Consumers stand on the precipice of change, facing a future where the very essence of home buying is upended.
Continue readingBeneath the Surface: Navigating the Turbulent Waters of Home Purchases
How to Stop Agents from Behaving Badly at Your Expense
If you’re considering selling your home, you’ve probably also been thinking about how to go about finding the right real estate agent to help.
Choosing precisely the right real estate representation makes a bigger difference than you might ever imagine. So where does one begin?
DEFINING A TOP AGENT
REALTORS banter around the term “Top Agent” quite loosely—Top 1%, Top 10%, etc. They earn that title for dollar volume in sales—not any independent measurement of the quality of their work or survey from past clients. In the Bay Area, most agents surpass any threshold for earning the Top award distinction due to the median sales prices—not the they are any better than their colleagues in Kansas who need to sell 10 times the number of homes to garner that distinction.
Discard any idea of using on-line companies that recommend agents or say they will “find” you a perfect match. These are nothing more than companies extorting money from agents to be in their directory. They are not recommending the best agents, but rather the ones willing to pay to be recommended.
YELP tends to do the same thing. Although the reviews are organic in nature, agents must pay to be listed at the top of the search, even though they are often far from top agents.
Agents with the most listings or yard signs in a neighborhood are also not necessarily the agent doing the best job, they’re just getting the most attention.
Doing a native on-line search is more time consuming, but it will yield you the best results. Search for local agents that have been in the business long enough to have learned the ropes at someone else’s expense. Any real training of agents happens in the field, not the classroom. Look for examples of their work product on their own web sites—video tours, photos, and descriptive informational pieces.
THE MEET
Once you’ve found an agent you’d like to meet with, reach out and set up an initial meeting. Don’t call three of four agents all at once. It takes hours to prepare for a meeting and you’re wasting agents’ valuable time.
If you’re not happy with the first agent you meet, by all means contact another.
No two REALTORS are the same and each one acts essentially as their own independent contractor. They develop a business plan on their own and so you’re really hiring the agent, not the company they work for.
Are their differences in the companies’ agents work for? Sure, but far less important than the agents you’re hiring. Most agents will focus on how big (or small) their company is—how much “market share” and how much “technology” they have but how does that really benefit you?
The fact is most agents are capable of selling your home in this seller’s market, but the service they offer and the attention to detail and marketing varies greatly.
With that invariably comes differing degrees of success and results.
SELECTING AN AGENT—WHAT QUESTIONS TO ASK
These are the questions most sellers are prepared to ask:
- How much do you charge?
- What do you think my home is worth?
More detailed sellers might throw in a few more:
- How long have you been in business?
- In what cities do you specialize?
- Do you work with mostly sellers, or buyers?
- Do you have referrals with whom we may speak?
And that’s pretty much the extent of most sellers’ questions. The two which paradoxically seem to carry the most weight are two sellers always ask—how much is my home worth and what do you charge. These are two very important questions, but they should have little to do with choosing an agent. You can always find a discount agent to sell your home and you will most certainly get cut rate service and results as well.
The price the agent tells you your home is worth should also have little to do with whether you hire them. You get to pick the asking price for your home and if you’ve watched sales in your neighborhood, you probably have a pretty good idea at what price homes are selling.
Be careful not to decide on your agent based solely on the highest estimated sale price you hear, since that agent may not know your market or could be trying to “buy” your listing—meaning they are trying to get you to list with them under the pretense that they can magically get more for your home just by asking for it. Unfortunately, it just doesn’t work that way.
Buyers choose the price they are willing to pay for your home—not you as a seller or your agent!
We’ve heard sellers say, “We’re going to hire the REALTOR that sold our friends house—they said that they liked him and felt that he did a good job.”
And perhaps they did do a good job, but then again maybe the seller just thought because they received multiple offers well over the asking price that they must have done a good job. But could they have done better?
THE MOST IMPORTANT QUESTION
Results. Before you’d consider having any important surgery done, wouldn’t you like to know what your Doctor’s survival rate is for his patients? How many operations has she performed? How much they charge would probably be the least of your concerns, so long as you survive to pay the bill.
Wouldn’t it be nice before booking a flight to know how long the pilot has been flying and how many hours they’ve logged?
Any agent can proclaim to be the best, or sell their listings for more in a shorter period of time, but you need to ask for proof.
IT DOESN’T GET UGLIER THAN THIS
These sellers probably thought their agent did a good job as well. After all, they received $126,000 over asking!
When the sellers hired these agents, they no doubt never expected this shoddy work product would be what they received—and we can all but guarantee that it’s not what was promised.
This is what is referred to as a Moral Hazard—wherein under the contractual protection of a listing agreement an agent takes advantage of their client—promising one thing and doing another.
But as bad as the photo of the home on its side may be, the agents went on to boast in the private comments (in red) to all agents, that had they waited to hear offers, they would have received three more—and one back-up offer was for $25,000 more than the early offer they may have steered their seller into accepting. To add insult to injury, when they went back into the listing to amend the comments with self-aggrandized accolades once it closed, they still never took the time to fix the photo. So great job Dino!
This may be a gross example of agents taking advantage of a seller, but many agents are guilty of taking the path of least resistance, (e.g. work), to get paid.
We can’t count how many times we’ve represented a buyer, delivered an offer only to receive a call late at night that the seller accepted a different offer. Many times, if the agent had reached out to us, our buyers would have stepped up in price and the seller would have received even more for their home.
We often download disclosures for our buyers which is an indication that we have a very interested party. An offer date is set and we rarely if ever receive a call from the listing agents asking if our buyers are interested in making an offer, and if not, why.
BROKER TOUR, OPEN HOUSES & ADVERSE SELECTION
Agents will probably tell you that they will hold open your home for all agents to view on a special day referred to as “Broker Tour Day”. They may even tell you that they will serve food to attract the masses. And unless you ask if they will be present—they usually won’t. Agent Teams that have someone different for every aspect of the job are especially guilty of this. Many times, they don’t even go that far—they have a vendor such as a mortgage company hold open the home so they don’t have to bother being present. Other times we’ve seen the “Catered Broker Tour Lunch” promised to the seller relegated to a tray of stale sandwiches on a counter with the agent nowhere to be found. Being present at an open house is critical to answer other agents’ questions about the home.
Unfortunately, these breaches in moral behavior are more common than not.
YOU CAN DO BETTER
Do your homework. Research agents organically on-line to see what work product they are capable of and delivering. Then, be armed with the best questions most agents are ill prepared to answer.
If you’re interested in receiving a list of questions every seller should be asking, we’d be glad to deliver 35 of the best questions when we meet in-person for our initial visit.
Here’s a preview…
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Fed Interest Rate Hikes and Your Mortgage
By now you’ve probably heard that interest rates will soon be rising. The media reports simple sound bites such as, “Interest Rates Rise” which is of little help in understanding to which interest rates they are referring—credit card debt, student loan, small business loans or home loans?
Why are the Feds Raising Rates and What will it Mean?
The Federal Reserve rate making the news is set by the Federal Open Market Committee, which is part of the Federal Reserve. It is used as part of a monetary policy to attempt to help smooth the inevitable business cycles that the economy experiences.
When we hear “The Feds are going to raise rates”, it’s important to note that specific change to the Federal Reserve overnight rate affects adjustable-rate mortgages. One must also watch Treasury Notes and Bonds for volatility in fixed rate mortgages.
The Federal Reserve keeping interest rates low helped us all through the 2007-2009 recession and again was employed during the Pandemic to help keep the economy from wild market force swings.
After the housing bubble burst in 2007, conforming loans actually had higher interest rates due to their greater propensity for default, while Jumbo loans enjoyed smaller rates of default as they were often tired to a properties with more equity.
But the Fed needs room to maneuver and raising the rate to more normal levels gives them some ammo in their arsenal in the event they need to employ their interest rate weapon again.
Since the attack on Ukraine, the feds have already signaled that they will slow any rate hikes this year for fear of stalling the economy. Once they begin raising rates it will serve to slow down the current high inflation by dampening spending.
This is a good illustration of how the Feds use this tool during recessions to stimulate or suppress the economy.
What Effect Interest Rate Hikes will have on Home Loans?
As we discussed in an earlier blog, the Federal Reserve rate—does not necessarily mean home loans will follow suit—though some often do.
- The 10 year Note (typically affects 15 year fixed rate mortgages)
- The 30 year Bond (typically affects 30 year fixed rates)
- The Federal Funds Rate (affects Adjustable Mortgage rates)
As interest rates on Treasury notes rise, banks can raise the interest rates on new fixed rate mortgages. That means home buyers will have to pay more each month for a loan which in turn takes away purchasing power. Typically, when interest rates rise, home prices fall. When housing prices fall, the economy slows.
One of the rates most often discussed is the 10-year note. This frequently serves as a benchmark for setting long-term rates like commercial and residential mortgages. This rate is not directly set by the government. It is determined by market forces, often as simple as supply and demand.
Although today’s rates aren’t crazy by historical standards, they are higher than they have been in years, and that’s likely to have a small effect in the housing market — though we don’t see housing prices to declining significantly.
“More than a decade of chronic underbuilding and millions of millennials moving into the homebuying stage of life has created a significant imbalance between housing supply and demand,” McBride from Bank Rate said.“While rapidly rising mortgage rates may temper the demand somewhat, don’t expect home price appreciation to come to a halt. A more modest pace of appreciation is the likelier outcome.
More About Mortgages
Conventional mortgages fall into two main categories: “conforming” and “nonconforming” loans.
Conforming loans are home loans that are purchased by government entities such as Fanny Mae and Freddie Mac and must meet their guidelines such as the amount of down payment. These organizations make the access to more mortgage loans available. These tend to be smaller loans.
The Federal Housing Finance Agency (FHFA) raised the 2022 Conforming loan limits in California. This allows some mortgage loans that were previously labeled “Jumbo” to now be placed in the Conforming loan limit category. Conforming loans in California generally come with better mortgage rates and easier underwriting requirements.
A ”Jumbo” loan is considered a non-conforming loan, when it is in excess of the loan limits allowed for a conforming loan.
What Are The 2022 Conforming Loan Limits in the Bay Area?
San Francisco, San Mateo & Santa Clara all have the highest limits available—$970,800 for a conforming loan.
What Does this Mean for You?
If you’re a homeowner thinking of selling, higher rates could impact the amount buyers can overbid for your home, as higher rates impact purchasing power.
If you’re a buyer, it means money will cost you more going forward so finding a home sooner rather than later could save you thousands of dollars. Every time there’s a tick up in interest rates buyers get more anxious about completing a purchase—so expect more short-term competition.
Our belief is that a modest rise in the fed rate will have a nominal effect on interest rates, but since lenders can react in any way they choose, all bets are off to definitively say how the upcoming rate hikes will impact our local housing market.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
A LOOK AT 2021 HOUSING AND WHAT LIES AHEAD IN 2022
Unless you’ve been living under a rock the past two years, you’ve no doubt heard that home values climbed their assent into the stratosphere.
But as local agents for over 25 years, even we have a hard time wrapping our heads around the staggering numbers.
You may have also heard that there’s “no inventory”. Well, that’s not exactly true.
Then what’s causing the spike in prices? High demand, not lack of supply—unlike the overall economy that’s suffering from a lack of supply and high demand.
Comparing the annual number for 2020 to 2021, we’ll start with the inventory of homes for sale.
The number of new listings that came on the market in 2020 was 234 in 2020 and 249 in 2021 which is an increase of 6.4% more homes available for sale in 2021. Then why is everyone talking about low inventory? Because sales went from 183 units in 2020 to 254 in 2021—a whopping 38% increase—so there are no homes left to buy.
One might ponder, “How can that be?” If you only have an increase of 6.4% in new listings, how can you have 38% more sales. The answer is everything is selling in 2021 while in 2020 some of those new listings never made it into escrow.
That’s evident in the days on market, which dropped 45%, from 20 days to only 11, and the percent a seller received over the asking price climbed from 105% in 2020 to 114% in 2021.
Another indicator of the scant number of homes available at any given moment is the “Months of Inventory” statistic, that measures how long it would take to sell all of the available inventory at the current rate of sales. That dropped from a meager .4 months, to an almost immeasurable .1 month, (overall, the U.S. stands at around six months of inventory at any given time).
What effect did this have on home values? Nothing, but it had a lot to do with home prices. They hit their highest level in history recording a median home price of $2,245,000 up from $1,888,000—a 19% increase YOY and a 28% increase in the past two years—while the size of homes selling in the last two periods stayed statistically similar at 1,968 and 1,962 square feet respectively.
This is an article we did back in 2018 on the supposed crest of interest rate hikes.
There is some cooling off of the astronomical climb in prices as noted by the Case-Shiller study for the Bay Area’s metropolitan area, but that may not reflect our local hot spot trends in the mid-peninsula.
What to Watch Out For
Rising interest rates may give buyers some relief from a super-heated market, may also serve to quell their purchasing power while softening prices. The irony is just when buyers may be able to compete in the market, even if they were to pay less for a home, they’ll end up paying more in interest in their loans.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
BELMONT HOME VALUES CONTINUE THEIR ASCENT AS SALES DECLINED
It wasn’t just Sir Richard Branson and Jeff Bezos that have shepherded in a new era. Belmont single family homes values have continued their pandemic born steep ascent.
First, the numbers:
Belmont home values continued their astronomical ascent as sales declined in September of 2021. Belmont sales of single family homes fell 9.6% from September of 2020 to the same period in 2021. Compared to September of 2019, pre-pandemic, sales were up this year more than 53% in 2021.
The average time it took to sell a home went down from 19 days to 12.
The Months of Inventory—the time it would take to sell all the homes on the market at the current rate of sales—went from .8 months down to .5, and the available inventory of homes to choose from went from 21 in 2020, to only 11 in 2021. To put this into perspective, the U.S. housing inventory sits at 6.1 months.
The median home price rose from $1,925,000 to $2,235,000, close to a 12% increase YOY. It’s important to note that the size of homes selling in these two periods went down, from 2,150 ft² to 1,737 ft², a 19% decrease, which serves to only magnify the cost to the consumer.
The price per ft² in 2020 was $979 and increased to $1,299 in 2021. It’s typical for the price per square foot to go up when smaller homes are selling, since it does not take into consideration the lot which the homes sit upon.
What is noteworthy is while the size of homes selling in these two periods went down 19%, prices went up 12%—illustrating that for 12% more in 2021, one could only get a 19% smaller home.
The percentage sellers received also went up from 101% of the asking price in 2020 to 112% in 2021, underscoring the strong demand.
Due to the increase in home values, the cost of home ownership, while borrowing money at 3% interest, went up $1,000 per month in just the last year. If interest rates were to rise to just 4%, the median price home in Belmont would cost ~ additional $1,000 per month.
According to Mike Farrell of Wells Fargo, a person wishing to buy the median priced Belmont home with 20% down in 2020 needed to earn ~$225,0000 a year, while in 2021 that rose to $300,000 per year. That’s assuming the borrower has no other debt, such as credit card, car payments or school loans.
For buyers with stock options, puting a larger down payment may be an option to increase their buying power without worrying about needing more income to qualify for a mortgage. But for buyers with traditional salaries—essential workers from Teachers, Police, Firefighters, and hospital workers to grocery store employees, and restaurant workers who, without help from outside wealthy family members, will have little hope of ever buying into the dream of home ownership in the Bay Area.
Unfortunately, we see the same story playing out in San Mateo County as a whole.
The most important take-aways from these numbers are the median home price, which jumped 6% YOY, while the size of homes selling were 2% smaller, and the percentage the seller received of their asking price jumped 6 percentage points from 102% of asking to 108%.
As a direct result of the pandemic, many apartment renters, and condominium owners, found to work from home—and in many cases home school children, they needed more space. Since public gatherings were off the table—they wanted a yard as well as no common areas such as elevators. This created a glut of condominiums on the market.
It goes without saying, that we are in unchartered waters in terms of housing demand. Looking at this data from Case-Shiller®️, as compiled by FRED®, which covers the San Francisco MSA (Metropolitan Statistical Area) comprised of five of the nine Bay Area Counties, one can see the dramatic spike in home values beginning in 2020.
If you have considered selling your home and would like to maximize the proceeds from your sale, please contact us for a no obligation assessment.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and 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, insurance, or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Critical Steps to Financial Planning
Financial planning is an integral part of any successful portfolio.
We don’t pretend to offer financial advice, but we do offer real estate advice and the two often overlap.
For example, every two years a married homeowner filing joint tax returns can sell their primary residence and enjoy the first $500,000 of capital gains tax free. We’d be remise if we didn’t remind those to whom we’ve sold homes about this option to keep more of their equity in their own pocket.
Of course, we realize that most people don’t move every two years just to save on capital gains.
First, homes don’t appreciate that much in two years to realize the savings, and people get entrenched in their neighborhood, while others just love their house and have no plans to move, but failing to plan ahead, could cost one hundreds of thousands of dollars.
When Might One Consider this Option?
If you have lived in your home in the Bay Area for more than five years you’ve probably already surpassed the $500,000 capital gains abatement threshold.
Are you outgrowing your home? With interest rates are still at historically low levels, now might be an ideal time to consider a move up into the space you need.
If you’re retired or near retirement and would like to downsize, selling your home while the market is at record highs might be the time to employ that exit strategy you’ve been considering. Afterall, when the last market correction occurred it took 7 years for the median home price to return to the previous high. Seven years is a long time to postpone retirement just to wait for home prices to rebound to current levels.
Worried about higher property taxes on a larger home? The recently passed Proposition 19 in California just might help mitigate the hit of higher property taxes with the ability to carry your existing low tax base to your replacement property and pay only a small increase if buying a more expensive home.
If you’re downsizing, you can carry your existing tax base without adjustment.
We’re here to help answer any of your questions on how to make a move possible if you choose to do so.
If you have questions about tax implications or estate planning please seek advice from your attorney, CPA or other professional.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
HOMES SALES TANK DURING SHELTER IN PLACE
When Critical Thinking Skills Vanish
We’re not sure what housing market the National Association of Realtors are referring to, but their headlines continue the “glass is half full” mentality which only serves to mislead the public in an effort to bolster their own organization—one which I might add, we are forced to be a part of, for better or for worse.
Take these headlines ripped from the email blasts by NAR just today…
This first one is a classic example. Sight unseen offers are growing from what? From when before the shelter in place order when no buyer in their right mind would buy a home sight unseen?
Then there’s this glass half full headline. All this tells me is that 75% of buyers do NOT accept the virtual buying scenario. And it’s not as if buyers really have a choice right now, so 25% took a leap of faith and dove in to the pool of house hunting no matter what is happening in the world.
What we do not know for certain yet, but soon will find out, is that these buyers are probably taking advantage of desperate sellers, and getting deep discounts on home prices. We’ve been hearing anecdotal stories from our colleagues of prices renegotiated downward immediately following the COVID outbreak.
And lastly, the electronic signature platform Docusign’s CEO pronouncing that they have yet to see a slowdown. Wonder why? Since sales have dropped in San Mateo county by 78% this year compared to last year during the same period, from when the shelter in place order was initiated until today (one month).
Perhaps it’s because today, that is the ONLY way one can sign a contract, when before it was optional?
Here are the facts. In San Mateo County during the period from March 17th until April 17th of this year, during the COVIT 19 shelter in place order, when it became illegal to show an occupied home, sales of single-family homes have dropped 78% over the same period in 2019.
The amount a seller has received from the few sales that have already closed, indicates that sellers are receiving on average 100% of their asking price. Not bad, all things considered, yet that’s a 5% downswing over the same period last year.
Truth be told, it’s too early to measure the damage that the mishandling of the COVID 19 outbreak will inflict upon the housing industry, or the economic health of the U.S. as a whole.
We seem to be getting enough mixed messages from our leaders, and we would hope that the REALTOR trade organizations wouldn’t fall into the same trap, as if our fragile sanity relied upon drinking Kool-Aid from a glass always half full.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
How the 2020 Election Might Hurt Your Home’s Value
One glaring anomaly that occurs in almost all elections cycles—be it presidential or mid-term, is that of a pull-back in consumer spending—specifically in our housing market.
Continue reading2019 Housing Round-Up Let Down
2019 Housing Round-Up
We’re just stepping into the 2020 housing market and it’s too early to tell how the housing it will play out this year. That data typically starts to develop in February-May, as buyers come out of winter hibernation and begin looking at homes in earnest. And with the better weather on the horizon, sellers are more inclined to put their home on the market.
These two forces converge each year to dictate the supply and demand balance, thus determining the strength of the market for sellers, or advantages for buyers. A shortage of supply could continue to drive up values, while a shortage in demand would have just the opposite effect.
We had been indicating this trend may be on the horizon with this very blog back in 2018 with this post about lower returns.
San Mateo County results which provides a more macro-scale, illustrate this.
SAN MATEO COUNTY REPORT
The median home value dropped 1.3 percentage points YOY, which, in and of itself is not an earth-shattering indicator, but the amount sellers received of their asking price is—it dropped 5% YOY.
The leftover inventory of homes for sale at year-end grew 22%, while the number of new listings YOY dropped 6.24% and sales dropped 3.1%. It also took six more days to sell the average home.
BELMONT HOME REPORT
Being a much smaller market sample, the data is less reliable than looking at the entire county, but by examining the entire year—rather than an isolated YOY comparison for each month, the data spikes and troughs tend to somewhat smooth out.
In Belmont, home sales dropped 6.35%, new listings dropped by 10.65%, the percent a seller received down 6%, the median sale price—dropping 4.26%, and the DOM, or time it took to sell a home, up, 30%.
The housing market had a tumultuous end in 2018, and yet comparing the year-end results for 2018 and 2019, we can see that this balance shifted even further away from the unsustainable and feverish seller’s market of the past seven-year bull run, to a more normal, balanced market. We’re seeing the pendulum move from that of a seller’s market, to a more evenly balanced market in full swing.
If you want to know what we believe may very well be in store for us in 2020, read our newest blog post on Election Year Jitters—How it will Effect the Market.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand 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, insurance or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.
Home Sales Slower in 2019
Last year ended with much indecision regarding the future of our local housing market, and since there are typically fewer sales at the beginning of a new year, we thought it prudent to compare the first two months of 2019 to last year at the same time to better understand the state of our current market.
On an empirical note, we’ve sold all of our listings his year at our same pace—11 days on the market, but with fewer offers. All have sold over the asking price, but not for as much as in recent years past.
MEDIAN PRICE
This is always a good indicator of what the rest of the stats might reveal because if prices are down, so too typically is everything else.
2018 Median Home Price $1,697,750
2019 Median Home Price $1,649,000
Change = $48,750 or 3% drop YOY
*NOTE: The size of homes selling in 2018 were on average 9% larger which could indicate an increase in the home prices, not a decrease year-over-year.
HOMES SALES (Units)
2018 20
2019 13
YOY Change = 7 or 54% Decrease in sales in 2019 so far
PERCENT RECEIVED OF THE ASKING PRICE
2018 114
2019 102
YOY Change = 12% Less over asking in 2019
While sales in 2019 to date are slower than 2018, homes are on the market for about the same time—14 days.
And though sellers are taking offers that as a percentage are less over their asking price than in 2018 by a whopping 11%, in real dollars they may be ahead of where we were one year ago.
With the inclement weather, buyers may have perhaps had less motivation or incentive to go out and look at homes, but virtually the same number of new listings came on the market in both years during this period, and thus sales declined so the “Months of Inventory”, or the tine it would take to sell the current inventory at the current rate of sales, has gone up dramatically from .9 months in February of 2018 to 1.3 montsh this year—though still historically very low. If more inventory (homes for sale) develop, prices could see further erosion in home values.
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 25 years of experience in helping sellers and buyers in their community. As Diamond recipients, Drew and Christine are 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.
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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.