San Mateo County Real Estate - June 2012
Market Turns a CornerIn the last few months there has been a noticeable change in the broader San Mateo County real estate market. The chart below really exemplifies what is occurring. The chart shows the ratio of the average sales price to list price. If the ratio is above 100%, then it means that on average, homes are selling for more than their final list price. It does not mean that every home is selling for above asking, nor that many homes languish on the market for many months with no offers. But, the swift change in the past few months suggests that the market has 'tipped' from an equilibrium between sellers and buyers to a seller's market.
Healthy buyer demand, driven by a strong local economy, record low interest rates, and a dearth of inventory is causing more and more homes to receive multiple offers and offers above asking. Assuming these factors remain in place, this portends future price increases as sellers recalibrate their asking prices. One element that will remain is tight inventory. There are less than half as many homes on the market as there was 12 months ago.
In both May and June 2012, the sales price to list price ratio was above 102%. Previously, it had not been over 102% in any single month since October 2005.
Sales Activity Continues to Climb2012 home sales continue to outpace 2011. Through the first six months of the year, there have been over 2,500 homes sold, versus just over 2,220 homes sold in the same period last year. At the current rates, sales could top 5,000 for the first time since 2006.
Impressively, while sales are continuing their ascent, the number of new listings coming onto the market has fallen sharply (hence the decline in inventory). Through the first six months of the year, the number of new listings is down 13 percent compared the same period last year. Every month so far has seen fewer new listings than the corresponding month in 2011. Listings activity is at the lowest pace since at least the middle of last decade. Perhaps sellers feel that the market has hit bottom and want to hold on for higher prices.
Too Early to See Price MovementWith more and more homes receiving multiple offers, we would expect price levels to rise. However, it might be a bit early to see it show up in the data. The chart below shows 12 month average to better smooth out random monthly variation. Looking at the actual monthly data does suggest an uptick in prices. The average price per square foot has been over $520 in each of the past two months, after being below $500 in each of the prior 21 months. How much of this is due to generally increasing price and how much is potentially due to a mix in sales to higher priced areas remains to be seen.
Average selling values remain above $900,000. Median selling values are below $700,000. The fact that average selling values are so far above median selling values signals that there are a fair amount of ultra-expensive homes in San Mateo County. With areas like Hillsborough, Atherton, and Burlingame, this should come as no surprise.
By The Numbers - San Mateo County Real Estate for 2012
|Current Month||YTD Total or Average|
|June 2011||June 2012||Jan - Jun 2011||Jan - Jun 2012|
|Days on Market||51||34||57||50|
|Months of Supply||3.1||1.4||4.0||1.9|
Thinking of buying or selling a home in San Mateo County?
If you're interested in learning more about the San Mateo County real estate market, considering selling your home in San Mateo County, or thinking about moving to San Mateo County, please drop me a line and I'd love to connect with you. Raziel is an expert in Burlingame real estate, San Mateo real estate, and Hillsborough real estate.