default avatar
Welcome to the site! Login or Signup below.
|
Not you?||
Logout|My Dashboard

Second quarter was red-hot on Coastside

Print
Font Size:
Default font size
Larger font size

Posted: Wednesday, July 25, 2012 11:12 am

It’s about time! Things took off like a rocket in the second quarter. In fact, the gains were so strong that this is the first year in a long time that prices for the year are actually up. Summarizing the results, prices and sales volume are up, inventory, selling time, distressed sales and mortgage rates are down.

Prices for the second quarter were the highest in years, to the point that it positively impacted the results. The average home price for the coast now stands at $759,000, up 12 percent from the first half of last year and up 7 percent from full-year 2011! Prices ranged from $165,000 for a cottage in La Honda to $2,400,000 for an ocean-view Ocean Colony home. Prices peaked in 2007 at $1,031,000 and are down 26 percent since then.

Sales volume has improved considerably over the past three years, our worst stretch in recent years. A total of 137 homes sold this half compared to 109 homes in 2011, 87 in 2010, 52 in 2009 (our worst year), and 206 in 1999, our best year. Volume is up 26 percent from 2011 but down 33 percent from 1999. Distressed sales accounted for 26 percent of total sales this year, down from 35 percent of total sales last year.

What’s driving the market now is the tight inventory situation. It ended 2011 at a low level and continued to drop throughout the year. As of June 30, there were 134 total listings of which 73 were available and 61 were sale-pending. Inventory has not risen as much as would normally be the case now due to increased volume and cheap mortgages.

With rising volume and low inventory, homes have been selling faster. Average selling time has fallen to 114 days compared to 134 days in 2011, 118 in 2010 and 51 days in 2005. More than a third — 35 percent — of all sales occurred in less than 30 days. Forty-three percent of all sales in 2005 went over list price compared to 9 percent in 2009, 11 percent 2011 and now 20 percent are selling at more than list.

This chart shows average home prices by quarter from 2006 to present. As you can see, prices were high in 2005, dipped in 2006 (Devil’s Slide closure), rebounded in 2007 and have been declining since the beginning of 2008.

Based on what’s sold and sale-pending, I expect the third quarter to show prices below this quarter, inventory still tight and sales volume remaining strong. Let’s hope the second quarter wasn’t a statistical fluke, but the beginning on a nice long-term upward trend.

Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at 726-6346 or at www.century21sunset.com

Welcome to the discussion.

2 comments:

  • Steven Hyman posted at 12:30 pm on Sun, Jul 29, 2012.

    Steven Hyman Posts: 11

    Home prices are low. Infact they are down 26% from the peak in 2007. This year looks like it will be the first year in a long time that prices will be up for the year. What's driving that is the very tight inventory situation and rock bottom interest rates. That's also the same thing that caused the run up in prices from 2003-2007.

    As to the question of affordable housing, that's a relative term and has to be looked at in the context of San Mateo County where the average price is over $900k. Also keep in mind that things are usually a zero sum gain. Same argument can be made for low interest rates. Its great for borrowers but bad for investors. So while you can get a mortgage below 4%, savings account rates are at 0.25%.

    From what I see, I think we have bottomed out and are slowly improving both in prices and volume.

    As to why are low home prices a bad thing? I guess it depends when you bought as to what low is. But for those who bought and refied after 2003, they are losing money, can't refi their homes to take advantage of low rates because their homes are worth the debt. So do they walk away, depressing home prices for entire neighborhoods, destroy their credit.

    One sector that benefited from the low prices, foreclosures and restrictive lending is the rental market. That is very strong with high rents. But for some that's a bad thing too.

     
  • Tyler Durden posted at 9:34 pm on Thu, Jul 26, 2012.

    Tyler Durden Posts: 424

    "...Let’s hope the second quarter wasn’t a statistical fluke, but the beginning on a nice long-term upward trend..."

    Translation: "Let's hope for a return to the good ole days during the bubble when people bought houses at insanely over-inflated prices which of course led to insanely over-inflated commissions for realtors."

    Why are low house prices considered to be a bad thing? Polticians are always crowing about how we need more affordable housing. Lower prices makes for more affordable housing.

     

Recent comments

Posted 9 hours ago by JerryS.

article: Water leak discovered on Terrace Avenue

Wow…was that a STANDARD Empty xx ton MOTOR GRADER heading up Terrace Avenue several days before the water main leak on Terrace?…

More...

Posted 13 hours ago by JerryS.

article: Water leak discovered on Terrace Avenue

All of Silver/ Highland/ Terrace/ Quartz - Approx. 225 families (maybe 350 registered voters) all LOVE IT ! Jerry Steinberg

More...

Posted 14 hours ago by August West.

article: Water leak discovered on Terrace Avenue

Once Pacific Ridge construction begins in earnest, expect more of these. They were warned a long time ago. Terrace residents ar…

More...

Posted 19 hours ago by uffish thought.

article: Protect birds from tsunami sirens

Kudos to Karen Wilson and Katy Tang for acting on this and potentially saving the lives of innumerable nestlings. Well done! …

More...

Connect with us