Housing Market Cooling Down?

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

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

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

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

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

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

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

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

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

APRIL 2014

 

[click on the picture for a larger view]

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

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

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

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

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

Disclaimer:

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

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

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

 

 

 

Belmont Home Prices Crazy

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

High Mark - Blog

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

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

SALES

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

Why?

INVENTORY

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

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

MEDIAN PRICE

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

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

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

PERCENT RECEIVED

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

DAYS ON THE MARKET [DOM]

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

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

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

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

Disclaimer:

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

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

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

Belmont Home Sales Off To A Frenetic Start

 

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

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

Belmont February 2014

SALES

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

[click on the image for a larger picture]

NEW LISTINGS

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

INVENTORY

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

DAYS ON THE MARKET (DOM)

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

PERCENT RECEIVED

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

MONTHS OF INVENTORY

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

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

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

WRAP-UP

SELLERS—

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

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

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

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

Disclaimer:

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

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

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

Can San Carlos Housing Market Withstand The Heat?

What is happening to the San Carlos housing market?

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

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

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

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

Rosewood

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

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

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

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

 

Disclaimer:

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

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

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

 

 

Belmont Home Values–Are They Sustainable in 2014?

Belmont Home Values for 2013–A Market Re-Cap

This year-end summary is where we bring you the re-cap for Belmont Home Sales. To say the least, Belmont sellers had a good year. After watching their home values drop for five years in a row (until 2011), they finally enjoyed some relief in 2012 and in 2013 as Belmont home prices reached a new high never seen before.

Here’s how it all stacked up.

This graph shows the median price in Belmont from 2012 through 2013. Many postulate about whether the market has returned to its previous high. To answer that, we looked at the median home trend in Belmont going back to 1998. Belmont’s median home price was over the million dollar mark for every month last year—save March. The closest we came to that was back in 2007 when we hit a period over the million dollar mark only twice. In many areas of the east bay and the country as a whole, they are still shy of the highs seen in 2006.

Belmont Median Price Trend 1012-2013

MEDIAN HOME PRICE

The median home price in Belmont last year, as reported by the Multiple Listing Service [MLS] in aggregate form, was up 19.5% from $949,230 in 2012 to $1,133,917 in 2013.  But not all areas fared the same.

 

 

 

 

 

 

This map show which areas of Belmont increased more year-over-year than others. If this seems odd to you, read the post we did on Which City is More Affordable—Belmont or San Carlos where we discuss some of the idiosyncrasies that have an effect on micro-regional values.

Belmont 2013 areas median Adjusted

 

If you’re like us and you are wondering why some areas of Belmont saw so much more appreciation than others, we took another step and looked into the size of homes selling in the respective areas during the two periods to see if that could account for the variance.

The red percent displayed on the map is the raw median price reported by the MLS and the blue percent is an adjusted percentage taking into consideration that either smaller or larger homes sold in the two periods.

These are our findings:

 

Areas

2012

2013

Variance

Raw Increase

Adjusted
Hallmark

2150

2280

6%

30%

24%
Skymont

2020

1830

-9%

20%

29%
Belmont CC

1840

1870

2%

15%

13%
Carlmont

1800

2029

13%

40%

27%
Sterling Downs

1190

1220

3%

27%

24%

 

This of course would indicate a raw median home price in Belmont of 26% and an adjusted one of 23.5%–much closer to the numbers reported in aggregate form from the MLS.

INVENTORY

The big brouhaha last year was over the lack of inventory. There were only seven fewer homes listed for sale in 2013 but 23 more sales than in 2012. Of course, this created fewer homes for buyers to choose from, which then led to bidding competition and prices going up at exponential rates.

DOM (Days on the Market)

The time it took to sell a home in Belmont last year almost dropped in half from 2012—from 37 to only 21 days.

PERCENT RECEIVED OF ASKING

The “Sizzle Factor”, or “How Hot Is the Market?” reached a new high with the average Belmont home seller receiving 108% of their asking price compared to 102% in 2012.

What can we expect in 2013? Probably more of the same. The median home price rate of appreciation should slow, as many homes which were under market value have regained much of their lost appreciation. We’d take a guess that appreciation will be closer to 14%-16% on average for Belmont—down about 5% from what we will imagine was the height of appreciation increases in 2013—we’ll see.

The factors to watch which could alter this trend will be the waning bond purchases by the FED which will serve to raise interest rates and may take away the ability for buyers to bid so much over the asking price in the latter part of 2014.

This begs the initial question of are these homes values sustainable and the answer is that depends. If the economy continues to improve and the rate of appreciation slows, than the short answer is yes—for now. But recent developments in China’s economy could have an impact on the rate of future appreciation and the U.S. economic rebound. Remember, what started the whole Bay Area recovery was jobs. If that changes, the game we know today could be over very soon.

 

Disclaimer:

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

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

 

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.