Mostly Flat Pricing
Unlike neighboring Burlingame and San Mateo, and nearby San Carlos, the data continues to show mostly flat pricing and buyers bidding at or below asking prices in Hillsborough. We are not seeing regular bidding wars like what is happening in other parts of the Peninsula and up to San Francisco.
Looking at the 12 month moving average graph of prices might lead one to think that prices are indeed rising swiftly. Average and median prices are up nearly 10% year-over-year. However, this is a bit of a statistical artefact. The average home sold in 2012 has about 400 square feet square feet larger than the average home sold in 2011. At $700 per square foot, that equals an extra $280,000, which accounts for almost all of the upward movement in selling values in the chart.
The graph below shows the average price per square foot. Unlike the graph above it is not a 12 month moving average, so there is greater month to month fluctuation. As one can see, there has not been a clear change in price levels over the past two years, though at the margin there may be some case for upward momentum.
The graph below shows the average square footage of the homes sold in Hillsborough each month. In the first ten months of 2012, there have been seven months where the average sold home was over 4,000 square feet, versus only two such months in all of 2011. This may indicate stronger demand in the higher end of the market.
While there has not been a price recovery in Hillsborough like other areas, Hillsborough was somewhat atypical to start. Prices in many areas of California fell by 30% - 40%, or even more in a few hard hit inland areas. In Hillsborough, from the peak in late 2007/early 2008 to the trough in 2010, prices declined about 15%. Since then, they have edged up about 5%, and are down about 10% from the peak. Even with the big gains reported in the newspaper, many other areas of California are still down 20%+ from the peak. Hillsborough avoided some of the excess optimism of the boom years and the irrational pessimism of the past few years.
Sales Pace Now Ahead of 2011
There were 16 homes sold in the October 2012. After a slow start to the year, sales pace is now slightly ahead of 2011. 2011 had the most sales since 2005. Through the first ten months of 2012 there have been 128 homes sold in Hillsborough, two homes more than the number sold in the same period in 2011. The recent high watermark for sales was 2004, when there were 168 transactions. The lowest recent year was 2008 when there just 94 sales. 2012 will likely end up somewhere around 140 sales. November and December are usually very slow months.
In some areas of San Mateo County, we are seeing increasingly strained markets with very little inventory relative to recent levels. For the entire County, inventory has fallen about 50% in past 24 months. In Hillsborough, inventory is clearly down from 2009/2010, but only by about 25%. After adjusting for seasonality, inventory has been mostly flat since the beginning of 2011. In October 2012, there were 59 unsold homes on the market at the end of the month, about the same as October 2011. More normal levels of inventory is a good sign for buyers. It means less competition for each listing and less likelihood of getting in a bidding war. Buyers who have been considering the upper end of the Burlingame, San Mateo and San Carlos markets may want to consider broadening their search to the lower end of the Hillsborough market.
By The Numbers - Hillsborough Real Estate for 2012
|Current Month||YTD Total or Average|
|October 2011||October 2012||Jan - Oct 2011||Jan - Oct 2012|
|Days on Market||82||76||60||61|
|Months of Supply||7.3||3.7||4.8||4.5|
|Avg $ per Sq Ft||$707||$740||$707||$717|
Thinking of buying or selling a home in Hillsborough?
If you're interested in learning more about the Hillsborough real estate market, considering selling your home in Hillsborough, or thinking about moving to Hillsborough, please drop me a line and I'd love to connect with you.