San Mateo Real Estate Update October 2011 - Low Inventory

The inventory of for-sale homes remains low in San Mateo. At the end of October 2011, there were 126 homes for sale. That might seem like a lot, but it is actually about 60 fewer homes than were on the market at the same time last year.  Inventory has been lower in 2011 than 2010 for most of the year, but the difference has really been noticeable in the past few months, with 30% fewer homes for sale, versus 5-10% fewer homes at the beginning of the year.

Even with fewer options for buyers, sales have been strong. On a year-to-date basis, there have been 505 homes sold in the city of San Mateo, up four percent from 2010. The most recent month for which we have complete data, October, there were 40 homes sold. Although sales normally decline as we move into the colder months, the total for October was lower than historical averages. It is likely just a function of a lack of inventory or normal fluctuations in the market. We will keep you posted.

The type of constrained inventory that we mentioned above often signals increasing price competition as buyers compete for a dwindling supply. However, price levels in San Mateo appear to be softer than other nearby Peninsula markets that we follow.

Prices per square foot in San Mateo have averaged $470 in the first ten months of 2011, as compared to just under $500 in the same period in 2010, a decline of about $30, or 6%. While a decline of $30 in price per square feet might not seem like a lot (would you notice if a jar of peanut butter was $4.70 instead of $5.00?), it translates into a swing of $60,000 for a 2,000 square foot house. Sellers that are in a rush to sell may need to be more aggressive dropping their asking prices, if they are not getting offers.

One point of caution is that because San Mateo has such varied mico-markets with prices ranging from $450,000 to over $2,000,000, any downward change could just be a shift to a higher proportion of homes being sold in less desirable parts of the city, rather than actual selling values falling.

 

A continued counterpoint to the notion of softening is that we do not see evidence of sellers dropping prices on a widespread basis. The sale price divided by list price has averaged 99% in 2011, meaning that homes sold for about 99% of their asking price. This is both a strong number and on par for the normal rate in San Mateo for the past few years.

If you're interested in learning more about the San Mateo real estate market, considering selling your home in San Mateo, or thinking about moving to San Mateo, please drop me a line and I'd love to connect with you.

By The Numbers - San Mateo Real Estate for October 2011