, approximately 4.3 local jobs are created in other goods and services sectors. That’s great when job creation in the high-tech sector is on the rise, but when the tables turn it could send the housing sector into an economic death spiral.

Interest Rates—The Federal Reserve has been droning on about an increase in the Federal Funds Rate for over a year now. If mortgage rates rise as well, a half percent (0.5%) increase would cause monthly housing payments to be 6% higher. That increase would not only affect the amount one is qualified to borrow for a mortgage, but would also limit monthly cash flow. When money becomes more expensive to borrow, the amount a potential home buyer can bid will decrease, effectively ebbing the tide of over exuberant bidding.

We’re not saying that we believe we’re there yet, and we could be years away, but one thing is certain—home values in our area are at an all-time high, and they won’t stay there forever.

 

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 athttps://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.

Don’t Wait—Beat the Crowds and Buy This Winter

Don’t Wait—Beat the Crowds and Buy This Winter

snow-globe-house

We’ve been saying this for years, the best time to buy a home is when it’s not the best time to sell–and the statistics back us up. But we’re not telling you anything you shouldn’t already know. However, there’s even more compelling reasons this year, with the much ballyhooed talk about interest rate hikes.

Now that the U.S. has regained its job-creation mojo, as the October employment report showed, the demand for housing is only going to grow.

After all, when people have jobs they can break off and form new households—ditching the roommates behind or finally moving out of Mom and Dad’s basement—and that’s what fundamentally drives home purchases.

Most of the households created over the past two years have been renting households, but based on U.S. Census data for the third quarter of this year, it appears that homeownership has started to recover.

This especially makes sense now that it is cheaper to own than rent in more than three-quarters of the counties in the U.S. And it’s not getting better— rents are rising year over year at twice the pace of listing prices. Meanwhile, mortgage rates remain at near record lows but appear poised to increase over the next year. And home prices are rising, too.

So if you qualify for a mortgage and have the funds for a down payment and closing costs—and if you intend to live in a home long enough to cover the transaction costs of buying and selling—you will be better off financially if you buy as soon as you can. After all, if you are tired of your current home now, you won’t feel better about it in six months.

The top factors driving home shoppers this summer were pent-up demand and recognition of favorable mortgage rates and home prices. These drivers will likely remain well into next year.

Yet demand for housing is extremely seasonal. In most markets in the country, we are conditioned to believe that we should buy homes in the spring and summer. So come each October, plans to purchase shift to the spring. While the school calendar and weather do influence the ideal time to move, many buyers would benefit from buying this fall and winter rather than waiting until next spring.

In October, the percentage of would-be buyers on realtor.com® saying that they intend to buy in seven to 12 months was the highest it has been all year and represented the largest time frame for purchase. Likewise, October produced the lowest percentage of would-be buyers saying they intend to buy in the next three months.

In other words, people’s stated plans point to a very strong spring for home sales. Great, right? But here’s the problem: Inventory isn’t likely to be higher in March and April than it is now. And while inventory should grow in late spring and into summer, it won’t grow as fast as the seasonal demand.

So, if you are ready, consider getting in the market now instead of early spring. You will have more choices and less competition, and you can lock in today’s rates rather than risk rates being 25 to 50 basis points higher. (A basis point is 0.01 percentage point.)

A 50 basis-point increase in rates (for example, from 4.05% to 4.55%) would cause monthly payments to be 6% higher. And that increase would not only affect your monthly cash flow but could also affect your ability to qualify.

So if you are considering buying a home this spring, it’s worth exploring the inventory now and reaching out to a local Realtor®. A new home could be the best gift you give yourself and your family this holiday season.

And if you are considering a move, we’re ready to help you make a good decision.

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.

Belmont Home Sales Drop, But Values Rise

Any way you slice this month’s statistics for Belmont home sales, seller’s really made out this October.

October is historically not a great month for home sales, but in recent years with warmer fall weather, it’s been possible to market homes well into the winter months.

Let’s look at the numbers for October 2015…

Belmont Home Sales October 2015
Belmont Home Sales October 2015-Click on the image to enlarge.

 

SALES

Belmont home sales (the number of homes sold), was down 24% year-over-year; down from 21 in 2014, to 16 in 2015. A 24% drop seems like a lot, until you realize only five less homes sold.

MEDIAN HOME PRICE

Belmont’s median home price rose 19% over last October, and was up considerably from the prior month of September.

The median home price in Belmont now stands at $1,546,500. To put that large number into perspective, it has only been surpassed twice before—both times earlier in this year—in May, and again last June. The all-time peak for Belmont’s home values occurred in June of 2015 when we reached a median home price of $1,629,000. Does this mean Belmont home values have peaked? Perhaps. The homes that closed escrow back in June sold for 5.3% more than now, and yet were 6.7% smaller. We’re going to temper that statement with the statistic that the summer price peak to October fall-off has occurred in six of the last eight years.

PRICE PER SQUARE FOOT

This is a check and balance against the median home price. If much larger homes sell during a given period, the median home price will typically yield a larger number as well, while the price per square feet which homes sell for will drop. It’s a quirky inverse relationship that manifests itself since larger homes tend to sell for less per square foot. This happens because land is not involved in the square foot equation,  and can frequently account for up to 50% of a home’s value.

For example, homes which sold in October of last year, were 2,000 sqft in size, compare to 1,905 sqft this year. They sold for $707 per sqft as compared to $877 this October, while the lot sizes remained fairly constant. This means that the median price for homes went up in real dollars—not just that larger homes sold this October.

DAYS ON THE MARKET (DOM)

In both years, it took on average only 18 days to sell a home.

PRICE REDUCTIONS

In 2014, 14% of Belmont home sellers had to lower their asking price. In 2015 that number dropped to .6%–just over one-half of one percent.

OVER-ASKING OFFERS

In 2014 66% of Belmont homes sold for more than the seller’s asking price—this October that number went up to 87%.

The number of homes which sold at the seller’s asking price represented 14% of all sales in 2014 and none in 2015, while the homes which sold under the asking price dropped from 20% in 2014, to only 13% in 2015.

PERCENT RECEIVED

Of the homes which sold in Belmont this October, the seller’s received 109.5% of their asking price, contrasted to last October when they received 107.5.

As you can see Belmont housing market fared extremely well this October.

We are now into the ninth year of economic recovery, and the fourth year of the median home price increasing steadily in Belmont. The question we are being asked by many buyers is “are we at the peak”? This uncertainty in the market can cause buyers to hesitate and sit on the sidelines to wait for the next downturn. If that happens it could be a self-fulfilling prophecy.

We’re not saying that we believe we’re there yet, but one thing is certain, home values are at an all-time high and we won’t stay there forever.

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.

 

Uncertainty in the Housing Market

October brings to mind images of Jack-O’-Lanterns, will-o’-the-wisps, spider webs, creative costume expressions on All Hallows Eve, and the gentle stir of leaves falling from the trees. But there’s more rustling around in the wind than dry leaves right now—it’s the sound of uncertainty in the housing market. Are we headed for a crash? Or is the market still in a Bull Run phase?

We’re getting asked a lot about what we think is going on, as there’s a lot of uncertainty in the housing market. Whenever there’s a perceived slow down, it gives cause for questioning the market conditions. We think those concerns might be a little premature.

But people should be skeptical. The housing market did-in a lot of people during the great Recession and they’d be foolish not to be concerned about being in a better position for the next downturn.

So we hope that our small window of analysis will help you sleep better, at least if you live on the mid-Peninsula—the sweet spot of our market and where we focus our energy.

Belmont September 2015

Belmont–September 2015. Data from the MLS of SMC. Click on the picture for a larger image.

These are the statistics for several of the cities we watch carefully.

San Carlos—Median Price was up 11.6% year-over-year this September. Down from 14% YOY (Year-Over-Year) from 2013-2014 so a bit of a slow down there. Seller’s received 5% more over asking though.

Belmont—Median price rose 12.5 % since last September, up from just 2% YOY (a year earlier) (we discount this as an anomaly of small numbers). Sellers are still getting 107% of asking price—same as last September.

San Mateo—Median Price went up 12.8% YOY, down from a 27% increase in 2013-2014. Sellers are getting 1% more over asking this year than last.

Hillsborough—Median price fell 6% YOY in 2015, down from a 26% increase in 2013-2014. Sellers got slightly more over asking—97% last year as compared to 101% this year.

San Mateo County-This is a good indicator of the overall market conditions since it includes so many cities and a lot of data points. But it can also be somewhat misleading. For example, when prices are skyrocketing in Menlo Park, San Carlos and Belmont early in a recovery phase, Daly City, San Bruno and South San Francisco are typically still foundering. Yet when the top three start to peak in terms of price, buyers flood these less expensive areas and cause the overall increase in the median home price to appear to be climbing, when in your city it may be stalling.

Think of the San Mateo Median home price like a “composite index” if you will. It rose 12.1% YOY since last September, and seller’s received 3% more of their asking price. Last year it gained 18% and in 2012-2103 it rose 16.3%–that’s coming off a 21% increase from 2011-2102.

Let’s hope it calms down even more in 2016. A more sustainable recovery always lasts longer.

NOTE:–As always you can view these graphs on our web page.

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.

Best of Tour Home Search for 10/13/2015

After a break away from touring the past few weeks it was good to get back out and see what new homes are available. We’ve noticed a slight cooling of the market which isn’t all that uncharacteristic of a fall market but this year seems slower than normal–it’s still early in the quarter though.

This is our best of tour home for Belmont and San Carlos today.

Belmont

This home on Lincoln Avenue is a real fixer upper but the potential is written all over the blueprints.

Situated on a large 12,700+ sqft lot according to the agent, all it needs is a renovation to make this home worth $2,000,000.Lincoln

SAN CARLOS

6 Pepper Lane in San Carlos is on the opposite end of the spectrum. This move-in condition home is ideal for a large household with 5 bedrooms, four full baths and 3,113 sqft of living space. Great sunset and twilight views as well as plenty of room for entertaining. Listed with our good friends Teri and Kristina.6 Pepper

10/15/2015 4:30PM-6:30PM

10/17/2015 1:00PM-3:00PM

10/18/2015 1:00PM-3:00PM

Call us if you are interested in either of these two unique opportunities…650-508-1441

 

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.

 

Home Sales Flat for Belmont

Home sales were flat for Belmont, but home values still seem to to be reaching new highs. Belmont’s housing market is in its typical summer slumber with agents and their clients taking well deserved vacations. We hope you are enjoying a getaway soon as well.

With summer in full swing, we take step back and review Belmont’s single family housing market for June 2015.

Belmont Home Sales
Belmont Home Sales-June 2015

SALES

19 single family homes closed during the month of June while last year there were 22—a number which is relatively insignificant except to note that all indications are inventory is not increasing yet. When inventory increases, prices flatten out so we’re keeping a close watch on that.

CURRENT INVENTORY

This June our inventory of single family homes available for purchase was seven—last June there were 22 to choose from. The month’s supply of homes—the time it would take to deplete all of the available listings at the current rate of sales dropped from one month of inventory in 2014 to .35 this June. Anything below six months indicates a seller’s market. Currently, the national inventory of homes stands at around 5.6 months.

MEDIAN PRICE

The median price last June in Belmont was $1,075,000 and this June it was $1,400,000–$325,000 higher or an increase of around 30%. That’s what you will hear in the media and that’s what gets reported and passed along at the water cooler.

But the homes which sold this June were larger by 28%. So did the market only go up by 2%? Not really, the math isn’t a straight line calculation like that. But what it hints to is that values aren’t increasing as much as the raw statistics might lead one to believe. In fact the size of homes sold in the two periods are so dissimilar that it’s hard to draw a definitive conclusion by staring at numbers.

The variance in the size of homes in the two period works out to 502 sqft. At the 2014 rate of $712 per square foot that represents $358,000 which we could subtract from the deltas in the two years media home price of $325,000 to reach an adjusted median price slightly less than 2014. Same conclusion.

The only wrench is that larger homes always sell for less per square foot (since the land they sit upon is a constant and not taken into consideration). But while the size of the homes in 2015 were 28% larger, they still sold for a higher price per square foot, $901 in 2015 vs only $712 in 2014. So were the lots that much larger in 2015? Not really. In both years the lots the homes were on were about the same size.

There is unfortunately, no escaping that this year a single family home in Belmont cost a buyer $189.00 more per square foot—or a 26% increase over last June.

As for how competitive the market is—homes last June sold over the seller’s asking price by on average 9%. This June they sold at an average 19% over asking. Tough to be a buyer right now, or a buyer’s agent for that matter–while all of the sellers we work with are elated.

 

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.