Belmont Week in Review–December 17th 2008

NEW LISTINGS

The holidays are in full swing and you can tell by the deafening silence that Belmont’s housing activity is slower than the holiday deliveries promised by UPS. A very unscientific barometer is our phones are eerily quiet (which is not a bad thing one time of the year) but some ringing other than the Salvation Army’s bells would still be welcome—let’s not jinx anything.

The inventory of homes for sale is at 40—down considerably from just a few weeks ago. Unfortunately it’s not sales that have been driving the numbers lower but rather sellers have thrown in the towel for the year as ten homes were taken off of the market. We just closed escrow on the last two homes we will sell in 2008 and now it’s so quiet that we decided to take a week off from posting homes for sale to take a break and trade the stress of work for the equally demanding stress of preparing for entertaining the family for Christmas. Don’t get me wrong, we love the holidays but it’s non-stop entertaining 24/7 for three days around here.

Our next post about the housing picture will be our year-end wrap-up in early January where we stick our necks out and make foolhardy predictions which can only backfire in today’s economy. Nevertheless we’ll hold true to our word and re-cap last year’s predications (ugh) and try to realistically let you know where we think things are headed in 2009, as well as give the year-end results from one of the most tumultuous real estate years in history.

Stay tuned though as we'll invariably come up with a few fun posts before the year is out.

Until then, Happy Holidays!Christmas Tree

There have been only three new listings in Belmont in the past two weeks.

Debbie 1 Debbie Lane—3 Bed 2 bath 1,800 Sq. Ft. home on a 5,850 Sq. Ft. lot. LISTED for $ 998,000. This is a good solid home at a fair price and located on a small cul-de-sac on Belmont’s eastern hills exposure (than means warmer). It has a usable level rear yard and hopefully you’ll like the small pool or else you can fill it in. It last sold for $740,000 in 2003 during a lull in the market. No OPEN HOUSES listed. Listed By Deborah Mitchell Hawes, Coldwell Banker.

El Camino 820 El Camino Real—5 Bed 3 bath 1,800 Sq. Ft. home. This place has been a rental and really that’s what it should continue to be used for. It offers great tenant parking which of course is very desirable considering the home is on the El Camino. NO OPEN HOUSE LISTED. Listed By H. Craig Thorson, Red Hawk Real Estate Inc.

Yorkshire 418 Yorkshire—3 Bed 1 Bath 1,010 Sq. Ft. home on a 5,000 Sq. Ft. lot. LISTED for $ 577,900. With all of the sales in this area over $600,000 this home is priced to sell. Here’s a perfect well kept home at a discount. This is our BEST DEAL of the week. NO OPEN HOUSES LISTED. Listed By Michael A. Ames, Patriot Properties.

 

No Homes went into a pending status in the last two weeks.

 

SOLD HOMES

 

Well, sold home actually.

 

Fairway ↔1636 Fairway Drive 3 Bed 1.5 Bath 1,720 Sq. Ft. home on a 6,000 Sq. Ft. USABLE lot. LISTED for

$799,000 and sold in 33 days for $799,000. This home has potential but also needed a lot of work. Located on the site of the old golf course in Belmont and an appropriately named (and desirable) street.

 

Allow Me to Think Out Loud…

Thinking The San Francisco Chronicle just splashed more bad news about the housing industry all over the front page of the Friday (March 14th) issue. Sales are down-way down. Part of the explanation seems to be that tightening lending standards have made it hard to afford a home since qualifying at artificially low teaser rates is no longer acceptable. Stated income loans are only available for self-employed individuals and Wall Street stopped buying mortgage backed securities so rates are up too.

Of course buyers who have been priced out of the market are now waiting to jump in at the bottom, which only adds to the rapid decrease in sales activity.

Timing couldn’t have been worse for Congress to approve raising the ceiling on federally backed mortgages from $417,000 to $729,950 in the Bay Area. Many buyers considering purchasing a home are enticed to wait out the market a little more to see if rates will drop further.

So if we had a crystal ball, we’d say that when the new higher conforming loan cap goes into effect, it’s just possible that many buyers will get off of the fence. And if they all do that at the same time, there just possibly could be competition once again for housing.  The biggest fear if you’re a buyer is you get in the market too early and your home’s value could go down before it goes back up; that’s a horrible position to be in if you have to sell while it’s down. The alternative is to get lucky and time it perfectly, or wait to see values going up and be assured you didn’t get the best deal. I don’t know for sure, but history tends to repeat itself and I’ll bet home values go up again sometime in our future. While everyone’s trying to guess when the bottom is not everyone will get it right.

Maybe buying before that happens would be a good idea. If rates do go down further, one could always refinance…

Belmont’s Market Report-February 2008

February sales data for Belmont is available but there’s not much to talk about. There were only five sales (homes that closed escrow) in the month of February. That means only five sales were consummated in January. That’s down more than 50% over last year. While that may sound like a huge percent decrease, it’s important to remember in terms of actual units, it means eight fewer homes sold.Graphtrends

The median price decrease could make headlines though. It dropped from $900,000 a year ago to $750,000 for the same February period. Of course with only five sales these numbers are easily skewed. In fact, the median size home which sold in February 2007 was 1,680 square feet in size compared to this year’s five sales where the median size home was only 1,010. That’s more than enough to explain the difference in the median year-over-year price change. If one was to account for this differential at the going cost per square foot the adjusted median price would be $ 1,122,000 for 2008.

In February, the average home took over 40 days to sell and the seller received only 96% of their asking price.

In every category we measure—the time it takes to sell a home (DOM), the number of new listings vs. sales, the percentage the seller received of asking—the performance was markedly down over last year. Yes the real estate market has slowed and if we were to measure it as we do the economy, you could say it’s in a recession.

Bel_208_postcard

Lies,Damned Lies, and then there are Statistics…

The article titled "California’s October home sales slide 40%" reported by Inman News today evokes thoughts of Mark Twain’s famous saying there are "Lies, damned lies, and statistics".

Though the number of homes which sold is easily tracked, calculating the true median home price is a little more elusive. The size of homes which sell in a particular period can greatly influence this statistic. The median price has been used quite often as a benchmark for home values since all things being equal, roughly the same size homes sell each month. However, current lending conditions affecting first-time home buyers have skewed these numbers and in fact a disproportionate number of larger homes are selling; and since larger homes sell for more, this has created the appearance of an increase in the median sale price in certain areas.

For example, one of the cities sited in the article as one of the 10 cities and communities with the greatest median-home-price increases in October 2007 compared to October 2006 was Redwood City at 20.6 percent. But if one examines just the single family homes which sold in those two periods, it reveals that in October 2006 the median home price was $810,000 and a year later $1,100,500-a whopping $290,000 more! Pretty exciting news for sellers until you look further at the data and realize that the median size home sold in these two periods also grew; from 1330 sq. ft. to 1760 sq. ft. Calculating the price per square foot which homes sold for in October 2007 ($600.00) and applying that to the difference in the size of homes sold (400 Sq. Ft.) for these periods reveals that $240,000 of the $290,000 increase was simply due to larger homes selling-still an increase, but hardly worthy of making the news. And of course if this scenario is played out across California as a whole, one wonders if the 9.9% median home price dip isn’t actually much steeper than reported?

*Data retrieved from the REIL MLS system for San Mateo County.