Happy New Year! Hopefully, the recent rains are an auspicious sign of abundance and good things to come. As we move into 2017, we’ll take a look at some market trends over the past years and some thoughts on how to view them. But first, let’s review the market data for December.
In San Mateo County, sales volume of all residential real estate increased slightly by 1.5% on a year-over-year basis in December. Sales volume decreased by 7.4% on a month-over-month basis as compared to November, which is consistent with seasonal trends. The inventory level dipped in December to 0.7 months (approximately 3 weeks), again common for this time of year. We’re looking forward to seeing the much-needed new inventory in the coming months!
For the rest of this newsletter, we thought it would be helpful to share some market trends in order to give our readers a bigger picture of the market.
#1 – Interest Rate History
The consensus is that interest rates will likely increase over the next year, possibly to the mid or high 4s. However, if one takes a look at the long-term view of 30-year fixed rate mortgages, we are still at historically low levels (imagine trying to buy a house with rates over 15%!). So it’s still a great time to buy a house even if rates tick up a bit.
#2 – Average Days to Sell
This statistic is an interesting one, in that it gives us an idea of how long it is taking homes to sell. Not surprisingly, the years of the economic recession of 2008-2009 and a little beyond saw periods where it was not unusual for homes to take up to and over two months to sell. In recent years, we’ve been seeing that number go to less than three weeks as a whole, but in the last few months of 2016, we saw those numbers increasing to four and almost five weeks, meaning that it is taking a little longer to sell a house. Indeed, on the ground, we’ve been seeing more listings stay on the market longer and/or going through price reductions, and while attractive listings still garner multiple offers, the number of offers is not as high as it would have been a couple years ago.
#3 – Sale to List Price Ratio
This is a statistic that not many people see, but which can be helpful to buyers and sellers alike. In recent years, this number has gone up as high as over 10% in 2015 (meaning on average, homes were selling for 10% above their list price). It’s interesting to see that sale prices are getting closer to list price as a whole, hovering around 3% over list price for the latter half of 2016. So, if you’re considering buying or selling a home, it’s as important as ever to get educated on your local market and to evaluate the specific property involved.
We want to end this newsletter with an announcement that we’re very excited about. We will be adopting a new name in the coming month, and 8z Real Estate will become Perisson Real Estate!
“Perisson” comes from the Greek for “abundance”, and our company’s vision is for our clients to THRIVE and experience abundance in real estate. We look forward to continuing the same exceptional service that we have been providing to our clients, and wish you all an abundant and prosperous new year!