This is normally the time of year when real estate inventory is at its highest levels. For whatever reason, that’s not happening this quarter.
While inventory is above previous third quarters, it’s surprisingly below last quarter. In fact, inventory has been extremely low now for many years. Perhaps it’s the large number of price reductions, particularly at the high end, that’s causing homes to sell slower this quarter.
As of Sept. 30, there were 90 total listings of which 66 were available and 24 were sale-pending and down from 92 total listings same time last year and 87 total listings back in 2016. Inventory levels are down 2 percent from last year and up 3 percent from two years ago.
There’s not much good news for buyers unless you’re looking for an expensive home. Price reductions are continuing this quarter, representing 28 percent of total listings. Of the 25 homes that have lowered their prices, half are priced over $1.5 million.
Sales has been down for the three previous years but this year so far is running on par to slightly below 2018 levels.
It needs to be pointed out that our sales volume has never rebounded to the levels we saw back in 2004 when volume last peaked.
So, what’s for sale on the coast? Prices of the 90 total listings range from $475,000 for a cottage in La Honda to $17.5 million for a 17,000-square-foot home on 50 acres in Pescadero. Only 1 percent of all listings are priced under $750,000, down from 16 percent in 2017, 22 percent in 2015 and down 27 percent in 2013.
There’s just one lonely listing for sale under $500,000. Between $500,000 and $750,000 there are no listings. Between $750,000 and $1 million there are 19 listings. Between $1 million and $1.5 million there are 29 listings. Between $1.5 million and $2 million there are 24 and there are 22 listings above $2 million.
Looking at inventory by town, the South Coast has 20 total listings, Half Moon Bay has 27 listings, El Granada has 11, Moss Beach has 17, and Montara has 15.
This chart shows available and sale-pending inventory over time. Inventory started to rise from 2006-2010 as prices and volume declined. Inventory then declined as prices and volume started to recover. There also hasn’t been any noticeable change in inventory as the Federal Reserve started cutting rates back in the spring.
The number of homes sale-pending is the best indicator of future activity. Based on that, the fourth quarter looks like it will be strong as the average price of pending sales is above the year to date figures.
Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at (650) 726-6346 or at century21sunset.com