All the stars seemed to have lined up right for Coastside real estate this year. Prices have shot up over the past few years. It’s nice to be able to say that after the tough times. Prices, volume and selling time are up. Mortgage rates, inventory and distressed sales are down. And the stock market ended the year at an all time high.
The fourth quarter was a barn burner with prices hitting the second-highest level ever. The average home price for the coast now stands at more than $1,027,000, up 18 percent from 2013 but down just 1 percent from the record level in 2005. Prices ranged from $130,000 for a cottage at Martin’s Beach on leased land to $3.5 million for an oceanfront home in Moss Beach.
Sales volume peaked in 2004, and while improving, it’s still way off those levels. It hit bottom in 2009 and has been increasing every year since then. In 2014, 315 homes sold compared to 308 in 2013, 288 in 2012, 151 in 2009 and 429 in 1999, our best year. Volume is up 2 percent from 2013 but down 27 percent from 1999.
Inventory started to rise in 2005 as volume dropped. Inventory has declined since 2010 as home sales improved. Now inventory levels are the lowest they’ve been in recent years and the shortage caused multiple offers throughout the year. As of Dec. 31, there were only 53 total listings (down 37 percent from 2013) of which 32 were available. List prices range from $399,000 for a cottage in Pescadero to $3.5 million for a Half Moon Bay oceanfront home on 25 acres.
The combination of all these factors contributed to a quicker selling time. It is now at 59 days compared to 94 days in 2012, 134 days in 2009 and 57 days in 2004. Forty-five percent of all sales occurred in less than 30 days and 31 percent of all sales went over list price. Distressed sales (short sales and real estate-owned properties) have become a less significant part of the market, accounting for just 5 percent of total sales in 2014 versus 10 percent in 2013, 24 percent in 2012 and 31 percent in 2011.
This chart shows average home prices and unit volume from 2000 to present. Over this period, prices increased by 43 percent with big increases in the past three years. The Dow Jones has done much better over this period, being up 81 percent.
Steven Hyman is the broker and owner of Century 21 Sunset Properties. He has a master’s degree in international finance and a bachelor’s degree in economics. He can be reached at 726-6346 or at www.century21sunset.com