Hillsborough Real Estate Update October 2011 - Holding Steady

Raziel Ungar

Raziel Ungar

November 9th, 2011 - 2 min read

As a relatively small market (100-150 sales per year), the trends do not often change month-to-month in Hillsborough. The October 2011 data suggests a continuation of the seller's market that we have seen recently in Hillsborough. Sales remain steady, while listings and inventory are down.

There were eight sales in September.  Sales have declined each of the past five months, though this is more of an indication of the change in seasons (there are more sales in summer/early fall than late fall/winter) than a change in the market. Through the first ten months of the year, there have been 126 homes sold. That is up 19% from the same period last year, and 62% from the same period in 2009.

At the same time sales have been increasing, there have been fewer new listings coming onto the market. Year-to-date, new listings are down 13%. With sales up and listing down, inventory has fallen sharply. At the end of September, there were 55 homes for sale in Hillsborough, compared to last year at this time when there were 85 homes for sale. Thirty fewer homes for sale mean that each seller has less competition and each buyer has less choice, and the homes that are on the market are selling faster than they did in the year prior. The average home that has sold in 2011 did so in 60 days, down from 67 days in 2010.

Recent closed sales prices in Hillsborough show why it's important to do a deeper analysis than just looking at changes in median or average selling prices. Through the first ten months of 2011, median sales values are down 10%, while average selling values are down 5%. Looking at the chart below, which shows rolling 12 month median and average selling values, prices appear to be down about $200,000-$300,000 from the end of 2010. While the data is correct, it can be misleading because there has been a shift in the type of home sold in 2011 as compared to 2010. The average size of a home sold in 2011 has been 3,800 square feet, as compared to nearly 4,200 square feet in 2010. With the average price per square feet at about $700, that difference of 400 square feet equals approximately $280,000, which is equal to the entire change in average/median prices. In fact, once we control for the change in the size of homes being sold and look at just price per square foot, selling values appear to be increasing.


As the market continues to be strong, sellers are not seeing the need to dramatically reduce prices to entice buyers because of the demand, though there are continued targeted price drops. The sale price divided by list price has been above 95% in each of the last seven months, meaning that homes sold for more than 95% of their asking price on average. In the 15 months from January 2010 to March 2011, the sale price divided by list prices was at or above 95% in only three months. The "normal" rate varies by area and even in the boom years or 2004/2005 was usually well below 100% in Hillsborough.

By The Numbers - Hillsborough Real Estate for October 2011

Current Month YTD Total or Average
October 2010 October 2011 Jan - Oct 2010 Jan - Oct 2011
Sales 6 8 106 126
Days on Market 37 82 67 60
Months of Supply 14.2 6.9 7.5 4.7
Average Price $3,173,000 $2,644,000 $2,819,151 $2,677,619
Median Price $3,690,000 $2,088,000 $2,627,547 $2,363,222
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