Seventh Month of Selling Values Above List Prices
The average ratio of selling price to list price in the San Mateo real estate market continues to be over 100%. It was 104% in August 2012, the seventh straight month above 100%. For the year, the ratio is the highest since 2005, in the middle of the last boom in real estate prices.
In some ways, the selling price to list price ratio is a measure of price acceleration, while selling values are the current prices. While the 'no acceleration' level varies by market, in general, when the ratio is just below 100%, values are flat. They are neither increasing or decreasing. When the ratio goes farther below 100%, values are falling. When the ratio is above 100%, values are rising. What is a hugely positive sign for sellers is that not only is the ratio above 100%, but the ratio itself has continued to rise. This is like accelerating a car onto the freeway, except that when you reach the appropriate speed, instead of easing up your foot, you apply even more pressure to the gas.
Price Levels are Responding
The selling price to list price ratio is more sensitive to changes in price than average and median selling values, which jump around a lot each month based on which homes happen to be selling. Still, we are seeing solid signs of price increases in the San Mateo market. The 12 months moving average price per square foot is at its highest since February 2011. Homes selling in each of the past six months have had an average price per square foot above the 2011 annual level of $472. A sustained higher level is a sign that prices have definitely increased.
Average and median selling values are also the highest they have been in the past year when looking at the 12 months moving average. Recent months have contributed to this increase, with median selling values at or above $800,000 and average selling values in the high $800,000s. Given the market and economic conditions that exist today, we would expect to see prices continue to rise going forward.
Inventory Remains at Historically Low Levels
Inventory levels remain very low. There were less than 60 homes for sale in San Mateo at the end of August 2012. At the end of August 2011 there were 153 homes for sale. What that means is that a random buyer in August 2011 had about 100 more homes from which to choose than a random buyer in 2012. Along with a strong local economy, the lack of inventory is a main driver of the multiple offers we are seeing. There are not enough listings to go around for all of the buyers out there....
Another effect of the low inventory/strong demand is that the amount of time a home spends on the market before being sold has dropped. The average days on market for homes sold in the San Mateo real estate market in the past few months has been less than 4 weeks. Remember, that is the average time, many homes are being sold in less than two weeks.
Sales Activity Continues to be Strong
Sales remained strong in August 2012, though for the first time this year, the number of monthly sales was not higher than the corresponding month in 2011. Through the first eight months of 2012, there have been 475 homes sold, a 21% jump over the 392 homes sold in the first eight months of 2011. At the current rate, we should see at least 600 homes sold in San Mateo for the first time since 2006. Sales activity reached a low of 476 in 2008. Higher sales have been a contributing factor to lower inventory. Another factor is that there have been fewer new listings. In 2011, new listings were down seven percent from 2010. So far in 2012, they are down another seven percent.
By The Numbers - San Mateo Real Estate for 2012
|Current Month||YTD Total or Average|
|August 2011||August 2012||Jan - Aug 2011||Jan - Aug 2012|
|Days on Market||45||28||48||35|
|Months of Supply||2.4||1.0||3.2||1.3|
|AVg $ per Sq Ft||$453||$494||$469||$495|
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