The year 2019 ended showing signs of softening with minimal price appreciation, price reductions and a small decline in sales volume in terms of local real estate. Despite that, home prices increased to another all-time high.
Sales volume is still way off the highs set back in 2004 and is also below levels in 2014. These factors caused homes to sell slower. All this was happening while the Federal Reserve twice cut interest rates and the stock market had a great year.
Sales volume has never recovered from the levels back in 2004. My guess as to why is a combination of factors, like affordability as prices keep rising and tougher lending regulations. Falling mortgage rates didn’t help either. It’s also possible that the recent changes in the tax laws regarding caps on the deductibility of property and state income taxes could be impacting sales.
Last year, 264 homes sold compared to 267 in 2018, 282 in 2017, 316 in 2014, 151 in 2009 and 429 in 1999 (our best year). Volume still has a long way to go to get back to previous levels.
This chart shows how many homes sold by price category since 2000. Homes under $1 million made up the bulk of the sales until 2015. Conversely, prices above $1 million became more commonplace as prices recovered from the recession and today make up the majority of the sales.
The number of home sales under $1 million dropped dramatically over time. In 2000, 87 percent of all sales were in this category while now it represents only 23 percent.
The percent of sales in the $1 million to $1,499,999 increased during this period as prices rose. Today, 50 percent of all sales are in this category compared to 8 percent back in 2000.
Home prices above $1.5 million hit a record high in 2018 totaling 73 (71 in 2019) compared to 50 in 2015, 35 in 2014, four in 2009 and 37 in 2005. Now, 27 percent of all sales are over $1.5 million while it was 6 percent in 2000.
As I’ve been saying for many years, your housing money goes farther here than in other parts of our expensive county. Alternatively, the cheapest home in Atherton sold for $1.9 million (1705 square feet). And the most expensive home sale last year also sold in Atherton, a modest 12,494-square-foot custom built home on one acre for only $25 million! Sure wish I sold that.
Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at 726-6346 or at century21sunset.com.