The year ended with somewhat of a mixed bag. Some indicators were positive and others negative. Home prices hit an all-time high, although appreciation was half of what it was the previous year. Sales volume was slightly down. Price increases were becoming noticeable in certain segments. Inventory is tight. Mortgage rates rose. The stock market declined.
The fourth quarter was a barn burner with prices hitting the second highest level ever. That pushed the average home price on the Coastside to an all-time high of over $1.12 million, up 9 percent from 2014. Prices ranged from $275,000 for a cottage in La Honda to $3.8 million for two different South Coast properties.
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, except for last year. In 2015, 296 homes sold compared to 315 in 2014, 288 in 2012, 151 in 2009, and 429 in 1999, our best year. Volume is down 6 percent from 2014 and down 31percent from 1999.
Inventory started to rise in 2005 as volume dropped, and has declined since 2010 as home sales improved. Now inventory levels are the lowest they’ve ever been (in recent years). The shortage caused multiple offers throughout the year, especially at the lower end of the market. As of Dec. 31, there were only 51 total listings (down 4 percent from 2014) of which 35 were available. List prices range from $299,000 for a cottage in La Honda to $6.2 million for an 80-acre ranch in Pescadero.
The combination of all these factors contributed to a quicker selling time — 49 days compared to 59 days in 2014, 94 days in 2012, 134 days in 2009 and 57 days in 2004. Sixty-five precent of all sales occurred in less than 30 days and 43 percent of all sales went over list price. Distressed sales (short sales and REOs) have become an insignificant part of the market, accounting for just 1 percent of total sales in 2015 versus 5 percent in 2014, 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 57 percent with big increases in the past four years. The Dow Jones has done a little better over this period being up 66 percent.