San Mateo Real Estate - April 2014

No Sign of Let Up to Sellers Market

Prices continue to rise in the San Mateo real estate market and have reached record levels. Here are the highlights for April 2014:

• The average price per square foot was $671, which is the second highest ever monthly value in San Mateo. The previous high was last month at $683.
• Among homes that sold, the average time on market was just 16 days. Many homes are selling in less than 10 days, often after a single open house.
• Almost every home is selling. There have been just 14 expired/cancelled listings in the first four months (and not all of those represent a "failure" to sell). For comparison, from March 2007 through June 2010, there were more than 14 expired/cancelled listings every month.

Prices have increased by nearly 20% in the past year in San Mateo, and by 35% to 40% since reaching bottom in late 2011. The chart below shows 12 month moving averages to smooth out month-to-month fluctuations. These moving averages have recently surpassed the absolute peaks recorded in late 2007/early 2008. Prices are at record levels in San Mateo.

Despite asking prices also reaching record levels, buyers continue to put in overbids as they compete against one another over a fixed supply of housing. Not only are they bidding above asking prices, but the amount which they are going above also has increased. In April 2014, the average home sold for 9% above list prices, one of the highest rates in at least the last ten years in San Mateo.

Sales Increase in April, But Still Low YTD

As expected given normal seasonal patterns the number of homes that closed escrow in April 2014 increased as compared to March 2013. Sales activity remains low compared to 2013. There have been just 153 sales in the first four months of 2014. This compares to 188 sales in the first four months of 2013.

Slow sales activity is often one of the first signs that a red hot real estate market is cooling. However, when that is occurring, we also typically see rising inventory levels and a spike in the number of listings that end up being cancelled or expiring due to not selling. This is not happening in San Mateo. Sales are down for two reasons (and neither of them has anything to do with buyer demand).

Firstly, the number of newly listed homes continues to decline. In 2013, there were fewer than 700 new listings for the first time in at least 10 years. So far in 2014, listing activity is down 9% year-over-year. Fewer homeowners are interested in selling. This means that the supply of inventory is not being replenished at a fast enough rate.

The result has been downward pressure on inventory. At the end of April 2014, there were just 37 unsold single family homes in the San Mateo real estate market. This compares to 53 unsold homes in April 2013, 83 unsold homes in April 2012 and 162 unsold homes in April 2011.

With fewer homes for sale and fewer new listings coming onto the market, it is no wonder that there have been fewer sales.

By The Numbers - San Mateo Real Estate