Median Bay Area Home Price Near Worthless

What You Hear About Median Home Values May Be Completely Wrong

The Multiple Listing Service for the Bay Area peninsula has launched the December sales stats and there is some compelling evidence that Bay Area homes values dropped slightly over 2006.

The median home price is the midpoint at which half of the homes sold for more, and half sold for less. Of course if smaller or larger homes are selling then these numbers are easily skewed—especially with a small market sample.

SMC 2007San Mateo County posted a reduction in the median home price to $885,000–a $40,000 (4.3%) decline over $925,000 in 2006.

This statistic could be wildly inaccurate though. Simply put, there’s no easy way to determine if the size homes which sold in a given year were larger or smaller than a previous year’s. Intuitively, given a large sample–totaling all sales for San Mateo County for example, one would expect the median size home to remain relatively constant and thus portray an accurate picture of the median home values. But unique market forces such as the ones we are currently experiencing are just the sort of thing that could skew those numbers. If for example, more first-time buyers purchased homes, the median size home included in the sales calculations would undoubtedly be smaller and thus skew the median price lower.

The Multiple Listing Service (or MLS system) which essentially retains all agent related transactions has its own inherent flaws. They derive the median home value by taking the median price for every home sold in a given year. If the housing market has a dramatic shift during the course of the year, it’s entirely possible that the median home price reported has nothing to do with the home values at the end of the year on December 31st.  In other words, it matters not whether home values climb for the first quarter of 2007, if in December they’ve dropped dramatically. The MLS median price is more a measurement of the average median value rather than the true median price at the end of the year.

Last year was a prime example of why reporting the median home price in this fashion is erroneous at best. In Belmont for example, there were 94 sales in the first six months of 2006 and 92 in 2007–virtually unchanged. However, the next six months after the July mortgage issues came to light, there were only 127 sales in 2007 compared to 167 in 2006. It’s a strong indication that the market changed in the second part of the year and why measuring the median values at the end of the year, rather than reporting the aggregate is a methodology more suited to a changing market.

In a small market sample such as the town we live in, Belmont, Ca, it’s even more imperative that one adjust for the median size of homes which sold. We incorporate this onto our calculations and low and behold an entirely different picture emerges.

Belmont Real Estate-December Sales 2007

December 2007 Belmont Market Report:

All_bel_dec_sales_2

↑Belmont ended the year with 17 sales in December as compared to 14 in 2006 and off the high of 25 in 2005.

That’s a glimpse the local market may be settling down.

↑Of those 17 sales, eight sold over the seller’s asking price, two sold at asking and seven homes sold under asking. We indicate this to be positive since it underscores the market is still healthy in certain segments.

The average time it took to sell a home was 39 days. Of the homes which sold over asking they took only 18 days to sell and on average sold for 3.61% over what the seller was asking. Seller’s which received their asking price took on average 40 days to sell their home and homes which sold under the asking price averaged 56 days on the market and sold for 5.26% less than their original asking price. Clearly, pricing a home correctly remains a crucial factor in getting the most for a home.

New_listings_in_belmont_2005_to_200↓Inventory remains higher than usual for this time of year.

One of the factors which helped keep inventory levels in check was the paltry number of new listings to choose from in the spring and summer.

Grand Jury Gives Carlmont High School a Lesson in Enrollment

The Civil Grand Jury directed Carlmont High Scholl to clarify its own open-enrollment program and limit the number of students who can transfer, increase capacity, or change school boundaries. School_stairs

Carlmont is over its official capacity of 2,100 students. Administrators say the district’s use of open enrollment – which allows students to choose a school outside the one designated by attendance boundaries – along with the popularity of Carlmont has caused the shift.

Superintendent Pat Gemma said for starters, the district plans to allow only about 80 open enrollment transfers to Carlmont for the freshman class that will start next fall, compared to about 220 transfers that were let in this fall.

Students with siblings at the school will get the highest priority, followed by those who chose Carlmont after making a documented effort to educate themselves on the options. ""There’s no question in my mind nor the mind of the principal at Carlmont that 2,300 students at Carlmont is too many," Gemma said.

With that in mind is seem unlikely that Carlmont will be choosing the option of increasing capacity, and will likely be forced to move school boundaries. Currently, any eligible Belmont resident can go to Carlmont High while only certain parts of San Carlos may attend providing they are within the designated school boundaries. The third option has been to apply for an intra-district transfer to Carlmont.

This dilemma could have an impact on housing values as buyers are apparently more inclined to pay extra to live within the Calrmont School boundaries. The folks who bought in San Carlos thinking they were well within the Carlmont High School boundaries may find out that everything has changed—including what someone will pay to live there.

Which Way is the Wind Blowing in Belmont?

WHICH WAY IS THE WIND BLOWING IN BELMONT?

Belmont Hallmark View

There are a many hot topics in Belmont that can cause the debate around water coolers to boil over, though normally our weather isn’t one of them. Being nestled between the Pacific Ocean and the San Francisco Bay keeps the weather in Belmont relatively cool in the hot summer months and mild the rest of the year.

But what about the so-called microclimates we hear so much about? Having personally lived in three distinct neighborhoods in Belmont we noticed each one benefited from individualistic weather nuances.

If one were to drive around Belmont in a convertible, on a motorbike or bicycle on a summer day they’d no doubt experience dramatic variations in temperature from one neighborhood to another; for those who live and work in Belmont it comes as no surprise to find the temperature in one part of Belmont completely different from another. These so called “microclimates” exist all over the Peninsula but in some cities such as Belmont, they are found within the city itself.

Back in the day before air-conditioning, choosing a mild climate was key to comfortable summers. In the 1860’s, William Chapman Ralston picked a strategic place in Belmont to call home when he bought Count Cipriani’s chateau on what is now Ralston Avenue. Located near the bustling downtown section of Belmont, yet secluded inland far enough to be protected from the cooler San Francisco Bay winds, this area today remains known for its superior microclimate.

Other microclimates can be found elsewhere in Belmont such as in the hills overlooking the bay. These higher elevations are affected two fold; by more exposure to the wind and their inherent altitude. Also referred to as the “lapse rate”-for every 1,000 feet in elevation, temperatures are around 3.5 degrees lower. So it stands to reason that a home up in Belcrest Gardens or Belmont Heights near Highway 92 would be slightly cooler than a home in Sterling Downs. It’s not just elevation which accounts for the differential in temperatures. Microclimates created by the shelter of a hillside, ravine or eastern exposure can provide a protected environment free from cool afternoon winds which can drop temperatures as much as 20 degrees in the course of just a few hours.

The temperature in Belmont peaks most days in the afternoon and has cooled considerably by early evening. Want to know what time of day is typically the warmest? On average it’s 2:10 in the afternoon.

Belmont is a city with mild seasons and is ideally situated between Silicon Valley and San Francisco with easy access to three international airports. Once you’ve found Belmont, you’ve found home!

 

weatherstation_pic*Our NOAA registered weather station is located at our home in Belmont and provides real-time weather reports. You can find our Belmont Weather station by clicking here!

 

 

 

 

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.

© D. Morgan, 2007