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Market Report

North Peninsula 

 

Belmont, Burlingame, Foster City, Hillsborough, Redwood City, Redwood Shores, San Carlos, San Mateo 

As January rounds out the holiday season, this year we found the Bay Area market started on a somewhat slow note – which was to be expected. As families celebrated the holidays, participated in numerous local Super Bowl events, and endured El Niño, housing sales slowed down. All of which is to be expected at this time of year. So as the weather becomes warmer and the flowers begin to bloom a natural increase in activity should present itself.

Overall, we’re seeing the market to be slightly in favor of sellers. Inventory throughout the Bay Area has been somewhat low, giving buyers less to choose from and sellers more flexibility with higher prices. This can be largely attributed to the massive job growth throughout the area. California Association of Realtors (C.A.R.) projected statewide job growth to be 2.3% in California this year, creating the lowest unemployment rate we’ve seen over the past 5 years. To put it simply, more jobs means more people need houses, so as the year progresses, we will see more homes being built to accommodate new jobs, and more homes being put on the market.

 

C.A.R. Vice President and Chief Economist Leslie Appleton Young echoes these sentiments, and provides a detailed outlook: “The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth,” she stated. “However, the global economic slowdown, financial market volatility, and the anticipation of higher interest rates are some of the challenges that may have an adverse impact on the market’s momentum in 2016. Additionally, as we see more sales shift to inland regions of the state, the changes in mix of sales will keep increases in the statewide median price tempered.”

Okay – that may have been a little bit much and sounded a little confusing, we know. That’s why we’ve taken a much closer look, and broken it down into bite sized, easy to understand pieces for you. The market changes in meaningful ways each month, and we want to make sure that you’re always provided with the most accurate and up to date information possible so you’re always well informed. If you want to buy, sell, or just get a general sense of your neighborhood, this report has you covered.

Inventory

 

Inventory Insights

Similar to last month, January’s market leaned in favor of sellers.

Total property sales in January increased slightly compared to this time last year, indicating a positive overall outlook for the year, but sales decreased significantly compared to the previous month. The monthly decrease, however, is actually pretty normal with seasonal factors taken into consideration. The holidays are historically slower than the rest of the year when it comes to home sales; families want to spend time together undisturbed, the weather is less than ideal, people travel, large events like the Super Bowl happen – the list goes on.

The total number of homes available for sale in January marginally increased compared to last year, and increased significantly compared to last month. While having more homes available for sale is always good for buyers, unfortunately inventory was still at its seasonal low. This smaller inventory means that buyers who have been waiting to buy will have fewer homes to choose from, which is great news for sellers! As winter passes and spring begins, we’ll begin to see more homes on the market accompanied by more sales.

In the luxury market, however, buyers had the upper hand – but not by much.

The total number of luxury homes available in January was slightly higher than this time last year as well as this time the previous month. Still, even the smallest increase in available homes gives buyers more variety to choose from.

Pricing

Pricing Insights

The average “For Sale” price in January was $3,124,000; the difference is small compared to both last year and the previous month with a slight ebb and flow from both higher and lower prices.

The average “Sold” price saw a moderate decrease from both last year and the previous month at $1,497,000, making January a great month for buyers. That’s a pretty large difference between the average listing price and the average sold price, showing that low demand and the power of negotiation can be monumental in home sales

Since we are still getting over the fervor of winter and the holidays, it seems that demand has yet to catch up with supply. As the year progresses, however, demand will continue to grow, leading to more competitive pricing. So, sellers, don’t worry – your time is coming soon!

 

On the Market

 

Days on Market Insights

The Days on Market (DOM) shows, on average, how long properties are on the market before they sell. The amount of time it takes a house to sell can help us determine whether buyers or sellers are having a more favorable month.

This January’s DOM was 22 days, just one day longer than the previous month and a little more than a week shorter than last year. In this sense, it was a great month for sellers; the longer a house is on the market, the more likely it is that there will be room for negotiation, and lowered prices. January’s DOM was relatively low, and home sales moved quickly given the slow nature of the season.

For buyers, that meant that they had less time and power to negotiate, or to window shop without making a decision.

But again, as we spring into spring, the housing market will begin shifting dramatically; we’ll see a significant increase in homes on the market, so buyers, don’t worry! Your time to shine is coming soon.

 

 

 

 

 

"I know the financial markets have been a bit rocky the last few months, but when you step back and look at the fundamentals of the Bay Area real estate market, it’s strong!" 

Tom Tognoil

President & CEO Intero Real Estate Services, Inc.