Housing Stall in 2018 Has Homebuyers on Fence

Wouldn’t it be nice if all market stalls were this pretty?

Welcome to our world, where the new question du jour is “Is there a market crash on the horizon?”, or some equally broad request eliciting a prognostication beyond our worldly abilities. We say, “define horizon?”

Market Stall
Market Stall

In 2017 there was little discussion about the Peninsula housing market and its sustainability. Yet since June of 2018, it’s what everyone seems to be talking about. So, we want to know, what’s really going on?

It never ceases to amaze us how short term the memory is for so many buyers and many agents. We did a blog post in May of 2016 and again in July, about the stall in the market back then. Of course, that too was an election year, and that post is as relevant today as it was back then. Right when everyone thought the sky was falling, after the election and inauguration,  the housing market rebounded to where it had left off, bringing on more misery for buyers as multiple offers once again ensued.

But will that happen again? Will the forces of higher interest rates coupled with fewer tax deduction incentives cause a permanent slowdown in the housing market even after the mid-term elections?

We measured the time period between August 1stthrough October 1st to get an accurate read on the current market conditions.

In Belmont, there were 59 new listings in 2017. This year during the same duration there have been three less—at 56. And although we’re hearing buyers and even some agents espouse how many more new listings there are, there are actually fewer in the same period.

In San Mateo, looking a price reductions during this same period, in the Presidential election year of 2016, 24% of sellers lowered their asking price. In 2017 only 9.8% of sellers had to lower their initial asking price, and so far this year, another election year, 26% of sellers have lowered their asking price.

What is changing is the rate of absorption—or how many homes are selling. The Months of Inventory is a measurement of how long it would take to sell the current inventory of homes at the current pace of sales. Nationwide, this number typically stands around 6 months. In Belmont, that number has been below 1 month for most of the year, with a striking anomaly. The inventory stands at 1.3 months now, the same as it was in 2016 & 2017 during the same seasonal window.

In Belmont, during the same period in 2016-2018 the number of homes sales went from 33 in the presidential election year of 2016, to 43 last year in 2017, to 35 this year in the run up to the mid-term elections. That’s a decrease in sales of ~19% YOY, and that’s what is causing higher inventory levels—not the number of new listings.

On a more macro level, home sales in San Mateo County as a whole went from 752 units sold in 2016, to 734 in 2017 and this year 681 sales—an increased slow down each year-over-year.

How are seller’s weathering the storm? In 2017 Belmont homes sellers were receiving on average 112% of their asking price. That number dropped to 110% this year during the same period.

While in 2017, of the sellers who had to lower their asking price, they averaged a downward adjustment of only $89,000, this year that adjustment increased to $190,000—another sign of weakening demand.

How did the prices hold up overall during these two periods?

In 2017 the median price for a home in Belmont averaged $1,660,000 for these two months, while this year they averaged $1,821,000—indicating a 9.7% median home price increase YOY in Belmont.

What’s the take-away?

  • Home prices have begun to top out as fewer and fewer buyers can afford the median home price.
  • Government intervention in limiting the property tax deduction to only $10,000 per year and capping the mortgage interest deduction to the first $750,000 has a direct bearing on peninsula home values as the average cost to homeowners will now far exceed both of these caps.
  • Interest rates continue to creep up which will only further compound the ability of buyers to qualify for a Peninsula home.
  • We expect to see a more equilibrium in the market which will be less favorable to sellers while the playing field may finally be leveling.
  • Don’t expect prices to drop, but sellers can’t expect to get as many offers for as much over asking as their neighbor did a year ago.
  • Then there’s the stock market. We’ll let the experts talk about what’s going on there, but clearly with another huge unknown comes more uncertainty, and we can only imagine there will be further pull-back in the housing sector until the uncertainty wanes.
  • With strong job growth, buyers may want to buy now, as if history repeats itself, the Spring market will swing back in the favor of sellers.

 

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. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

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

 

 

 

 

 

 

 

 

 

 

Nothing Remains the Same, Except Change

Nothing remains the same, except change—with each change being slightly different than the one before…

By The Numbers

Now that the waning dog days of summer are upon us, we felt it was time to summarize the second quarter sales for the year. I mean, doesn’t everyone want to know, “How is the Market”? It’s the question posed to us most frequently, and I guess rightly so. After all, for many, ok, I’ll expand that for most people, their Bay Area home is their largest asset—their nest egg. It’s akin to people in other areas of the country, where home prices are more understandable, tracking their 401k’s, stock performance, or their own bank accounts on a daily basis.

When the market takes a nose dive again, and it will, if you’re anywhere near retirement, you had better have a plan “A” now, or you’ll invariably be implementing the alternative, plan “B”, which means you might just get stuck in retirement purgatory waiting for the values to come back so you can cash-out on all of that equity you once had.

This is also the time of year when many of my colleagues come to me in hushed voices wearing ghastly, pasty facial expressions contorted into the most unpleasant sight and reeking of fear, asking me if I noticed that the market is down…that there’s been a shift, and did I notice it, and do I feel the same way. I don’t. I’ve been tracking home sales statistics for my entire career, and it’s normal, heck it’s expected that in the summer the market slows. In typical fashion, agents will post these dire statistics from summer to what amounts to nothing more than fear mongering. Of course the market has slowed down, its summer!

Why? Because people have lives—and they go live them. It’s interesting to observe that the better the economy, the more pronounced how this housing hiatus manifests itself—more money, more market confidence, means you might as well pack up the family and head off for an extended vacation to some romantic or adventures place, like Disneyland. Because let’s face it, once the kids are out of school, parents have to do something to burn off that pent-up energy and it’s certainly not going to be tamed traipsing around open houses every weekend.

Then there’s the inarguable fact that the high bidders for homes in the spring market have already won. They’ve got the home they want, and now they’re leaving the housing hunt rat race in the dust and soaking up all of the equity future buyers will be serving up to them on a silver platter.

So instead of looking back at the spring market and wishing our business was just as brisk and our pipeline as full, we do what one should do and that is to compare and contrast the same period year-over-year to better understand, without hyperbole, pre-conceived notions, or hysteria, what the heck is really going on.

To this we look at the entire market of San Mateo County. It gives us a better more macro view of home trends than say limiting our analyses to a small town like Belmont, however charming it is, but also highly susceptible to wild swings in its small market sample size.

Here we see a different story emanating from the lines of a spreadsheet. The market isn’t down, any more than it should be for this time of the year, and in fact it’s quite strong.

The median home price for San Mateo County in Q2 rose $185,000 YOY or 13%, while sellers also enjoyed receiving 3% more over their asking price.

The number of new listings was up 9%, while sales were down 4%, causing the housing inventory to rise an aggregate 19%.


So the sky isn’t falling. The activity in the market is not quite as brisk, but with all that meddling in people’s mortgage tax deductions that’s to be expected. Now, everyone can go back into their happy place imagining that home values will always go up in the Bay Area with the trajectory of a missile launch, until that missile misfires and lands right back from where it took off.

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. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

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

 

 

 

1812 El Verano Way, Belmont OPEN SAT & SUN 8/4 & 8/5

1812 El Verano Way, Belmont LISTED FOR $1,598,000

  • Remodeled and enhanced with contemporary finishes
  • Three generous bedrooms
  • Two full taupe-tiled baths
  • Rich Oak hardwood flooring
  • Owners ensuite with walk-in shower, dual pane windows and recessed lighting
  • Freshly updated kitchen with newer sleek modern Samsung® appliances including silent-style dishwasher, five burner gas stove, microwave, stainless basin sink—granite counters
  • Large open communal living room with gas insert fireplace, recessed lighting, and new hardwood floors
  • New electrical panel
  • New front and rear landscaping
  • Multiple outdoor dining and entertainment patio areas—grass play area
  • Two car attached garage with new modern garage door
  • Approximately ~1,220 sq. ft.
  • Substantial ~7,102 sq. ft. lot
  • Built in 1955– and updated by current owners
  • Freshly painted interior with designer colors
  • Award winning Belmont schools, near Carlmont High School
  • Sought after Central Belmont location, nearby Carlmont Village Shopping Center
  • Several blocks from Barrett Park Community Center with its many recreational activities, childcare, dog park and socializing
  • Conveniently close to San Francisco International Airport, Half Moon Bay and Coastal towns, major commute arteries, nearby parks and plenty of excellent shopping and dining options

Reports available to qualified parties

1812 El Verano Way, Belmont

HANDSOME REMODELED CALIFORNIA RANCH | COVETED BELMONT HILLS AREA | INCREDIBLE BACKYARD

Designed and constructed by famed engineer and builder, ‘Andy’ Oddstad, this rolling hills location was chosen for its idyllic surroundings and its warmer microclimate—insulated from the cooler western hills exposure–hence the name El Verano, meaning “The Summer”. This post-WWII enclave of modest homes offer spacious lots, wide streets and community friendly sidewalks—rare for Belmont’s rural surroundings.

This single level home resides upon a bluff and enjoys level topography on an oversized lot. The home has undergone extensive enhancements and has been nicely updated with contemporary finishes. New hardwood flooring is throughout the home, along with the generous use of LED recessed lighting.

The nicely updated kitchen features Maple colored soft-close style drawers, granite counters, all new Samsung®stainless appliances including a quiet style dishwasher, five burner gas stove with self-cleaning oven, and French door stainless refrigerator.

Conveniently located in the galley kitchen is a dinette area for casual meals, and the adjacent more formal dining area opens to the spacious living room, augmented by a centerpiece wood burning fireplace, and highlighted by LED recessed lighting. Access to the expansive entertainment patio and newly sodded sunny flat grassy backyard is also available from this room. The amazing rear yard is perfect for evening get-togethers and outdoor enjoyment.

The two-car garage has fresh Shield-Crete epoxy slurry flooring, and new modern roll-up garage door with sidelights and Wi-Fi compatible belt drive Lift Master opener.

It’s coveted location also benefits from its proximity to both downtown areas of Belmont, as well as convenient travel corridors. Located near the Carlmont Village Shopping Center with a variety of retailers, restaurants and popular gathering spots, such as Starbucks, Vivace and Waterdog Tavern with pet friendly outdoor dining. Other businesses include ACE Hardware, and the upscale Lunardi’s Grocery.

For shopping, Hillsdale Mall is a short drive away and is undergoing a complete renovation, with stores such as Nordstrom, Macy’s, Williams-Sonoma, Sephora and Trader Joe’s. Enjoy dining options like Paul Martin’s American Grill, The Cheesecake Factory, California Pizza Kitchen, and The Counter.

Belmont is ideally located on the Peninsula between the Silicon Valley and San Francisco. It’s popular because of its close proximity to major travel arteries—Highways 101, 280, 92. Caltrain and San Francisco International Airport is also conveniently nearby.

Contact us to find out why more people are moving to the Mid-Peninsula. 650-508-1441

OFF-MARKET OPPORTUNITY 1926 Oak Knoll Drive, Belmont

Every so often, there’s a home so special that words cannot do it justice. We could describe it as chic, modern, high-tech, luxurious, inviting and comfortable, but one really must see this home in person to appreciate the complete experience.

This nine-year new classically crafted home has been designed in a contemporary style best described as offering clean lines, proportions, open layouts and abundant natural light. Additional characteristics include flat and shallow-pitched roofs, large expanses of glass, clean unencumbered walls, and an intrinsic connection between the indoor and outdoor space. The result? Gracious, streamlined spaces that radiate harmony.

The entire main floor is thoughtfully laid out with a ground level bedroom, full bath, great room, grand dining area, and kitchen combination. The great room on the main level, encompasses a professional styled kitchen, impressive communal dining area, and an eat-at bar and separate enclave for casual meals or conversations. Functionality includes a six burner Viking® stainless stove and oven combination, warming drawer, deep soft-close drawers while industrial-styled custom concrete countertops complete the chic feel. With a separate stainless prep sink and custom metro shelved pantry, this kitchen remains deeply functional while staying true to the minimalist aesthetic.

Rooms are naturally illuminated with a combination of celestial skylights and transom room transitions. Floor–to-ceiling windows feature expansive views of San Francisco City, the Bay, Mt. Diablo as well as 180º views from the pronounced view deck—harmoniously integrating the indoors with the world.

Bamboo hardwood flooring and stainless cabled railings flow gracefully throughout the home and the inverted layout with the bedrooms below, exemplifies the views from the upstairs main living area.

Down the naturally illuminated open stairwell, we find the lower level bedrooms—perfectly located for warm summer nights. The lower area consists of a main hall with nine foot ceilings leading to the laundry area, two bedrooms serviced by a central hall bath, and a bonus room or 5thbedroom. Also on this level is the owner’s ensuite, which enjoys its own private deck access with spa overlooking the bay. A dual floating sink vanity is in the owner’s suite bath along with a seamless separate shower enclosure and oversized soaking tub and a walk-in closet is nearby.

To visit 1926 Oak Knoll is to realize the passion that went into creating this unique home. We are excited to proudly present this enchanting retreat— welcome home!

FEATURES:

HOME

  • Nine-year new construction with ~68 posts and piers
  • Quiet cul-de-sac
  • Protected micro-climate location
  • Street level entry main living area-reverse floor plan
  • Hardwood Bamboo floors
  • Smooth stucco & sheetrock wall finish
  • Contemporary styling
  • Transom windows
  • Solid core doors
  • Led recessed lighting
  • Stainless cabled railings
  • Dual pane Anderson windows
  • Tankless water heater

MAIN LEVEL

  • Great room with ~11’ gradient ceilings
  • Large communal dining area
  • Celestial windows with automated opening system
  • Open style great room floor plan with pitched ceilings and stunning views
  • Corner low-heat glass fireplace
  • Office, Media room or additional bedroom
  • Two car garage—S.F. views, and plumbed for H&C convenient car washing

CHEF’S KITCHEN

  • Six burner Viking® stove & stainless hood
  • Built-in Viking® microwave
  • Side prep sink
  • Deep cabinetry drawer for professional cooking vessels
  • Walk-in pantry includes custom metro shelving
  • Appliance garage
  • Built-in warming drawer
  • Stainless basin sinks
  • Stainless floating hood
  • Custom concrete counters

FUNCTIONAL VIEW DECKS

  • Multiple private view decks with spa—plumbed for natural gas outdoor grill
  • 180º  bay views of San Francisco downtown & Bay, Mt. Diablo to the south bay
  • Eastern profile for dramatic sunrises year round

GROUNDS

  • Level lower area with large flat paved space suitable for basketball (hoop installed w/lighting), play area or entertaining
  • Gardening beds
  • Mature plantings on almost ¼ acre includes chicken coop and run

OWNER’S SUITE

  • Expansive walk-in closet, soaking tub and separate seamless shower enclosure,
  • Dual raised sinks on floating cabinetry
  • Access to private second level decks and spa
  • ~9’ ceilings

LOWER LEVEL

  • Owner’s Suite and three additional bedrooms
  • Amazing lower level storage areas with ideal wine storage capacity
  • 2nd level room could be 5th bedroom
  • 9’ ceilings

Prop 13 May Die a Slow Death

Do you remember proposition 13? If you do, you probably own a home, but prop 13 may be dying a slow death, at least for industrial and commercial properties.

THE BACKSTORY: On June 6th, 1978, nearly two-thirds of California’s voters passed Proposition 13, reducing property tax rates on homes, and businesses by about 57%. Proposition 13 forever altered the way property taxes would be levied on real property, or so voters were promised.

Under Proposition 13 tax reform, property tax value was rolled back and frozen at the 1976 assessed value level. Property tax increases on any given property were limited to no more than 2% per year as long as the property was not sold. Once sold, the property was reassessed at 1% of the sale price, and the 2% yearly cap became applicable to future years.

Prior to Proposition 13, the property tax rate throughout California averaged a little less than 3% of market value. Additionally, there were no limits on increases for the tax rate or on individual ad valorem charges. (“Ad valorem” refers to taxes based on the assessed value of property). Some properties were reassessed 50% to 100% in just one year and their owners’ property tax bills increased accordingly.

But change is inevitable, and that’s exactly what proponents of the newly proposed initiative are counting on.

WHAT’S IN STORE: A new ballot initiative that takes aim at how commercial properties are taxed under California’s Proposition 13 could raise $6 to $10 billion more each year for schools and other programs and services, according to a new analysis by the Legislative Analyst’s Office.

At the heart of the initiative, (which is still being reviewed by the state attorney general’s office), is a property tax law enshrined in the state constitution since 1978. Proposition 13 caps taxes for all kinds of properties — residential and commercial — at 1 percent of a property’s purchase price, allowing for increases of no more than 2 percent per year, even if the value of the property triples or quadruples over time.

The initiative would change the constitution so that commercial and industrial properties — and land not intended for housing development — are instead taxed based on their current market value. The idea, long favored by critics of Proposition 13, is often called a “split roll” since it would not affect protections for residential properties. Businesses whose total property holdings are valued below $2 million would be exempt.

Supporters of the ballot initiative include the League of Women Voters, California Calls, PICO California and other civic and community groups.

But that’s not the end it. The California Association of REALTORS wasn’t to put more teeth into the initiative by adding an initiative to the proposition 13 overhaul that changes how those homeowners over 55 can transfer their tax base.

Currently, Proposition 60, enacted into law in 1986, allows for the one-time transfer of your current home’s tax base to a replacement property of equal or lesser value after the age of 55 of either spouse, providing that the replacement property was located within the same county.

The problem for most people wishing to benefit from this tax base transfer is they are limited to moving within the county in which they currently reside, or moving to one of only a handful of reciprocal counties (Alameda, Los Angeles, Orange, San Diego, Ventura, San Mateo, Santa Clara, or El Dorado).

The new proposed initiative tied to proposition 13 amendments would allow homeowners over 55 to carry with them their current tax base whenever, (as many times as they like), and wherever they move—so long as they stay within California.

Proponents of the initiative say it will help free up the housing inventory shortage, as many long-time homeowners are reticent to move if they can’t carry their low tax base. While opponents, such as San Francisco-based YIMBY Action, a pro-development, millennial-led group say that this initiative is just helping the rich get richer—implicit in their argument is that if you own a home, you must be rich.

Thanks to the San Jose Mercury for providing much of the article’s investigative analysis and insight.

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. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

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

 

 

 

Possible Tax Hike Looming

1 Month Left to Sell Before Possible Tax Hike

DAILY REAL ESTATE NEWS | THURSDAY, NOVEMBER 30, 2017

Some home sellers would need a sale contract inked before the end of 2017 in order to avoid a big tax bill that would be imposed if the GOP tax reform proposals become law. Both the House and Senate bills would require sellers to have lived in their residence for a longer period of time before qualifying for the capital gains tax exclusion on the sale of a primary home. They would have to live in their house at least five years out of the last eight; right now, the requirement is two years out of the last five.

The Senate version, however, includes an exception for transactions in which a contract is written before Jan. 1, even if the closing occurs in 2018. The bill passed by the House includes no such exception. Therefore, homeowners who are currently thinking about selling have only one month left to complete a deal before proposed tax changes would take effect. Should tax reform be enacted, some homeowners who sell in 2018 may no longer qualify for the capital gains exclusion, which covers up to $250,000 for an individual and $500,000 for a married couple. As a result, the difference between your client’s tax bill pre- and post-tax reform could be huge.

https://youtu.be/jbGfwJBwslk

It won’t be known whether the House or Senate version of tax reform is adopted until the bill is finalized, which could happen in a few weeks. But sellers who haven’t lived in their house for more than five of the last eight years will want to act quickly regardless of the version that is approved.

______________________

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. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

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

What a Mortgage Deduction Reduction Could Do to Home Values

That’s literally the million dollar question. Many of our colleagues think that it will not be passed as the House version did this week. Some have good points and others just wishful thinking.
Many agents have voiced an opinion  that the mortgage deduction will be indexed for the higher cost coastal states, but we feel that’s exactly the targeted group this limitation is designed to hit—so we doubt we’ll see relief their. The senate bill may uphold the million dollar cap on mortgage interest—we’ll see.
We’d be surprised if in this administration, a dramatic negative shift in policy towards homeownership would emerge, but then this administration has been anything but predictive.
If it does pass as the House version stands, we’re not as worried about future homeowners—they’ll get over it and only the ones currently looking into buying a home will even know what’s going on. But for the millions of homeowners who bought their homes counting on the tax relief as the only way they can sustain their payments—therein lies the problem.
Assuming our homes are hovering around a median home price of $1,600,000. A buyer today could write down up to $1,000,000 in mortgage interest, which would be $42,174 in interest the first year. With the new proposed plan, that deduction drops in half to $21,087—resulting in an additional tax liability of around $7,380.50 a year, and that equates to as if they purchased a home for $125,000 more than what they had bargained for. Or another way to look at it. Is home prices (not values) on the Peninsula just went up over $125,000 overnight—so much for making more affordable housing.
Most regular folks are still purchasing homes with mortgages, and most mortgages are higher than in the above example. Obviously, the higher the mortgage, the more of a disparity this system creates in the allowable deduction.
What will real home values do? Probably not much since demand still outstrips supply in today’s market (locally). But the market for vacation homes—a huge segment in San Francisco for example—could drop precipitously since there will be NO deduction for second home mortgage interest. So a silver lining exists for the rich, and they could have a great opportunity to buy into vacation homes at diminished prices—all cash of course.

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 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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

 

Belmont Home Value’s Increase—Is There No End in Sight?

Before we head into the winter slow season for home sales, we’ll take a quick look back at Q3 home sales for Belmont, and the larger San Mateo County.

BELMONT & SAN MATEO COUNTY

HOME SALES—

Belmont had 78 new listings in Q3 as compared to 64 last year during the same period, and increase of 18%.

San Mateo County’s inventory of new listings dropped 6% YOY

INVENTORY/SALES—

Ironically, even with more new listings the inventory dropped 21% YOY. Why? Because sales increased 17% eliminating housing inventory.

SMC’S overall inventory also dropped—31% YOY, and sales dropped by 3.4%

DAYS ON MARKET (DOM) —

The time it took to sell a home in Belmont, on average, dropped from 16 days to 14

SMC Days on market dropped from 27 to 23

MEDIAN HOME PRICE

The median home price increased 12.7% YOY for Q3 for closed homes. When we compared the size of the homes selling in the two periods, there was statistically no difference, at 1784 ft² in 2016 and 1,748 ft² in 2017—so we made no adjustment for square footage interfering with the median home price swing. Note that Belmont it an all-time median home price point this October 2017.

San Mateo COUNTY’S MEDIAN HOME PRICE ROSE 9.5% YOY IN Q3

PERCENT RECEIVED

Belmont home seller’s eked out 4.4% more for their homes over their list price than last year during the same period.

In San Mateo County that number went up to 3.7% of asking

WRAP-UP

In every category in regards to home sale activity, Belmont outperformed and outpaced San Mateo County leading speculation that the peak for Belmont home values have not yet been reached.

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. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

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

 

 

 

 

 

 

Bay Area Home Values Eclipse Historical Records

Case Shiller Report for June 2017

The Case-Shiller Report was released June 27th, the last Tuesday of the month, which tracks home sales in 20 metropolitan cities around the country, called MSA’s, of Metropolitan Statistical Areas.

Our MSA (Metropolitan Statistical Area) in the Bay Area consist of five counties—Marin, San Francisco, San Mateo, Alameda and Contra Costsa. It’s important to note that while home values might be headed upward at a dramatic pace in the counties of San Francisco and San Mateo, they might be lagging in Alameda and Contra Costa, thus diluting the upward trend in one county vs. the whole MSA. This has been the case in our area since the housing recovery began in earnest in 2012.

The same goes for the 20 city composite index, which takes 20 metropolitan cities in the country and tracks them as an average trend.

While the 10 and 20 city composite indices shows that the housing market has not yet eclipsed the all-time high recorded around March of 2006, in the Bay Area, we have.

This graph which we built utilized the data from Case-Shiller for our SFMSA and illustrates that we have reached a new all-time high for home values. However, it’s important to note that the delta between the trend line and the peak where we are today, illustrating where the straight-line home values should be, is far less than in the peak of 2006, where we see a much great deviance off the trend line values. In fact, the peak of 2006 was 58% higher above the trend line than it is today.

One might infer from this that we are not as overvalued as it might appear at first glance.

This give some credence to the synopsis for the Standard and Poor’s Case-Schiller analysis and discussion.

Case-Shiller Analysis by Standard & Poor’s— ANALYSIS

Great View of San Francisco

“As home prices continue rising faster than inflation, two questions are being asked: why? And, could this be a bubble?” says David M. Blitzer Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up. The increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising. At the same time, the supply of homes for sale has barely kept pace with demand and the inventory of new or existing homes for sale shrunk down to only a four- month supply. Adding to price pressures, mortgage rates remain close to 4% and affordability is not a significant issue.

“The question is not if home prices can climb without any limit; they can’t. Rather, will home price gains gently slow or will they crash and take the economy down with them? For the moment, conditions appear favorable for avoiding a crash. Housing starts are trending higher and rising prices may encourage some homeowners to sell. Moreover, mortgage default rates are low and household debt levels are manageable. Total mortgage debt outstanding is $14.4 trillion, about $400 billion below the record set in 2008. Any increase in mortgage interest rates would dampen demand. Household finances should be able to weather a fairly large price drop.”

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. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California.  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

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

 

 

How Much Should I Bid to Win the Home?

How Much Should I Bid to Win the Home? You’ve found the ideal home, and now it’s time to make that offer. The offer to beat the other five offers you hear the sellers may be receiving.

When trying to determine an offer price, where do you start, or stop? Of course, your agent should be armed with the recent sales in the area to help you understand at what price the home you’re interested in could sell for.

Remember that in most cases, the buyer that was willing to pay more for the home than any other buyer is the one that typically wins the bid. So, you can forget about saying you don’t want to overpay in this market. By definition, if you won the home in a multiple bidding situation, you probably overpaid. But relax, now your home will be the sales comparable for the next buyers, that likely will now have to pay more than you did. Think of it to some degree like musical chairs, get your home before the music stops. The sooner you get into an appreciating market, the sooner you get to begin enjoying the appreciation, instead of bidding against it.

How to Set a Fair Price

Deciding what to offer can be a nail biting experience. You don’t want to lose the home, but you also don’t want to be blindly bidding against yourself. How much is too much? When you can’t afford anymore is one good threshold. But assuming you’ve looked at what the market bears for like properties, it’s likely that you’ll already know where you think the home should sell. So, pick a price and stick to it. Ask yourself, at what price am I willing to let go of this home? That way, if you win the bid, you’ll be happy and if you lose, you’ll at least know that going any higher just didn’t make sense. Remember, you have to sleep at night so you’ll have to live with whatever decision you make—choose wisely, and remember, sometimes you just have to let a home go if you are up against an overzealous buyer.
How Much Does the Home Need to Appraise For?

Lenders typically want you to put down 20% to have some skin in the game so to speak. Though as lending trends are beginning to loosen, some 10% loans are available.

Let’s say the offer you are going to make on the home you like is for $1,000,000. If you were putting down 20% that would be a $200,000 down payment and the lender would put up the remaining $800,000. Now the home must appraise for full value-—$1,000,000, as the lender will only lend 80% of wherever the home appraises. And that’s what makes sellers nervous—especially if your offer price is a new high water mark for the neighborhood. But if you could put down 25%, the home would only need to appraise for $937,500, giving both you and the seller some breathing room and peace of mind.

Here’s how the calculation works:

“X” = ((Offer price – Down Payment) ÷ .8) or (80%)
Where “X” is what the home must appraise for given the Down Payment.

So in our above example,

$1,000,000 — $250,000 = (25%)= ($750,000 ÷ 80% ) = $937,500.

 

We also wrote an article about Contingencies, which explains what happens when a home doesn’t appraise

 

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. As Diamond recipients, Drew and Christine are ranked in the top 50 RE/MAX agents nationwide and the top 3 in Northern California  They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomesand on Twitter @ https://twitter.com/morganhomes

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