Which City Is More Affordable–Belmont or San Carlos

Belmont vs San Carlos Home Values

NOTE: This post is in response you a question posed on the Belmont Patch:

Q.    How does Belmont’s property prices rise compare with nearby San Carlos’ which has the Laurel Street downtown and the industrial area?

A.  To answer this question as posted on the Patch by Gladwyn d’Souza, we had to do compare home sales and price points in Belmont to San Carlos over a period of time to see if any trend appeared.

We chose 2006-2013, which effectively covers the period right before and through our local housing recession and into the recovery.

We’ve spent a week looking at the numbers and trying as best we could to put them into a comprehensive perspective without analysis paralysis setting in.

The short answer is Belmont is lagging the home price appreciation of San Carlos. But there’s a lot more to it than that. If I’m reading into the question correctly, (since we received more than one request for this analysis) essentially people want to find out if having an industrial and downtown area creates more value in the local housing market and if that influences the rate at which homes appreciate—which is a slightly different question than just trying to answer if homes near a downtown cost more—this question includes do homes go up in value at a faster rate than surrounding areas. If I am paraphrasing that incorrectly, I apologize.

Unfortunately, the Patch limits how long we our response to a post can be so we are including this link to our own blog page where we can give the answer justice as well as add the appropriate graphs and documentation. We invite you to join us here for our in-depth answer.

Let’s begin by answering the question do the homes values go up at a faster rate…

We need not involve Belmont for this part of the analysis—not yet. That actually serves to complicate the answer because first we need to know if the homes near downtown San Carlos are indeed going up at a faster rate than homes which are not near downtown. This methodology eliminates  unnecessary variables created by comparing two cities which could unjustly influence the results—issue such as weather, governance, schools, transportation, shopping, etcetera—to name a few.

Our Multiple Listing Service allows us to break down sales by rather arbitrary but effective boundaries. For example we can look at the White Oaks area in San Carlos and compare it to the homes just north of Holly on the Belmont border, or homes which are more sequestered in the San Carlos hills on Crestview.

White Oaks SQFT LOT $/SQFT Median Price Rate of App Size Diff Adjusted Rate $/SQFT

2011

1600

6000

$538

$932,000

2012

1501

6300

$629

$950,000

1.9%

-6.6%

8.5%

16.9%

2013

1775

5760

$759

$1,352,000

42.3%

15.4%

26.9%

20.6%
SCL Hills Rate Size

2011

2175

8058

$498

$998,000

2012

2090

8400

$546

$1,105,000

10.7%

-3.9%

14.6%

9.7%

2013

2170

8300

$629

$1,380,000

24.9%

3.8%

28.7%

15.2%

 

As one can see the raw rate of median home price appreciation is considerably higher in the White Oaks than in the San Carlos Hills. And when we compare the price per square foot we arrive at the same conclusion—that homes near downtown in San Carlos coast more per square foot and are going up at a faster rate. However, the adjusted rate takes into consideration the variation in the size of homes selling in these two areas. We factored that in as best we could—admittedly it’s not a perfect system but, for example, in the White Oaks on 2013 we surmised that if the raw rate of appreciation was 42.3% over the prior year, but the homes were 15.4% larger, then we are not comparing apples to apples. So to be consistent we subtracted this variance from the rate of appreciation for an “adjusted rate”. Normalizing these two variables offers up a much more stable rate of appreciation and probably closer to the actual difference in these two areas—which isn’t much.

Clearly it appears that people are willing to pay more to be closer to a downtown as is evidenced in the Bel-Carlos map below illustrating the price per square foot people are willing to pay. Does that fully answer the question of are homes near downtown selling for more—or appreciating at a higher rate? Certainly not. The reason is complex and two-fold. First, homes in areas which were harder hit by the housing market collapse are enjoying a higher rate of appreciation—counterintuitive perhaps to their respective locations—because they have a greater distance to rebound—in other words, the values dropped further and faster in these areas hence they are rebounding at an inverse rate.

Case in point, the Sterling Downs area of Belmont. Known for its superior microclimate weather, this area is home to many original floor plans  which consisted of a 1,010 Sqft three bedroom 1 bath home. At that size, the price point for these homes was less than surrounding larger Belmont homes and much more affordable to the first-time homebuyer—many of the very homeowners who found themselves in financial trouble when the housing market imploded. In Sterling downs in 2011 there were only 10 sales—two of which were distressed sales. Simply put—many could not afford to sell and take a loss in 2011. In 2012 the number of sales shot up to 19 but eight were distressed sales, while in 2013 a whopping 33 sales were logged and only 1 was a distress sale. It’s easy to see with values plummeting more in Sterling Downs than others areas of Belmont it’s no wonder they are bouncing back at a higher rate. And they just happen to be closer to downtown…

Sterling Downs SQFT Lot $/SQFT Median Price Rate App Size Adjusted $/SQFT Inc.

2011

1469

5387.5

$443

$667,000

2012

1190

5330

$539

$650,000

-2.5%

-23.4%

20.9%

21.6%

2013

1190

5000

$673

$825,000

26.9%

0.0%

26.9%

24.8%
Belmont Heights SQFT Lot $/SQFT Median Price Rate App Size Adjusted $/SQFT Inc.

2011

2500

9639

$515

$1,221,000

2012

2150

9600

$539

$1,121,050

-8.2%

-16.3%

8.1%

4.7%

2013

2480

8990

$613

$1,400,000

24.9%

13.3%

11.6%

13.7%

 

The second factor skewing the results is that homes which are smaller sell for less per square foot.

Is price per square foot the most accurate statistic for analysis to reflect the true picture of an areas worth? Not really, and here’s why. Larger homes sell for less per square foot because land, not factored into the calculation, accounts for more than 50% of a home’s worth. Therefore a relatively small 1,010 square foot home in Sterling downs will sell for more per square foot than one in Belmont Heights (Hallmark Area) which average 2,010 square feet in size, yet the median price is far less in Sterling Downs.

Empirically speaking, we know that people pay a lot of money for very small homes near downtown San Carlos—finding the data to clearly illustrate the phenomenon has proven more difficult.

Now for the bigger question of how does the rate of appreciation in San Carlos compare to that of Belmont’s?

Belmont vs San Carlos Median PriceTrendWhat the numbers illustrate is that San Carlos has a higher median home price than that of its neighbor to the north, Belmont, and as long as we’ve lived here (which is now going on over 21 years) it always has.

 

 

 

 

 

 

 

 

San Carlos Increse over BelWe’ve noticed in both recent market corrections (1989 and 2007), that as the market cools, so does the discrepancy between the two city’s median home price. And when there’s a bull housing market, San Carlos begins to pull away at a higher rate of appreciation. Of course as in nature, a sort of market equilibrium begins to set in when values are too far apart to lessen the disparity in home prices—akin to water filling a void.

 

 

 

 

Here we see that not only do you pay more to live in San Carlos you also get a smaller home for the money. And since the lot sizes in the two areas are relatively similar, larger lot sizes in one area which could affect values can be ignored.

Median Price SQFT %Median∆ %SQFT∆ Adjusted ∆
Belmont 2013

$1,088,000

1840
San Carlos 2013

$1,210,000

1765

10.1%

-4.2%

14.3%

The raw data show that the median home price in San Carlos in 2013 was 10.1% higher than Belmont’s, but since one also gets a home 4.2% smaller we adjusted the true estimated median home price differential to be close to 14.3%. Calculating it another way, if we take the difference in the size of homes selling and multiply it by the price per square foot of San Carlos homes we get an additional $52,000 of appreciation bringing our median home price increase in San Carlos over Belmont closer to 16% for the year.

So it appears that the same home in San Carlos will cost you about 14-16% more–no matter where in San Carlos it is located.  The next question to attempt to answer is why?

Imagine if Belmont and San Carlos had no border? After all, the city borders exist on maps but in reality the imaginary borders are crossed frequently as Belmont and San Carlos residents have unfettered access to their neighboring cities amenities (except at the end of Hallmark Drive and Crestview).

What if we removed the artificial borders and created one large new town called Bel-Carlos, for our analysis. Now it’s just one big happy city with various neighborhoods-like it really is. Because last we checked San Carlos and Belmont offered reciprocity to their neighboring cities for access to shopping, restaurants and parks—you name it. Would a person really choose to live in San Carlos and pay more just to enjoy the distinction that their city had a downtown? After all, they could live a few blocks north and get to the same restaurants and stores?

We think that the proximity to the downtown is more attractive than the mere fact that one exists. To illustrate this we see that the values near downtown in San Carlos (price per square foot) are greater than neighborhoods further away—in San Carlos and Belmont.

Bel Carlos Map

In this map we combined San Carlos and Belmont to create a borderless “Bel-Carlos” and then we used data since 2007 in each area to examine the price per square foot which homes sold for.  In almost each case San Carlos homes cost per square foot exceeded that of Belmont’s in the neighborhoods we examined.

Now in our new city, Bel-Carlos we have the same distinction. Some neighborhoods in Bel-Carlos are more expensive (per square foot) than others. Offering walking distance to Bel-Carlos’ fine dining fetches a higher price per square foot than neighborhoods further away.

Overall, the home values in San Carlos are higher and go up at a faster rate than those of her neighboring city of Belmont. Is it that San Carlos has a larger downtown with many fine restaurants, the warmer weather, shopping opportunities, community involvement or the city governance? It’s most likely all of the above. That said, there are many who choose Belmont for the beauty of the hills, proximity to major commute arteries, and the cooler mountain air.

Whichever city you choose you call home, we’re here to help.

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 email 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.

 

Belmont Home Sales Smash Records! December 2013 Market Report

Welcome to our Belmont home sales year-end report. In Part I we close out December’s sales, and in Part II we recap the year and the look deep into our crystal ball for what may be in store for the housing market in 2014.

PART I

Let’s start with December sales:

December was a strong month for Belmont home sales, as winter home sales go. We contrast these sales to the same time last year to avoid any seasonal anomalies.

Belmont December 2013

SALES

Belmont had 18 home sales in December—one less than last year and five more than 2011.

MONTHS of INVENTORY

At the current rate of sales, compared to the existing inventory and new listings, the time it would take to sell all of the homes in Belmont dropped to an astonishing low of .28 months—that’s a little over a week of inventory. To help put that number in perspective, San Mateo County is running at 2.2 months and the country as a whole is at around five months.

Which part of the equation changed since last year? The number of new listings year-over-year was unchanged and sales were relatively unchanged but the inventory level was already at only five homes for sale going into December this year as compared to 12 last year so the appearance in the rate in which inventory was depleted was exacerbated.

MEDIAN HOME PRICE

The median home price rose to $1,086,000—a 16% increase over last December and essentially unchanged from the prior month. What did change is that in 2012, for $939,000 one could get a 2,150 square foot home while this year, at the new median home price of $1,086,000, one could purchase a home only 1,625 square feet in size. So for 15% more, buyers in 2013 bought homes that were 32% smaller than in 2012.

DOM (Days on the market)

In 2012 it took 54 days to sell the homes that closed in December while this year that number dropped to only 19.

Hot Pepper 25PERCENT OF ASKING

And now we get to the Sizzle Factor—what percent homes are selling of the asking price. It’s a great measurement of just how hot the Belmont housing market really is.

In December of 2012 Belmont homes were selling for 98.83% of the seller’s asking price. This December Sellers grossed 107.6% of their asking price. At a median home price of $1,086,000 that delta is huge! It represents sellers netting on average $95,000 more for their home in 2013.

PRICE REDUCTIONS

In 2012 42% of the listings that sold had price reductions of on average $158,000, while in 2013 only one lone seller had to lower their initial asking price by $30,000.

In 2012 58% of the homes sold for an average of $44,000 under the seller’s asking price and 37% sold for on average $37,000 more.

In 2013 83% of the sellers received on average $99,000 over their initial asking price while only two sellers settled for on average $12,500 less.

In Part II we’ll take a look at Peninsula home values on a more macro level and discuss what may be in store for 2014.

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441.

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 Values Set a New Record – November 2013 Sales

We hope that your holiday is filled with great times and fun with family or friends!

This is our last market update for the year as December’s won’t roll out until mid-January. That’s where we re-cap the entire year and take our best guess as to what’s  in store for our market in 2014.

We hope you’ve enjoyed this year’s market updates. Belmont has seen some amazing appreciation this year and November was certainly not a spoiler.

Click on the image for a larger view.
Click on the image for a larger view.

SALES

The seasonal slowdown has thus far not materialized. Belmont had 40% more sales this November than in 2012—25 compared to only 14 last year. That might seem staggering but as it turns out last November of 2012 was a bit of an anomaly in that very few homes sold when historic sales trends are reviewed.

MEDIAN PRICE

The big deal once again is the median price. Since virtually the same size homes sold last November in Belmont as did this year, the median price increase this year more-or-less accurately reflects the increase in Belmont home values. Last November the median home price stood at $901,500 while this year we hit $1,089,000—a 21% increase. But most important is that this is not a blip on the radar screen. Belmont homes values set a new record as except for April, Belmont has posted million dollar plus median home prices the entire year—a first in the history of Belmont.

Have the values surpassed those at the peak of our market? Undeniably—for Belmont.

DOM (Days on Market)

The time it took to sell a home was essentially unchanged at 23 days as compare to 27 days last year.

NEW LISTINGS

Interestingly enough we had 15 new listings hit the market in November this year. The warmer than usual weather might have had something to do with it but that represents a 50% increase over last year.

MONTHS OF INVENTORY

The time it would take to sell the existing home inventory at the current monthly rate of sales hit another low at 0.5 months. To help put the low inventory into perspective, nationally, that number still stands at around five months.

Hot Pepper 25PERCENT RECEIVED—THE SIZZLE FACTOR

Still holding at over 100% of asking, November did not disappoint as Belmont sellers enjoyed on average 107% of their asking price.  Some of you may have noticed that this number does not jive with the chart above. That’s because we calculate the percent received in our chart as a percentage the seller received of their ORIGINAL asking price, not the reduced price. The Multiple Listing Service tracks it as a percent of the price when the home sold, and that methodology accounts for the difference between our number of 103% of asking and the 107% reported. Either way, it’s a big number.

PRICE REDUCTIONS

There were more price reductions than normal this November. 20% of the sellers lowered their asking price while 16% received under what they were asking for their home. Still, 68% received more. But those numbers are just a tad bit less impressive than last November which could be rationalized because sellers are getting more aggressive in their initial pricing and thus are having to lower their expectations down the road in terms of a price improvement.

As always if you have any questions about our report you are welcome to reply to this post or email us at info@morganhomes.com or call at 650-508-1441.

And if you are considering a move in 2014, please take a moment to reach out to us. Well show you why year in and year out we have the best record for selling homes in Belmont.

Have a great Holiday and Happy New 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.

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 – Are We Headed for a Cool Down or Not?

Like a marathon finish before the New Year, Belmont’s home sales hung in there for at least one more month as October’s home sale statistics showed little signs of distress.

It’s actually amazing for us to see just how strong the market is going into what is typically a seasonal slowdown period.

In order to make any sense of Belmont’s housing statistics, we look at year-over-year numbers rather than month-to-month changes which are often influenced by seasonal factors.

Belmont Home Sale Activity-October 2013

SALES

The sales for October were virtually unchanged from last year when 23 homes sold in 2012 and 24 in 2013.

How’s the Inventory?

That’s all the buzz with agents complaining daily about no housing inventory.

 

There are three factors to look at when thinking about the inventory level.

  • The number of new listings
  • The number of sales
  • And the overall inventory level

The number of new listings this October went from 14 in 2012 to 17, the number of sales were up this year by one, yet the overall inventory dropped from 32 to 24 this October.

In October of 2013 the number of available homes for sale was 32, while this year that number dropped to only 24. That brought down the “Months of Inventory” statistic which measure the time (in months) that it would take to sell all of the existing homes on the market at the current rate of sales. Nationwide, that number is still around five months of inventory.

Belmont dropped from 1.39 months last October to 1.04 this year.

With sales staying relatively static, and new listings increasing in 2013, why then does the months of inventory counterintuitively shrink rather than grow?

The answer lies in the number of leftover homes from the previous month which linger on the market. Last year the market was strong, but not as hot as this year, so some of the September homes for sale last year managed to spill over into October causing the overall inventory to increase.

MEDIAN PRICE

The median price this October recorded at $1,135,000 which may have been a seasonal drop from August 2013 when it stood at a record high of $1,239,000, but an increase year-over-year of 16.1% when last October the median price was only $977,500. In both periods the size homes which sold were relatively unchanged at 2,037 Sq. in 2012 to 2,060 Sq. in 2013.

PERCENT RECEIVED—THE SIZZLE FACTOR Hot Pepper 25

So how hot is the market? Just last month we were seeing some signs of a cool fall market but October’s number appear to have staved off the winter housing chill for at least one more month. Could it be the warmer than usual fall we are enjoying? Perhaps. In any case, this October 20 of the homes or 83% sold over the seller’s asking price, while one home sold at asking and only two sold for less.

Last October only 35% of the homes sold over the asking price, two sold at asking and 22% sold for less.

The percent sellers received of their asking price were 100.3 vs. 108.5 in 2013. Hotter than last year, and hotter than last month when the sellers received 106% of asking.

 

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.

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.

Case-Shiller Bay Area Home Price Index Increases Again

Case-Shiller released their home price indices for August 2013 this week which showed continued year-over-year price increases in all 20 cities while thirteen cities posted double-digit annual gains. The data showed that the 10-City and 20-City Composites increased 12.8% year-over-year.

The annual growth rates accelerated for both Composites and 14 cities.

The Bay Area continues to show month-over-month price increases and year-over-year gains, though current indications are the rate of gains may be slowing. Prices in San Francisco increased 0.9 percent in August, down from a 2.2 percent monthly increase in July.

That stands to reason since homes values dipped below where they should have been during the recession and rebounded like a rubber band being stretched too far and released—at some point all of the pent up energy begins to dissipate.

We suspect that, all things remaining relatively similar as they are today, next spring will see strong home price increases in the spring which will should taper off to moderate by summer. After all, at some point the government will stop buying the 85 billion dollars per month of bonds which helps to keep interestRed arrow rates artificially low. We of course cannot predict when that will happen, but when it does, the homeowners which will have enjoyed unprecedentedly low interest rates will be reticent to move—and that will be a defining chapter in the next new market…

But the cycle is nothing new. Having analyzed our local market for over 20 years there’s a distinct pattern. In a strong housing cycle, home prices rise fastest each spring and begin to wane after summer with winter being the slowest period for price growth and sales.

The brouhaha about home values having peaked just because July showed a slowdown in the rate of home appreciation is premature and a misinterpretation of the statistics, in our opinion.

It’s easy when listening to ten second radio sound bites during your ride home to buy into the attention grabbing headline saying home prices are falling, when what they meant to say is the rate at which home prices are increasing has slowed—as well as they should.

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.

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.

Should a Seller Disclose if Their House is Haunted?

Should a Seller Disclose if They Believe Their House is Haunted?Attorney's

Interestingly, this actually appeared in a case Stambovsky v Ackley which was brought before the New York Supreme Court in 1990 and later overturned by the Supreme Court Appellate division in 1991.

Facts of the case were that the seller had promoted their home to the community and in national magazines as being haunted, yet failed to make that questionable fact known to the buyer.

Upon learning of this ominous condition, the buyer asked for rescission of the contact and their deposit returned. The Supreme Court disagreed, yet was reversed by the appellate court a year later.

While the various factions tried to wrangle with the idea of whether or not a seller is liable to disclose something which cannot be proven exists, the courts found a way to do what science could not—claim the house was haunted with this finding, “Whether the source of the spectral apparitions seen by defendant seller are parapsychic or psychogenic, having reported their presence in both a national publication (Readers’ Digest) and the local press (in 1977 and 1982, respectively), defendant is estopped to deny their existence and, as a matter of law, the house is haunted.”

With wit and a bit of spiritual humor the judges explained their reasoning:

“…a very practical problem arises with respect to the discovery of a paranormal phenomenon: “Who you gonna’ call?” as a title song to the movie “Ghostbusters” asks.”

“…It portends that the prudent attorney will establish an escrow account lest the subject of the transaction come back to haunt him. In the interest of avoiding such untenable consequences, the notion that a haunting is a condition which can and should be ascertained upon reasonable inspection of the premises is a hobgoblin which should be exorcised from the body of legal precedent and laid quietly to rest.”

So if when selling your home you find yourself frightened of how much you need to disclose, this case may just spook you into disclosing more ghastly details, rather than less.

Happy Halloween!

You can read the full case here…

What is a Relative Bid in Real Estate?

Relative Bid Offers–Safe or Insane?

Among other tactics used in multiple offer situations, is the use of relative bids, also referred to with somewhat of a negative connotation as “Sharp Bids”. This tactic is sometimes Frequently Unasked Questionsemployed in purchase agreements for real estate when competing buyers are vying for a property.

Here’s how a relative bid might work. A buyer wishing to avail themselves of this tactic should prepare their offer with an initial stated offer price, and a caveat that their offer shall be “X” amount higher than the highest verifiable offer up to the buyer’s desired price cap—the highest the buyer would be willing to go in a worst case scenario. That’s the correct way to prepare a relative bid—a baseline, the overbid, and a cap.

What are some of the advantages and disadvantages of relative bids?

The main disadvantage is that most real estate agents do not know how to handle relative bids and/or write them for their clients. In fact, one of the largest reals estate companies in the Bay Area disallows their agents from employing or even entertaining this type of bid for fear they might muck it up and end up in a lawsuit.

To us, that’s throwing the baby out with the bathwater.

One specious argument against relative bid offers is that your relative bid may place you at an offer price above an inferior offer, perhaps rife with contingencies. A logical and practical rebuttal to this is that sellers use inferior offers all of the time to counter lower price offers with superior terms to match higher price offers which they have no intention of accepting.

The advantage for a buyer is they are no longer bidding blindly against themselves. Say for example a home is listed for $900,000 and there are 17 competing offers, as there were for a home we recently listed in Redwood City. Buyers have no real idea how high to bid to secure the property and in many cases bid far higher than the next closest bidder—effectively bidding against themselves.

A relative bid allows them to offer a specific amount higher than the highest offer and have control over how much they over bid in a multiple offer situation—but only if it’s done properly.

Is it legal? Absolutely. In fact another large company (with whom we have previously worked) in the South Bay actually recommends to their agents that they make the option of a relative bid known to their buyers to avert a claim of a lapse in the agent’s fiduciary duty—by not explaining all potential bidding options to one’s client.

For a seller the advantage is that they may get a higher price than they would have should they choose to invoke the relative bid offer, since typically relative bid caps are the buyers “best and highest” price they would possibly entertain—their worst case scenario if you will.

As a seller and a buyer, wouldn’t you want to know that you have all the tools available to you when buying or selling a home? At RE/MAX, we are not only allowed to accept and write relative bid offers, we have used them to our advantage in several strategic and crucial situations—much to the satisfaction of our prevailing clients.

 

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience helping sellers and buyers in their community. They may be reached at (650) 508.1441.
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.

 

 

 

 

October’s Hunter’s Moon 2013

This week marks the occasion of the “Hunter’s Moon. A full moon which occurs each October after September’s Harvest Moon.

This can be found on NASA’s web site. According to folklore, October’s full moon is called the “Hunter’s Moon” or sometimes the “Blood Moon.” It gets its name from hunters who tracked and killed their prey by autumn moonlight, stockpiling food for the winter ahead. You can picture them: silent figures padding through the forest, the moon overhead, pale as a corpse, its cold light betraying the creatures of the wood.

So how many moons do we really have? Twelve to be exact:october-2013-partial-lunar-eclipse_72598_990x742

  • January – Wolf Moon 
  • February – Snow Moon 
  • March – Worm Moon 
  • April – Pink Moon 
  • May – Flower Moon 
  • June – Strawberry Moon 
  • July – Buck Moon 
  • August – Sturgeon Moon 
  • September – Harvest Moon 
  • October – Hunter’s Moon 
  • November – Beaver Moon 
  • December – Cold Moon

Ever wonder why the moon appears so large at the horizon and so small up in the sky? This phenomenon referred to the “Moon Illusion” is best explained by scientists but it has everything to do with your brain’s perception of relative size as it compares the moon to objects on the horizon. Try taking a picture of the same moon and you’ll be sorely disappointed that your camera doesn’t see things quite the way you do.

Enjoy the show this week and as the moon rises near sunset and appears to fill the sky.october-2013-partial-lunar-eclipse_72598_990x742

Housing Market Shows Signs of A Cool Fall

Have you heard rumblings that our local housing market which has been racing away like a runaway train is beginning to run out of steam, or are you in the camp that there’s still no light at the end of the appreciation tunnel?

Clearly some Belmont sellers are being lulled into believing that our housing market is just as strong as during the spring. We personally encountered two sellers last week who defied all logic and refused to sell their homes unless they received considerably over their asking price. Neither seller has since sold their home.

If a seller markets their home and receives ten offers, it’s pretty safe to say that at least the day they sold their home, they got as much as they probably could. Of course there are variables such as how well their agent handles the negotiations, but absent the variables, the highest price pretty much sets the high water mark for the home’s value on that day.

Assuming that the high bidder is the winner (they aren’t always), if an identical home were to pop on the market a week later should that seller receive more or less than his lucky neighbor down the street? Since the highest bidder now owns a home, the second seller is left with the next highest offer buyers. The question becomes will one of those buyers be kicking themselves enough to pay even more than the last home they just lost?

It appears some Belmont sellers believe that the market owes them as much or more than the last sale. Unfortunately, it doesn’t work that way. The buyer’s determine the value not, the sellers or their agents.

The fall has brought with it a chill in the air which has cooled the superheated housing market seen earlier this year. Most of our evidence is empirical, but ironically the numbers don’t necessarily bear that out. So why do we feel the market has cooled? We are part of a Mastermind group of top producing REALTORS who gather monthly to discuss market trends and best practices. At our most recent meeting on October 17th there was a consensus from our think tank colleagues who are scattered all up and down the Peninsula that indeed the number of bidders is waning. Being in the trenches gives us a unique perspective about  multiple offer situations. Of course this begs the question, is it a seasonal adjustment or is the wind of appreciation beginning to change?

Belmont Home Sales October 2013

SALES

Home sales in Belmont for the month of September 2013 were brisk with 18 sales—just one fewer than last year at this time.

NEW LISTINGS

Last year there were 25 new listing in September as opposed to the 36 new listings which harkens back to the traditionally higher spring listing levels.

INVENTORY

Overall, inventory of homes for sale were still lower than in 2012 with only 33 homes on the market, but with the influx of new listings in September, the Months of inventory increased to 1.83 up from .73 just a month earlier—still lower than the 1.95 a year ago.

MEDIAN HOME PRICE

The median home price increased year-over-year once again from $938,000 in 2012 to $1,210,000 in 2013—a 29% increase, with the size homes selling during the two periods also increasing 22% and inflating the delta.

Days on Market [DOM]

The average time it took to sell the homes which sold in September was 13 days this year, as compared to 28 last year. This is not to be confused with the average DOM for all of the homes which are not selling—that number stands at 34.

PERCENT RECEIVED

Belmont sellers received on average 105.75% of their asking price—besting the 101.98 a year ago but far shy of the 109.5 which seller’s received just last month.

This year, 78% of the homes sold for over the seller’s asking price—up from 58% a year ago, while only 11% received under their asking price, as opposed to last year when 32 percent received less.

Has the market cooled? Certainly. Is it a seasonal adjustment or a foretelling of a market to come? Visit our blog page next week when we will look at the seasonal price and sales trends in more depth.

Disclaimer:
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience helping sellers and buyers in their community. They may be reached at (650) 508.1441.
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.

Multiple Offers and How to Win the Housing Bidding War

Multiple Offers and How to Win the War

With increasing bidding wars in real estate, bidding on a home in the Bay Area can be a challenge at best with exceedingly frustrating closer to the norm. It’s reminiscent of the ugly Cabbage Patch Doll fights that broke out in department stores in the early 1980’s where there were more parents head hunting Cabbage Patch Dolls for Christmas than the stores could produce—one of the more shallow behavioral moments in our nation’s history.

We recently sold a home in Belmont which we listed at $900,000. We received four offers the first week. The seller chose to accept the highest non-contingent offer—not the highest offer. There was a higher offer at $1,003,000 which they did not entertain due to an inspection contingency. Last year when another agent had this home listed for sale, the sellers had two buyers rescind their deals and the sellers wanted to avoid that frustration again. They decided they were willing to accept $27,000 less for their home for the peace of mind of knowing they had a sure deal.

We think they made the right decision. Because it’s not just peace of mind they were getting, they were also getting $76,000 over their asking price—more-or-less a sure thing. Had they opted to roll the dice and the higher offer rescinded, to resurrect the $976,000 offer a second time around would be difficult. In all likelihood they would be relegated to an offer down around their initial $900,000 list price. Gambling on $27,000 when they stood to lose $76,000 just didn’t make send to them—or us either.

Last September, with multiple offers well established as the norm, we wrote an article for our blog site discussing the pitfalls of contingencies in an offer. In the last year nothing has changed except we have more empirical evidence that contingent offers often lose in a multiple offer situation, and sellers get less for their home if they have to re-market the property.

Now if your parents won’t help you with the down payment unless you promise to include a contingency, there are alternatives but they relegate you to homes where nobody else is bidding—which also means they are overpriced. Better to explain to Mom and Dad that the market has changed since they bought their last home.

So here’s the lesson about contingencies—think about it—in the above scenario, the high bidder had to make their offer $27,000 more and as it turns out it cost them the home as the seller didn’t take their offer. So how much does a contingency in an offer cost? Would the seller have accepted a contingent offer $50,000 or more above the next highest offer?

NOTE: We’re aware that many agents admonish their clients to not forgo contingencies and the genesis of their fear is to insulate them from any possible repercussions after the sale. The California Association of REALTORS recently held a seminar with the top CAR attorneys discussing exactly how to write non-contingent offers since the standard of practice in our area has evolved to embraced such practices.

Disclaimer:
Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience helping sellers and buyers in their community. They may be reached at (650) 508.1441.
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.