Prices Are Rising
In March 2012, our note for the Redwood City real estate market was 'Steady Prices'. However, we noted that the extraordinarily low level of inventory was an indicator leading to higher prices. We were already seeing some of the desirable homes received multiple offers above asking prices. Fast forward to September 2012, we can now say that 'Prices Are Rising'.
The 12 month moving average values for average prices, median prices and average price per square are up nearly 10 percent since last September, with almost all of the gains occurring in the past six months. The last three months have seen some sharp upward movement in prices. The average price per square foot has been above $500 each month, and above $540 in both August and September 2012. In only one month since 2008 have average prices per square foot been above $500.
Strong buyer demand is evidenced by the fact that many (but not all) homes are selling for above their asking price. In each of the last five months, the average sales price to list price ratio has been above 100%. The ratio was below 100% over the past five years as sellers had to regular discount asking prices to entice buyers. The situation has changed for many sellers as the market has transitioned from a buyer's market to a seller's market.
Sales Up in 2012 (Though September 2012 Slow)
Through the first nine months of 2012, there have been 455 homes sold in Redwood City, up from 410 in the same period last year. The real estate market is on pace for about 580 sales. Last year, there were 536 homes sold. Sales reached a trough in 2009 when there were 469 transactions. September 2012 was on the slow side, with 31 sales, as compared to September 2011 with 51 sales. There were 42 sales in September 2010.
Sales were down on a year over year basis across San Mateo County in September 2012, so the Redwood City experience was not out of line. The reason is not a lack of buyer demand. Rather, there is a dearth of inventory across San Mateo County. In Redwood City, sales are up 11% this year, while new listings are down 17%. The result has been a sharp decline in unsold inventory. At the end of September 2011, there were 172 homes left on the market. By the end of September 2012, inventory had fallen more than half with less than 70 homes for sale. For a prospective buyer, that means there are many fewer homes from which to choose and less likelihood of finding a home that meets their needs.
Homes that are selling are doing so quickly. In the last four months the average days spent on the market for home sold was about one month. Last year, the average home that sold was on the market for two months. Many homes are selling in a few weeks or less, with the most desirable listings often gone in less than 10 days. Determined buyers need to continually stay up on the market, and/or work with a Realtor to inform them of listings as they come onto the market (and sometimes even before).
By The Numbers - Redwood City Real Estate for September 2012
|Current Month||YTD Total or Average|
|September 2011||September 2012||Jan - Sep 2011||Jan - Sep 2012|
|Days on Market||56||27||61||42|
|Months of Supply||3.4||1.8||3.7||1.6|
|Avg $ per Sq Ft||$420||$549||$442||$491|
Thinking of buying or selling a home in Redwood City?
If you're interested in learning more about the Redwood City real estate market, considering selling your home in Redwood City, or thinking about moving to Redwood City, please drop me a line and I'd love to connect with you.