Prices Appear to Have Risen...But How Much?
Home prices in the Burlingame real estate market appear to have risen. The question is how much. Are prices up 10%, 5%, 20%? This isn't something for which one can obtain a definitive answer, but here's the data we are seeing.
To the casual observer it may not even appear that prices have increased. After all, the median selling value in the first seven months of 2012 has been $1.22 million, down slightly from $1.23 million in 2011 and $1.25 million in the first seven months of 2011. All in all, median selling values are down a few percentage points. Average selling values tell a slightly different story. In the first seven months of 2012, average selling values have been $1.32 million, up from $1.26 million in 2011 and $1.27 million in the first seven months of 2011. The average sales price is up a few percentage points. If those were the only two variables you were considering, you might say that prices are flat. Why are we saying something different?
The reason is that in a relatively small area like Burlingame, short-term changes in the median and average sales prices will be driven more by what type of homes happen to be listing/selling rather than changes in the fundamental values of homes. For example, if a lot of homes are selling in the more modestly priced areas like Lyon-Hoag and Burlingame Village then it could bring down the average, even if the price of those homes are rising. Likewise, if say a lot of large homes are selling, then it might bring up the average price, even if those homes were selling for less than they did in the past.
One way to help correct for this is to look at the average price per square foot. This tells a very different story. In the first seven months of 2012, the average price per square foot has been $648, up 8% from $598 in 2011, and up 10% from $589 in the first seven months of 2011. This isn't a fluke in the numbers. Every single month in 2012 has had an average price per square foot above $615. Last year, only 4 months were even above $600.
Another sign of rising prices is that we continue to see buyers compete with each other and bid above asking prices, sometimes significantly. The ratio of sales price to list price has been above 100% in each of the last six months, meaning that on average, homes have sold for more than their final list price. Many of the best homes are selling with 4-8 offers and often with no contingencies, something not observed at this rate of frequency since at least 3 years ago.
The final verdict? Home prices in Burlingame are probably up 5% to 10% from a year ago. That is an extra $50,000 to $100,000 on a home that would have sold for a $1 million a year ago! While that is exciting for sellers, there is still some ways to go before we reach the peaks seen in late 2007. At that time the average price per square foot was around $700 and average/median selling values were over $1.4 million. Prices would have to rise about another 10% to reach that level. While that might be disheartening for people who bought at the top of the market, they are in much better shape than people who purchased in most other areas of California.
Sales Activity Strong Again in July
Sales activity continued to be strong in Burlingame in July 2012, with 30 homes sold. Compared to June, when 39 homes sold, it might not seem like such a feat, but July is only the fourth month in the last 7 years with at least 30 home sales. Through the first seven months of the year, there have been 154 homes sold, up from 131 homes sold in the same period in 2011. At the current rate, Burlingame could clear 250 sales for the first time since 2006.
The heightened level of sales is even more impressive when one considers that the inventory of unsold homes remains low. At the end of July 2012, there were about 30 homes for sale. Last year at this time there were twice as many homes on the market! At the current sales rate, the entire inventory of homes would be gone in a month without a continued flow of new listings. April and May saw a lot of new properties listed, but June and July were a bit more subdued, with less than 30 homes listed each month. For sellers who have been sitting on the fence the current market represents an opportunity to sell their house for potentially the highest price they would have likely received in the past 2 to 4 years.
Recent Home Sales in Burlingame
This is a selection of Burlingame real estate sales from July 2012, sorted by area of Burlingame.
We noticed a couple of themes. While there are still a lot of homes selling for more than asking price, it was less prevalent than in prior months. For example, in June, all of the sub $1 million listing that sold did so for at least their list price. In this batch of sales, only 4 of 9 sub $1 million listings sold for more than their list price. We would chalk that up more to sellers getting too far ahead of the market, rather than any real weakness, but we will keep you informed in the upcoming months.
Most homes continue to sell quickly. With the exception of a handful of outliers, homes that are selling are doing so very quickly. Once you factor in the time to actually see a home and then make an offer, buyers who do a weekly or bi-weekly scan of the inventory are missing out on the majority of homes that end up selling. In an already constrained market, those types of buyers will be frustrated and may eventually pay too much as they jump at the few listings that stay on the market longer. It's important to have the right Realtor monitoring the market for you. A few days or even few hours can really make all the difference.
There were lots of noticeable sales. Take a look at the two properties in Burlingame Gate. A 2 bed, 1 bath, 1,360 square foot home at 1441 Laguna sold for $942,000, which was $167,000 above asking. A 3 bed, 2 bath, 1,510 square foot home at 1128 Juanita sold for $1.2 million, $71,000 above asking. The price per square foot was nearly $800!
By The Numbers - Burlingame Real Estate for July 2012
|Current Month||YTD Total or Average|
|July 2011||July 2012||Jan - July 2011||Jan - July 2012|
|Days on Market||28||38||32||33|
|Months of Supply||2.3||0.9||2.7||1.6|
|Avg $ per Sq Ft||$595||$646||$589||$648|
Thinking of buying or selling a home in Burlingame?
If you're interested in learning more about the Burlingame real estate market, considering selling your home in Burlingame, or thinking about moving to Burlingame, please drop me a line and I'd love to connect with you.