San Mateo County Real Estate Status Report
This full report and other Real Estate Resources are available at www.bayareahomesource.com The complete report includes all graphical data to support statements & conclusions.
WHAT HAS HAPPENED?
In October, single family homes on average sold for 1% to 3% below the original listing price depending on their market segment (see segment definitions in the full report). About 51% of homes sold below original list while 34% sold above. The high-end market (Hillsborough, Atherton, etc) and seaside cities (Half Moon Bay, Pacifica, etc.) are experiencing the most price pressure with the highest below price percentages.
Average home prices actually jumped up a little in October due to an unusually high number of $3M homes being sold. The average home in San Mateo County now costs $1.16M. However, unit sales overall remain weak with only about 400 homes sold in October (17% below average). The number of new listings has not decreased and inventories are well above the numbers seen in the past couple years.
WHAT DOES IT MEAN?
The reality is that homes may have suffered a small decline in October, but this does not yet make for a trend. Homes prices overall are relatively flat. However, the low monthly sales volume is likely leaving us closing the year with 4,900 homes sold vs. the 5,800 average for the past decade.
For sellers, the good news is that inventory levels are following seasonal patterns and began trending downwards in October. Inventories remained well within the levels seen in the relatively healthy, but slower markets witnessed in the past decade.
While it may be a buyers market, buyers may still find themselves in multiple offer situations. The 30% of homes that sold above the asking price, likely achieved this feat through multiple offers. The low-mid range, well priced (or even priced below market) home that is unique, well designed and in a good neighborhood is still bringing in competitive bids. Although multiple offers are now more the exception than the rule; great, well priced homes should at the very least sell quickly.
WHAT SHOULD I DO?
Buyers you could wait in the sidelines for prices to drop, but I'm very leery of timing the market for a personal residence - investments are different. Even if prices don't climb, interest rates are still near 40 year lows and could rise, which in essence is a price hike since your monthly payment will be higher. But I also don't recommend you rush to buy a home. The plain vanilla homes will linger on the market or there will be another one like it for sale soon.
You also now have the luxury to be more demanding on price negations and repair requests. "AS IS" offers are no longer a must. However, if you see a home that is absolutely perfect for you and it falls into a 'mass' appeal category, then you may want to jump on it! I ran across such a home in Early November and it received 12 offers.
Now more than ever, be selective about the agent you choose! Use an agent that is willing to negotiate hard for you without loosing the deal altogether. Many agents have only worked with buyers during the 'hot' market period where buyers begged and accepted whatever they were given.
Many of these agents are not accustomed to fighting for their buyers. Have someone represent you that understands what the home needs and how to negotiate for it. In addition, since the market could change, select someone that carefully looks at 'real' market trends so they can advise you in a timely manner on how to best proceed.
The good news is that prices are stable, rates are still low, and buyers are still willing to compete for homes on a smaller scale. If you can afford it and have the time, try to make your home as appealing as possible to potential buyers, but don't go over board. Large remodeling projects may cost you more money than a buyer will be willing to pay.
Learn to be patient and vigilant of the market. Also be prepared to have your home on the market longer than before. Many homes now take two or more months to sell. Try to be accommodating to buyers, make it easy for them to view the home and consider having as many of the repairs listed by a pest or property inspection completed prior to placing the home on the market. This means preparing your home for market earlier than before when the market was 'hot'.
The realtor you choose is now more important than ever. Simply putting a 'for sale' sign on a home is no longer an acceptable marketing strategy. You need a realtor that understands marketing and is willing to invest their money and time to sell your home.
While you want an agent that is experienced and knowledgeable, you may also want to reconsider using the "Big" player. Many of high volume listing agents were able to effectively do their job because they did not have to invest much time into any one listing - homes virtually sold themselves. Today, you want an agent that is savvy enough to really market your home, but humble enough to appreciate your listing.
In addition, since the market could change quickly, select someone that carefully looks at 'real' market trends so they can advice you in a timely manner on how to best proceed. You need to be informed about your local competition and the direction the market appears to be heading, this is the area the majority of agents erroneously depend on rumors and not real research.
For more advice on buying or selling a home, visit www.bayareahomesource.com
About The Author
Mark Martinho is a San Mateo County Realtor with a background in Engineering and Financial analysis. He leverages these skills to methodically analyze the Real Estate Market in San Mateo County. Call him at (650)346-1595 if you have questions.