Redwood City Real Estate Market Update September 2011 - Softer Pricing?

The Redwood City real estate market continues to generally remain stable. There were 45 homes sold in September 2011, which is not an atypical total for the month. Through the first nine months of the year, there have been 401 homes sold, up two percent from the same period last year. Sales this year have been pretty even with the last year, so the year-over-year total does not mask any recent strength or weakness in terms of sales.

There have been fewer new listings in 2011. Compared to 2010, eight percent fewer homes have come onto the market. The combination of flat to rising sales and fewer listings has driven inventory down sharply. At the end of September there were 148 single family homes for sale in Redwood City. Last year at this time, there were 215 homes on the market, though September happened to be the peak month. Still, average inventory has been down 10% for the year and 25% in the most recent four months.

Price levels appear softer than other Peninsula markets. Average and median selling prices are down 4% and 8%, respectively, for the year. The price per square foot has averaged $445 in the first nine months of 2011, as compared to just under $475 in the same period in 2010. A decline of 6% may seem like a lot, but could be evidence of lower quality homes in less desirable parts of Redwood City being sold, rather than actual declines in selling values.

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 98% in 2011, meaning that homes sold for about 98% of their final listed asking price. In same period in 2010, the ratio averaged 99%. A decline of only one percentage point (actually less than that after we account for rounding) is not that meaningful. When prices were clearly falling from late 2007 to early 2008, the ratio dropped by about 3-4 points across the county in a matter of months.

In summary, we are seeing less inventory, flat to rising sales and no widespread evidence of sellers accepting lowball offers in Redwood City. The only sign of price softening are prices themselves. Given that most nearby areas seem to have steady prices, it is probably best to withhold final judgment at this time (hence the ? in the title). However, if the market does become more unsteady, buyers and sellers should be aware and have a plan to react.

By The Numbers - Redwood City September 2011

See below for all of our latest September, 2011 real estate market updates:

San Mateo County Belmont Burlingame and neighborhoods (Burlingame Grove, Burlingame Hills, Burlingame Village, Easton Addition, Mills Estates, Ray Park, Terrace) Foster City Hillsborough and neighborhoods (Upper Hillsborough, Tobin Clark Estate, Lower Hillsborough) Redwood City Redwood Shores San Carlos San Mateo