Single Family Residential home in San Mateo County:
Average Sale Price was $2,341,518 (down 27k from July)
Average Days on Market was 23 (previously 20 days in July)
Average Sale Price to List Price Ratio was 101% (previously 103.7% in July)
Average Price/SqFt was $1,106 (previously $1,189 in July)
What We Are Seeing in the Market
"Price is what you pay. Value is what you get." - Warren Buffet
Typically the late summer months see a decrease in new real estate listings while many potential sellers wait to list their home during the fall market. This summer was no different. The typical summer slow-down coupled with one of the busiest summers for travel in history, translated to a quiet real estate market in the Bay Area.
While it's not uncommon for new listings to decrease towards the end of the summer months (July/August), we haven't seen a significant increase in new listings in September, which is uncommon. If you look at the graph below, you can see the typical summer slow down of new listings in late summer, but notice there have been significantly less listings this summer than last summer. **This tells us that many sellers have elected not to put their properties on the market this summer, and we're now waiting to see if this fall's batch of new listings will catch up with 2020-2021. Right now many Bay Area homeowners are enjoying very low interest rates. Choosing to move into a larger home now would mean less competition to purchase, but higher interest rates until inflation improves.
While listings this summer (2022) have been less than in summer (2021), we're seeing properties sit on the market for much longer. A lot of this is likely in anticipation of the Federal Reserve raising interest rates which would be the fourth time this year. CPI numbers didn't improve the way the Fed expected after their July meeting, so they're going to likely increase rates 1/2 - 3/4 of a basis point this week. If you look at the graph below you will see that listings are sitting on the market much longer since the mid summer interest rate hikes.
KEY TAKEAWAYS
For Sellers: Many sellers are electing not to list their property right now if they don't have to. Prices have cooled as buyers lose confidence in the market with rising interest rates. This will likely cause prices to level out, as a lack of inventory puts constant pressure on buyers who seek to purchase real estate. We've seen median single family home prices in San Mateo County fall for the fifth straight month since April 2022. A lack of inventory now will likely cause prices to level off now that new listing inventory is stalling. We've seen median home prices now fall to levels not seen since Q1 2021. See the graph below for San Mateo County median home prices from 2018-Present.
For Buyers: If you want to purchase a new home without as much competition, now is a great time. Be prepared to have higher shorter term interest rates for the first few years. Comparing shorter term Adjustable Rate mortgages to 30 year fixed rates would be a wise decision as we will likely see rates improve in the next few years. Ask the seller to potentially credit closing costs or use the credit to buy down your interest rate to save money in the short term.
If you have questions about the market, or if you have any friends, family, or colleagues that have questions, please don't hesitate to reach out to us for a no pressure, confidential consultation :)
Furthermore, if there is other hard market data you would like to see, please let us know and we would be happy to find it for you.
The Pickett Group
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Client Success - August 2022
2 Bed | 2 Bath | 1,267 SqFt.
Premiere Luxury Condo in Mission Bay, San Francisco!
Contact Caitlin at (650) 576-3994 for additional details.
Fun News
The Pickett Real Estate Group held our 1st Annual San Francisco Giants Client Appreciation Event!
The Giants game was an absolute blast and it was so great to reconnect with everyone! We even got our name on the JUMBOTRON!
Thank you all for making this event so special. It is an honor to serve you.
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