San Mateo Real Estate - January 2013

Imbalance Between Buyers and Sellers

For the 12th straight month, the average ratio of selling price to list price in the San Mateo real estate market was over 100%.  The last time a streak like this occurred was in 2005/2006. The ratio was 103% in January 2013. A ratio above 100% means that the average sale is for more than the list price (though even in this market many homes still sell for less than their asking price, as some sellers price too far ahead of the market). It is a clear sign that the relative imbalance between buyers and sellers continues. For most property types in most submarkets, there are not enough newly listed homes to satisfy the strong buyer demand.

The predictable result from buyer demand outstripping seller supply has been a steady and prolonged decline in inventory over the past 2 to 3 years. In the middle of 2010, the inventory of unsold homes in San Mateo peaked at over 200 listings. During that entire year, there was an average of 171 homes remaining for sale at the end of each month. In 2011, inventory peaked at 186 unsold homes, and the average monthly inventory was 150 homes. By the end of 2011, inventory stood at 102 homes, only about 20 homes fewer than at the beginning of the year, and about 85 homes less than the normal mid-year peak. If 2012 had been a normal market, inventory would have risen in the first half of the year, hit a high level in the summer and waned by November/December, ready to start the cycle again. As it turned out, 2012 was not a typical year in the San Mateo real estate market. Inventory did not follow the normal seasonal pattern and instead plummeted during the year. 2013 has started with the inventory of unsold homes well under 50 homes, matching the lowest levels since 2004. Most neighborhoods have 0 to 2 listings at any given time. Well maintained homes in desirable neighborhoods are selling quickly and at a premium.

Prices Rising

As is almost a foregone conclusion from the fact that buyers have been regularly bidding above asking, prices are rising in San Mateo. The 12 months moving average price per square foot, median selling value and average selling value are all at their highest since early 2009.

Prices have increased by around 10% in the past year. For example, the average price per square foot was $505 in 2012, up 7% over 2011. In the last six months the average has been even higher at nearly $525.

January Sales Highest Since 2005

There were 37 homes sold in January 2013 in the city of San Mateo, the most to start the year since 2005. This is a continuation of the strong sales activity in 2012, when 686 homes were sold, up from 596 sales in 2011, and the most since 2006.

Unless there is a steady supply of new listings, sales activity will have to decline. Inventory levels are too depleted to sustain 650+ sales in 2013. However, only 45 homes were listed in January 2013, down from 59 new listings at the beginning of 2012 and 76 new listings in January 2011.

While price is certainly a major concern the clearest sign that sellers met their objective is if a sale actually occurred. Sellers were very successful in 2012. There were only 141 listings that expired or were withdrawn from the market, compared to 225 in 2011 and 282 in 2010. One way to look at it is that there were 141 listings that did not sell and 686 that did. In other words, about 83% of sellers were successful in selling. The remaining 17% either were unable to attract a reasonable offer, or had a change of heart about selling. In 2011, the 'success' rate was 73%. 2013 was the highest rate since 2005 when it was 85%.

By The Numbers - San Mateo Real Estate for 2012 and January 2013