After peaking at 101.7% IN 2021(only the second time in the past decade that sale-to-list has climbed above 100%, Hillsborough settled into a 99.9% figure for 2022 and 2023. This again is notable because it represents the third-highest sale-to-list price ratio recorded in town during the past decade. This includes a Q4 that saw sale-to-list drop to 94.0% on 14 sales— significantly at an average of $6.645 million, (10% higher than the year-end average) and including a trio of eight-figure sales that only fetched 89% of their asking price.

Only 97 homes sold in 2023, the lowest — by a wide margin — recorded at any time since 2014.97 sales is 17% less than in 2022, an eye-opening 43% less than in 2021, and 25% less than the average annual sales for the past 10 years. Breaking sales performance down further, we see that 2023 trailed 2022 (also a down year) by more than 21% in every quarter except Q2, when sales actually increased 6.3% year-over-year. This is due to a brisk June performance, when 19 homes sold, compared to only eight in 2022, which isn’t surprising, given the newness of interest rate volatility in June 2022. However, June was the only month where 2023 sales outpaced 2022 and if you remove it from year-end, the gap between 2022 and 2023 sales totals grew by almost 30%.

While 2023 was not a boom year for Hillsborough real estate, it wasn’t the vast correction experienced by some other Bay Area cities. This is reflected in many data points including average days on market (DOM), which actually decreased year-over-year in 2023. Hillsborough homes spent an average of 34 DOM in 2023, down slightly from 2022’s 36 and — significantly — down almost 20% from 2021’s 43 DOM. Notably, an average of 34 DOM is the second-lowest figure recorded in Hillsborough over the past decade, raising the question: why has demand remained strong in Hillsborough when it has waned in so many other places?

With Hillsborough as an example, the takeaway from 2023 is that buyers with down payment resources are using them to neutralize increased interest rates. For the year, 26.5%of all Hillsborough buyers paid cash for their homes; 19.3% put down more than 50%. Combined, that’s 45.8% of the entire market putting down at least half of their home’s value, compared to33.6% who did so in 2022. Notably, those numbers grow as you reach the top of the Hillsborough market. 34% of cash buyers purchased homes for $5 million or more, 50% purchased homes priced above $7 million. Meanwhile, 43.4% of buyers put 21% to50% of their price as a down payment, still the largest market segment but significantly less than in 2022 (55.8%), 2021 (60.3%)and 2020 (59.8%