Who would have thought that real estate would take off in the middle of a pandemic?
Certainly not me. But as people in large cities fled to smaller communities, home prices went up in many areas. On the coast, home prices shot up 15 percent in 2020 and this year are up an additional 8 percent. What’s fueling this is the combination of low inventory, hot stock and job markets in certain industries, and low interest rates.
2021 is going to be another record-breaker for home prices. The nine-month average home price for the coast now stands at $1,664,000 (and the median price is $1,510,000), up 7 percent from the comparable period last year and up 8 percent from full year 2020. Sales prices range from $580,000 for a 625-square-foot cottage in Pescadero to $5 million for a half-acre oceanfront home in Montara.
Sales volume has been the strongest we’ve seen in many years, although it’s still way down from our all-time high in 1999. In all, 233 homes sold this year compared to 197 in 2020, 96 homes in 2009 (our worst recent year) and 305 in 1999. Volume is up 18 percent from 2020 and down 24 percent from 1999.
Inventory has been low for years but dropped in 2020 and even more so this year. As of Sept. 30, there were 63 total listings of which 31 were available, down 31 percent from last year.
All of the above caused the days on the market for homes to decline to its lowest level in 20 years. Average selling time has fallen to 24 days. Eighty-two percent of all sales occurred in less than 30 days and 65 percent sold over list price. In total, homes sold for 104 percent of list price.
This chart shows average home prices by quarter from 2007 to present. As you can see, prices took off from 2020 on, and this quarter, prices are through the roof! I expect the year to end very strong.
Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at 726-6346 or at century21sunset.com.