Burlingame Real Estate - March 2012

Sales Activity Spikes in March

Real estate activity was low in Burlingame in the first two months of 2012, but picked up sharply in March with 20 homes selling. Through the first three months of the year, there have been 36 homes sold, up from 31 homes sold in 2011.

Although there appears to be strong buyer demand in the marketplace, sales will not be able to sustain a high level through the summer without the influx of a lot of new listings. The current level of inventory is depleted with just 27 homes on the market at the end of March 2012. Last year at this time there was 46 homes for sale in Burlingame and in March 2010 there were 59 homes on the market. A prospective buyer has many fewer homes from which to choose.

Inventory is low for three reasons. First is the low starting point at the end of 2011. Second is the above-average sales trend to start the year. Third is the below-average number of new listings. In the first three months of the year, 11 percent fewer homes have been listed. If listings do not pick up, inventory will become increasingly constrained, which has had an effect on prices.

Two homes just closed escrow significantly over their asking prices. One was a 2 bedroom, 1 bath home on Marin Drive in Burlingables that was asking $898,000...it had 13 offers and sold for $1,100,000. The other was a large home on Clarendon in the Lyon Hoag neighborhood which was asking $1,398,000 and sold for $1,750,000, which was the most expensive sale ever in the neighborhood...we'll see if this remains a pattern for the spring (I would not be surprise) for the choicest properties.

Signs of Upward Price Pressure

Looking only at the traditional measures of selling values, median prices and average prices, does not shown any sign of price increase. However, these measures are often not reliable indicators for short-term price movements when looking at small areas like Burlingame. The reason is that they are significantly impacted by the size and location of homes that are being sold. In a small area, random fluctuations take longer to cancel themselves out.

Two other measures that better correct for these fluctuations are showing signs of positive price appreciation.

The average price per square foot continues to rise. The 12 months moving average reached $610 in March 2012, up from $591 in July 2011. Similarly, in the last eight months, the average price per square foot of the homes sold in  a given month was above $600 six of the eight months. In the 12 months prior to that, it was above $600 only once.

The ratio of sales price to list price has been above 100 each of the last two months. This suggests that for some homes, buyers are putting in offers above asking prices. Since the beginning of 2008, there have been only three months where the average home sold for more than the final asking price (July 2011 was the third month in addition to the most recent two). When buyers put in bids above asking prices it causes prices to rise, both because the selling value for the home in question is higher, but also because the buyer that lost out by offering only the asking price will consider bidding above asking for the next home.

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.

 

By The Numbers - Burlingame Real Estate for March 2012