Hillsborough Real Estate - July 2014
Lowish Inventory Contributing to a Continuing Sellers MarketThe Hillsborough real estate market still favors sellers as buyers compete over a relatively low level of inventory for the area. Highlights as of July 2014:
- Despite the number of new listings on pace to be the fewest in 10 years, the number of homes sold is up 19% year-over-year. Hillsborough may end up having the most sales since 2004.
- The average price per square blipped down in July 2014 to $787. However, in the prior three months it was above $900 each month. It has only been above $900 five times ever in Hillsborough. Year-to-date selling prices are at record levels.
- Inventory remains at historically low levels. There were 46 unsold homes at the end of the month. Over the past few years, summer inventory levels have exceeded 60 homes.
The ratio of average sales price to list price was 97.6% in July 2014. It fluctuates a lot from month-to-month. For the year, amongst homes that have sold, sellers are receiving on average just about their list price. The ratio of sales price to list price is 100.2% Hillsborough is a bit idiosyncratic and in a neutral market where prices are neither rising nor falling, the ratio is usually in the range of 96% to 97% (in most cities in the mid-Peninsula, neutral is around 100%). In fact, in the past ten years, the ratio in Hillsborough has never averaged above 100%. The previous high was in 2005 at 98.9%. When this ratio is above the normal baseline for an area it is strongly suggestive of a market that favors sellers and may foreshadow continued price increases.
Sales Activity Up Sharply in 2014There have been 94 homes sold through July 2014 in Hillsborough. Last year at this time, 79 homes had been sold. That's an increase of 19%. At the current pace, Hillsborough should end up seeing around 160 homes sell in 2014, which would be the most since 168 homes sold in 2004. Last year, 145 homes sold.
Sales have increased at the same time as the number of newly listed homes has declined. There have been 128 new listings so far in 2014 through July, as compared to 139 new listings through July 2013. Not surprisingly, with listings (supply) down and sales (demand) up, this has put pressure on inventory levels. The number of unsold homes was 46 in July 2014. This compared to 61 unsold homes as of July 2013. While inventory has risen over the past six months, this is entirely consistent with normal seasonal patterns. Inventory should begin to decline again once we transition to fall. Adjusted for the time of year, current inventory levels are at their lowest level in the past 10 years in Hillsborough. Lower inventory causes buyers to compete for the same houses. This means more multiple bidder situations, which often leads to offers above asking prices and generally rising home values.
By The Numbers - Hillsborough Real Estate
|Current Month||YTD Total or Average|
|July 2013||July 2014||Jan-Jul 2013||Jan-Jul 2014|
|Days on Market||81||72||60||64|
|Months of Supply||4.1||3.3||5.0||3.0|
|Avg $ per Sq Ft||$873||$787||$816||$878|
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