San Mateo County Real Estate Market In 2024
You might be wondering, like a lot of home buyers and sellers out there, what is the real estate market going to look like in 2024. The short version is, pretty good at least compared to last year. Many sellers that I’m working with are getting their homes ready to go on the market after being patient for a while and waiting for market conditions to improve, which they now have. Buyers and sellers who thought maybe prices would go one way or the other have now observed pricing being stable for the last year-plus, giving confidence that if you want to make a move, things aren't about to change significantly. On the other side, my buyers are excited and focused and are enticed by finally having a little bit lower interest rates than we've seen in a while.
Just in the first few weeks of this year, I've seen some listings come on the market that have received a lot of interest. Our listing at 1021 Cortez in Burlingame that I mentioned two weeks ago has already closed! The asking price was $3,850,000 and we just closed in seven days with a cash offer at $4,205,000.
I’m going to share with you my reflections on last year and share some thoughts for what I am expecting this year.
The stock market
If we look back on the last year the S&P 500 was up 25% last year, and NASDAQ was up 45%. Why is this important? As you might imagine, many people around here are heavily invested in the stock market, especially if they’ve been saving for a while and they have their down payment in the S&P or other funds. And that’s a huge percentage of peoples’ down payment. When the market goes up, naturally people are more optimistic.
For both buyers and sellers who work at a local tech or biotech company who have RSUs, they have likely increased significantly in value over the last year, which I think will lead to increased transactions. That’s important because it will unlock sellers who have been in their homes for a while as they were waiting for their portfolio to get stronger before being willing to make a move. And because they feel like their portfolio is stronger, they might get something because they know if they’re downsizing it’s just going to be pricey.
On the positive side for interest rates, the FED says they’re going to drop them up to 3 times this year, so we could go from a high last year of very close to 8%, down into the low 6’s, maybe into the high 5’s, who knows? The fact that they’re dropping is certainly giving a little bit of a positive jolt to the market.
Pricing
On an annual basis, the median home price, at least for last year, was $1.8 million, and the projections from the California Association of Realtors this year, are an appreciation of 6.2%, so… last year it was pretty flat. I like to see that it’s going up this year. If you’re a buyer, that’s less exciting. But, it could mean if you see something good in Q1 or Q2, you’d probably consider it. If you’re a seller, that’s the best news I could have delivered you in the last 18 months.
Inventory
Last year the number of new listings that came on the market was the lowest in decades! That was a huge reason why we had sales in San Mateo County that dropped to their lowest point in decades. Which is pretty crazy when you think about that. The California Association of Realtors® is expecting a 22% increase in inventory for this year. I think we’re going to see home prices come up a little bit. Could they come up more? What are my thoughts compared to the C.A.R. forecast?
I think it’s probably safe to say, at least for the conversations that I’ve been having with people in January that I wasn’t having a year ago, we’re going to see more places come on the market. I think people feel a lot more confident that this is going to be the year that people who have been on the sidelines for the last year or two end up transacting.
The Five D’s
That leads me to my next point - there’s something called the 5 D’s, which is what leads people to transact. And that is...diapers, diplomas, diamonds, divorce, and death. These factors drive our local market. We have the stock market doing well so it’s hard not to be optimistic.
If you’re a seller
If you’re a seller, I think we’re going to start to see a lot more listings, like I said, coming on the market. That’s because people who have been waiting, or trying to time the market. I’ve had a few conversations in the last few weeks with people I chatted with in 2017, and 2018, who are now picking the ball back up and thinking that this could be the year. So, if I’m having those conversations, I’m sure many of my colleagues are also having those conversations and that could lead to a lot more inventory.
If you’re a buyer
If you’re a buyer, I think this year is going to be competitive. There are going to be more homes coming to the market, at least it gives you more choice from a supply perspective. Buyers are going to feel a lot more confident given how the stock market has performed recently and with interest rates being lower. I think it’s hard not to be pretty optimistic about that. It’s worth noting that nationally, last year had the highest rate of all cash buyers in the last nine years. Again, not a surprise with rates being higher, but still a sign that many buyers are well capitalized. I feel this is the same around here.
Why do I feel a good level of optimism? Just in the first couple weeks of this year, the number of prospective buyers I’ve been talking to is much higher than it’s been for the last few months, and compared to a year ago. About double as many people as in the past.
If you’re just thinking about making a move in this market, I’d love the opportunity to earn your business and have a conversation with you. Please reach out to me if you'd like to connect.
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