Mid Peninsula - Intero Real Estate Market Report - December 2015

A Berkshire Hathaway Affiliate

Buy.Sell.Stay.

December 2015 Market Report Mid Peninsula Menlo Park, Woodside, Palo Alto, Atherton Los Altos, Los Altos Hills

Agent Name, REALTOR速

Agent Name, REALTOR速

EMAIL

EMAIL

PHONE

PHONE

www.AgentWebsite.com

www.AgentWebsite.com

LIC.#

LIC.#

2016 Intero Real Estate Services Inc., a Berkshire Hathaway affiliate and a wholly owned subsidiary of HomeServices of America, Inc. All rights reserved.

Data provided by Trendgraphix Januray 2016.. All information deemed reliable but not guaranteed. This is not intended as a solicitation if you are listed with another broker.

Executive Insights Introducing Intero Real Estate’s December 2015 Mid Peninsula Market Report The Bay Area tends to have, by and large, the reputation of being an expensive and even impossible place to live. The stereotype is consistent: unless you’re in the tech industry (and even if you’re in the tech industry), or very wealthy, you’re going to have a hard time living in the Bay Area.

While it’s true that the tech industry is largely responsible for the Bay Area’s high cost of living, it’s not true that the Bay Area is exclusively for the wealthy. The tech industry, in fact, has provided an affluence of jobs, causing the area to exist in an excellent state of financial self-sustainment. As Intero’s CEO and President Tom Tognoli puts it, “A strong tech market that has been fueled by an accommodative money supply and historically low interest rates has made the Bay Area the envy of the world.”

According to the California Association of Realtors (C.A.R.), California as a whole should see an increase in existing home sales of 6.3% in 2016, reaching up to 433,000 homes. “Solid job growth and favorable interest rates will drive a strong demand for housing next year,” said C.A.R. President Chris Kutzkey.

As far as solid job growth goes, the Bay Area is the place to be, with the added bonus of income growth as well. As the area continues to be populated by more and more successful companies, in addition to expansions from our tried and true tech giants (Google, Apple, eBay, Facebook, etc.), more and more jobs are being created. As such, more and more people are looking for homes.

According to REALTOR ® Mag, millennials (defined as 25-34 years old) are expected to make up 30% of the existing home market. As the Bay Area’s tech industry is largely populated by employed millennials, the area should see in a significant increase in home sales from millennials alone. Income growth and job security are probable factors in this, as well as the knowledge that owning a home is likely more financially sound than renting. In fact, we believe that 2016 will yield a significant increase in renters choosing to become homeowners.

Tognoli weighs in on this as well: “Even as much as home prices have appreciated over the last several years, it’s still much cheaper to own than to rent when you take into consideration the tax write off. Even if a home did not appreciate a nickel, it’s still smarter to own than rent if you can qualify.”

Now that we’ve given you some background, we’d like to give you a closer look at the most prominent trends that have defined the Mid-Peninsula housing market. The market is constantly shifting in small yet meaningful ways, and we want make sure you always have the most accurate and up to date insights possible. The following pages will utilize market data to illustrate these changes and trends; more specifically, we’ve analyzed inventory, pricing, and how long homes have been on the market.

We get that data can be a lot to sift through, which is why we did it for you. Whether you want to buy, sell, or stay, reading this report will give you the knowledge to make informed decisions every step of the way.

Market Highlights Mid Peninsula

Total Homes for Sale

68

Luxury Homes for Sale*

49

*Homes for sale above $3 million.

Total Homes Sold

Days on Market

Average List Price

Average Sold Price

75

$7,490,000

34

$3,050,000

Inventory Mid Peninsula

Total Number Of Homes:

For Sale

Sold 200

200

130

150

66

60

46

40

68 75

77

82

99

92

124

145 116

131

151 138

130

138 86

80

108

105

100 97

100

68

120

146 140

140

166

160

158

185

180

20 0

14-Oct

14-Nov

14-Dec

15-Jan

15-Feb

15-Mar

15-Apr

15-May

15-Jun

15-Jul

15-Aug

15-Sep

15-Oct

15-Nov

15-Dec

Congratulations sellers! It’s a great market!

Total property sales in December were slightly lower than this time last year, as well as this time the previous month. This is to be expected at this time of year, though, as people tend to be less focused on their home searches and instead busy with family, vacationing, traveling, or participating in other holiday activities.

The holiday season is historically slower than the rest of the year when it comes to home sales, as families want to enjoy the holidays without being disturbed.

As a result, the total number of homes available in December was down by a substantial 47.7% compared to the previous month, but very slightly up compared to this time last year. This smaller inventory means that buyers who have been waiting to buy will have fewer homes to choose from, which is great news for sellers!

Sellers also had the upper hand in the luxury market.

The total number of luxury homes available in December was slightly higher than this time last year, indicating overall growth, which is good news for buyers; however, homes available was a substantial 46.7% lower than this time the previous month.

This gainful time for sellers was likely due to the holiday season, a time when the number of houses on the market typically hit their lowest point of the year. Either way, sellers should take advantage!

Inventory By The Numbers Home Price Range

Homes For Sale

Year Over Year % Difference

< $500K

0

N/A

$500K $1M

1

-50.00%

$1M - $3M

18

-10.00%

$3M - $5M

12

-20.00%

$5M - $10M

19

11.80%

$10M +

18

50.00%

Pricing Mid Peninsula

Average Prices in $,000:

Sold Price

Active Price

8000

$7,490

7000 6000

$5,799

$6,148

$5,996 $6,096

$6,039

$5,781 $5,716

$5,832

$6,221 $6,183 $5,694

$5,892

$6,202

$5,187

5000 4000 3000 2000

$2,704

$2,858

$3,206

$3,596 $3,171

$3,374 $3,285 $3,210

$3,526 $3,072 $3,123

$3,350

$3,045

$3,340

$3,050

1000 0

14-Oct

14-Nov

14-Dec

15-Jan

15-Feb

15-Mar

15-Apr

15-May

15-Jun

15-Jul

15-Aug

15-Sep

15-Oct

15-Nov

15-Dec

Good News!

The average “For Sale” price increased in December to $7,490,000. This is a considerable increase compared to last year, and to the previous month, which is excellent news for sellers!

Pricing By The Numbers

This increase in “For Sale” pricing doesn’t necessarily need to be foreboding for buyers. The average “Sold” price actually decreased slightly from this time last year and this time the previous month, at $3,050,000. That’s a pretty significant difference between “For Sale” and “Sold” average prices, which means that there’s always room for negotiation, something both buyers and sellers should keep in mind.

Average Price Per Square Foot.

According to C.A.R. (California Association of Realtors), another positive to consider is the potential for job and income growth in the Silicon Valley area. This is good for both sellers and buyers, as more and more workers will be able to afford making the leap from renting to owning. And as the area becomes more densely populated, people will be buying homes in farther surrounding areas.

$1,095 -14.3% Month over Month

On The Market Mid Peninsula

Average Days On Market 45

41

40 34

35

34

30 25

23

23

22

23 18

20

19

21

22

22

22

19 16

15 10 5 0 14-Oct

14-Nov

14-Dec

15-Jan

15-Feb

15-Mar

15-Apr

15-May

15-Jun

15-Jul

15-Aug

15-Sep

15-Oct

15-Nov

15-Dec

Favorable For Sellers!

The average Days on Market (DOM) shows, on average, how long properties are on the market before they sell. An upward trend (longer time on the market) indicates a move in favor of buyers, whereas a downward trend (shorter time on the market) indicates a move in favor of sellers.

DOM By The Numbers

The DOM showed a generally upward trend for December; the average DOM was 34 days, a sizeable 54.5% increase from the previous month, and exactly the same as this time last year.

Home Price Range

Days on Market

Year Over Year % Difference

< $500K

0

N/A

Buyers, this is good news for you! The longer a house is on the market, the more likely it is that there will be room for negotiation, or lowered prices. Sellers should not be discouraged, though! Itâ&#x20AC;&#x2122;s quite common for a house to be on the market for at least a month.

$500K $1M

39

-18%

$1M - $3M

22

5%

$3M - $5M

30

17%

$5M - $10M

104

72%

$10M +

221

100%