2015 was a year that had a little of everything to make most people happy. Sellers were happy to see home prices hit an all-time high. Buyers were happy to see price reductions take place. Bankers were happy to raise borrowing rates. Realtors were happy to see higher commissions, even if there were fewer of them. While volume has been rising for many years, 2015 actually saw a modest drop. Sales volume is down 6 percent from 2014 and it’s still down by 26 percent from 2004 (last peak) and down 31 percent from our all-time high back in 1999.
A question you may have is why did home prices go up less this year and why did volume drop? A combination of factors was at play. Home prices hit new all-time highs, stretching affordability, and that combined with record low inventory levels and rising mortgage rates.
Last year, 296 homes sold compared to 316 in 2014, 288 in 2012, 151 in 2009, and 429 in 1999 (our best year). Volume still has a way to go to get back to previous levels.
This chart shows how many homes sold by price category since 2000. Up until 2008, homes under $500,000 were hard to find. That all changed with more foreclosures at the low end. Also million-dollar homes were on the rise up until 2009, but that changed too as financing for expensive homes became more difficult.
The number of home sales under $500,000 dropped dramatically over time, increased from 2009-2011, and fell again as prices rose. In 2000, 29 percent of all sales were in this category while now it represents only 3 percent of the total.
The percent of sales in the $500,000 to $999,999 range has also dropped during this period as prices rose. Today, 46 percent of all sales are in this category compared to 60 percent back in 2000.
Million-dollar home sales hit a record high in 2015, totaling 151 compared to121 in 2014, 24 in 2009 and 113 in 2005. Now, 51 percent of all sales are over $1 million while it was 14 percent in 2000.
As I’ve been saying for many years, your housing money goes further here than in other parts of our expensive county. Alternatively, the cheapest home in Atherton sold for $1.7 million (just 932 square feet). And the most expensive home sale last year also sold in Atherton. A modest 20,375 square feet of brand-new construction on 1.9 acres for only $35.3 million! Sure wished I sold that.