Prices Continue to Rise and Sales Keep Pace
Recent data on home prices in the Burlingame real estate market suggest that selling values continue to rise. October 2012 represented a continuation of the trend. The average selling price was $1.48 million, the sixth straight month above $1.35 million. The 2011 average selling price was $1.25 million and only one month in 2011 was above $1.35 million. The average price per square foot in October was $655. That does not seem too impressive, given that we have seen figures in the $650 range for the past six months. However, in the 26 months period from 2009-2011, only three months registered an average price per square foot above $655, and half of the months were below $600.
In the first ten months of 2012, the average price per square foot has been $654, up from approximately $600 in 2011. Looking at the longer view of average price per square feet, the peak was reached in 2007 at $703. Prices dipped to just under $600 in 2010 and 2011. About half of the ground has been made up between the bottom and the peak.
Even though sellers have adjusted their list prices to the new reality of higher prices, buyers continue to bid above asking prices. The ratio of sales price to list price has been above 100% in each of the last eight 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. Until we see the ratio of sales price to list price dip back to 100%, prices should be expected to have upward momentum.
Burlingame real estate is benefitting from a couple of factors, some similar to other parts of the country, some unique to our local region. The general positive factors are historically low interest rates, a modest economic recovery and greater consumer optimism about real estate after a number of tough years. What is unique to Burlingame and surrounding areas is that we are experiencing a mini job boom. Nationally, job growth is running at an annual rate of around 1.5%, which is good, but not great. In the San Francisco/San Mateo/Santa Clara area, job growth is closer to 3%. Many of the new jobs are in high-paying sectors like science and technology. Robust job growth and a relatively fixed supply of local housing is putting upward pressure on home prices.
Sales Activity Strong in October
There were 27 homes sold in Burlingame in October 2012. Home sales usually tail off near the end of the year, so this uptick in October was somewhat surprising. October 2012 sales activity was the highest October in many years, and up from 13 home sales in October 2011. Through the first ten months of the year, there have been 227 homes sold, up from 186 homes sold in the same period in 2011. Already, there have been more home sales than in any year since 2006. The Burlingame real estate market is on pace to end the year at approximately 250 sales, the most since 266 homes were sold in 2006.
Recent Home Sales in Burlingame
Below is a selection of recent Burlingame real estate sales, sorted by area of Burlingame.
Amazingly, only one out of 25 recently sold homes went for less than $1 million. In 2011, nearly 1 out of 3 homes sold for less than $1 million. Sellers recognize that prices have risen. Only five of the 25 listings were for under $1 million, two of which were within $5,000 of $1 million. The sub $1 million sale was at 212 Bancroft in Lyon-Hoag. The 2 bed, 1 bath, 1,260 square foot home sold for $935,000. At $742 per square foot, the price per square foot was above both the Lyon-Hoag average (~$600) and all of Burlingame (~$650).
These listings really show how quickly homes are selling. Of the 25 homes in this grouping, all but three sold in less than 18 days! The average days on market for the entire market in the past two months has averaged approximately 20 days. Removing one home on Balboa that was on the market for over 100 days, the average home sold in about 12 days, less than two weeks! 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 will miss the majority of homes that end up selling. In an already constrained market, those buyers will be frustrated. 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.
As the aggregate data showed, many homes still continue to sell above their asking price. Looking at the most recent sales, 80% sold for equal or greater than their list price. October 2012 was an especially strong month in Mill Estates. Of the five homes sold, none lasted more than 15 days on the market. Four of the five homes sold for more than their asking price and the fifth sold for equal to the asking price.
Not all homes sell for greater than the list price. Sellers see prices rising and homes attracting multiple offers, so instead of pricing in line with recent comps they often price higher assuming that is where the market is going. Even in a market where multiple bids are the norm and the average difference between the sales price and list price is positive, nearly half of the recent sales were below list price. Savvy buyers advised properly by their Realtor can save tens of thousands by knowing which homes are priced too far ahead of the market.
There are many notable sales. 1612 Devereaux in Ray Park went for more than $200,000 above the asking price, though in my opinion this home was underpriced given its open floor plan and opportunity to renovate. The 3 bed, 2 bath home sold for $1,200,000 just 11 days after being listed for $988,000. At $727 per square foot, the selling price was above what we have seen in Ray Park in 2012. Easton Addition had three sales over $850 per square foot.
By The Numbers - Burlingame Real Estate for October 2012
|Current Month||YTD Total or Average|
|October 2011||October 2012||Jan - Oct 2011||Jan - Oct 2012|
|Days on Market||54||21||39||31|
|Months of Supply||3.2||1.3||2.6||1.6|
|Avg $ per Sq Ft||$663||$655||$602||$654|
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.