“I will wait until the market cools off”, Whoops!!
Since our recession on 2007, we all know that home prices have recovered and greatly exceeded pre-recession peak levels. Over the years I have helped find homes for many buyers who wished they had bought earlier, but were happy to finally get in the market. Today they are even happier they did, as their equity has grown substantially. I have also encountered several prospective buyers who told me they will wait to buy when the market cools off. I told them all I understand their hopes of a cool off, so as to not have to get into bidding wars and feel like you have to make huge overbids to win. However by 2012 the data showed there were no economic factors looming that would stifle growth. Jobs and wages were growing, interest rates falling and rental rates skyrocketing. A perfect storm for a low inventory market. Thus we ended up seeing record growth year over year, and those who hoped for a “cool off”, unfortunately are now having to pay a huge premium. Today we see many homes sell for near asking price, a bit above or even below. So this would be that period of “cool off” some were waiting for, right? Unfortunately it is not. It is a result of some sellers being overly optimistic and pricing homes too high to begin with. The data is skewed, but bottom line is not. Yes we will have less bidders in these cases, but at the end of the day, those who waited for this “cool off” are still paying a huge premium when simply comparing the year over year numbers. No need to go over the record level changes since 2012, but just going back to Q4’14 vs. Q4’15. Here in the Foster City Audubon area, the median sales price of a single family home grew from $1,475,000 to $1,532,500 ($57,500 increase). For a condo, $660,000 to $703,000 ($43,000 increase). These are conservative increases of 4 and 6.5 percent. However would you want to spend an extra forty to sixty thousand dollars if you did not have to? The long and short of it is, if you wish to buy and have the financial ability to do so, don’t gamble on waiting for the perfect cooling period, instead start realizing the equity gains yourself vs. making it a reality for someone else. Here we are in 2016, and still no economic factors pointing to home prices dropping. Now lets look at some numbers.
Foster City “Audubon” area single family home numbers….
Housing Statistics for Audubon Area (single family homes)
|October 2015||November 2015||December 2015|
|# of New Listings||3||2||0|
|Lowest Priced New Listing||$1,288,000||$1,198,000||na|
|Highest Priced New Listing||$1,688,888||$1,379,000||na|
|Median Price of New Listings||$1,538,000||$1,288,500||na|
|# of Closed Sales||4||2||6|
|Average Days on Market (Closed Sales)||16||22||21|
|Lowest Priced Closed Sale||$1,295,000||$1,450,080||$1,353,000|
|Highest Priced Closed Sale||$1,575,000||$1,985,000||$1,575,000|
|Median Closed Sale Price||$1,462,500||$1,717,540||$1,532,500|
On a month-over-month comparison, sales volume increased compared to November, but at the same time we had no new single family homes go on market due to the holidays. As previously noted, when we compare the numbers month-over-month, keep in mind this low level of activity can obviously skew the “real” averages a bit. Also, the level of inventory dropped even further to just 0.4 months of inventory in December! This number will increase as we get 2016 moving along, but not nearly enough to give buyers many options. The 2016 picture looks like a copy of last year, continued supply and demand imbalance leading to continued price increases, although not nearly as dramatic as 2012-2014 periods of double digit growth.
Enjoy the winter season and stay warm and dry! Chat with you next month.
*Not all properties were listed and/or sold by 8z Real Estate. This data is based on content supplied by REcolorado, IRES, PPAR, and/or MLSListings. Content is deemed reliable but not guaranteed. Content may not reflect all real estate activity in the market.
Call me if you need any assistance in the Audubon area or elsewhere in Foster City. I’d be more than happy to discuss the current market’s activity, show homes from the current inventory and help you with any of your real estate needs in the community. You can always reach me at 650.307.3391 or firstname.lastname@example.org