Foster City Real Estate - March 2012

Sales Up Modestly in 2012 as Inventory Plummets

In the first quarter of 2012, there were 23 homes sold in Foster City, up from 17 homes sold in the same period last year. March 2012 was a relatively big month with 14 homes sold. On average, about 10 homes sell per month in Foster City, with the majority of transactions occurring in in the late spring to early fall timeframe, which is typical for most real estate markets.

The level of inventory in the Foster City real estate market, which we measure as the number of unsold homes at the end of a month is very low. At the end of March 2012, there were only 10 homes remaining for-sale, down from 28 homes at the end of March 2011. The reason for the decline is three-fold. Inventory was low at the end of 2011 due to strong sales activity from May 2011 onwards. Sales activity has been healthy in the beginning of the year putting a dent into the existing stock of homes for sale. Lastly, the number of newly listed homes is down by 15% compared to the first three months of 2011, so there are fewer homes coming onto the market to replenish those that are being sold or taken off the market.

What does this all mean?  Well, a prospective buyer in the Foster City real estate market today has about 1/3 as many homes to choose from as that buyer did last year. Assuming there are a similar number of buyers (and market sentiment suggests that there may be more buyers) it means that each buyer has a lot more competition. While the average days on market has increased so far in 2012, this is mostly an artefact of older inventory being sold. A well-priced home will move quickly. Serious buyers need to stay on top of the market and may benefit from working with a Realtor that can help them act quickly when the right property is listed.

Low inventory can be a catalyst for higher prices as buyers bid over one another pushing up sales prices and comps for the new listings. In a real estate market the size of Foster City it is difficult to notice a change in pricing in the short-term because there are not enough sales to get reliable trends.

The data we do have suggests average and median prices remain around $950,000. The average price per square foot in Foster City is about $450.

One data element where we may be seeing some upward price pressure is in the ratio of sales prices to list prices. Sellers are on average now essentially getting their asking price for Foster City real estate. The sale price divided by list price has averaged just under 100% so far in 2012, meaning that homes sold for nearly their final asking price. While this statistic is not perfect -- it doesn't take into account homes that were price reduced and then immediately sold -- it can be an indicator of pricing movement. Last year, the ratio was just under 98%. In 2012, we are seeing less discounting and more multiple bids/bids above asking price than in 2011.

Thinking of buying or selling a home in Foster City?

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

By The Numbers - Foster City Real Estate for March 2012