MARKET
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San Mateo Real Estate
7 Months after the Pandemic Hit
October 2020 Report
The table below compares Q3 statistics across 5 years. Three charts further down we will discuss one of the dynamics behind the huge year-over-year increase in median house sales price.
https://www.bayareamarketreports.com/trend/san-mateo-home-prices-market-trends-news
7 Months after the Pandemic Hit
October 2020 Report
The table below compares Q3 statistics across 5 years. Three charts further down we will discuss one of the dynamics behind the huge year-over-year increase in median house sales price.
https://www.bayareamarketreports.com/trend/san-mateo-home-prices-market-trends-news
Y-o-Y Q3 Comparisons
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Median House & Condo Sales Prices by Quarter
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BIZ & TECH // NET WORTH - KATHLEEN PENDER
California home prices to grow more slowly next year, Realtors forecast, but sales may be stronger
California home prices to grow more slowly next year, Realtors forecast, but sales may be stronger
Kathleen Pender Oct. 13, 2020 Updated: Oct. 13, 2020 6:38 p.m.
Ultra-low mortgage rates and pent-up demand for single-family homes will offset continued economic uncertainty and a supply shortage in 2021, with the net result being a 3.3% increase in California home sales and a modest 1.3% increase in the median price next year versus 2020, according to a California Association of Realtors forecast published Tuesday.
With only a few months left to go, sales this year are expected to be 4.5% lower than last year but prices are likely to be 8.1% higher. Last year at this time, the association predicted that 2020 sales would increase 0.8% and prices would rise 2.5%, but that was before the coronavirus pandemic upended forecasts of all kinds.
Sales this year were weaker than expected mainly because shelter-in-place orders brought the real estate market to a near standstill for several months starting in March, although sales have since rebounded.
“Prices were a lot stronger (than anticipated) because we were not forecasting mortgage rates to go down to 2.8%,” said Jordan Levine, the association’s deputy chief economist.
Some of this year’s price increase was driven by sales of luxury and second homes. The median is the price at which half of homes sold for more and half for less, and can be influenced by a change in the mix of high- and low-end homes being sold. Robust sales of multimillion-dollar homes are “pumping up the median price,” Levine said. “The stock market came back a lot faster than the labor market. That enabled a quicker recovery at the upper end.”
It’s more evidence that pandemic “really had a disproportionate impact. People in professional services tend to be higher-income individuals and were able to carry on” better than people in lower-paying occupations.
In 2021, “we do expect the market to shift more toward owner-occupant, entry-level homes,” Levine said. That’s why price gains next year will be “a little more muted” than this year.
Rising interest rates could threaten affordability, but the association predicts that 30-year fixed mortgage rates will average 3.1% in 2021, down from 3.2% in 2020 and from 3.9% in 2019, and still low by historical standards.
The association’s forecast covers existing single-family homes, not condos or new construction. It did not break out forecasts for regions within the state, but San Francisco is expected to be the strongest in the state, according to Selma Hepp, deputy chief economist with CoreLogic.
She predicted that between August 2020 and August 2021, the median price of existing, single-family homes and condos will rise 7.8% in San Francisco and San Mateo counties, 6.9% in Santa Clara and San Benito counties, 4.5% in Alameda and Contra Costa counties, 2% in Marin County, 13.2% in Napa County and 0.6% in Sonoma County.
By comparison, she expects prices will be 5% higher throughout California and flat nationwide.
One reason the Bay Area will do better than most is because it has a lower percentage of homes in forbearance and higher average homeowner equity than most places.
Homeowners with government-backed mortgages who have a financial hardship because of the coronavirus can request a forbearance, which allows them to postpone payments, without incurring penalties, for up to 12 months. Next year, as their forbearance period expires, many will be able to work out a modification and keep their homes, but if they can’t, some may be forced to sell and that could put downward pressure on prices.
The more equity they have in their homes, the more options they will have, such as refinancing, Hepp said. The average homeowner equity in San Francisco and San Mateo counties is just over $1 million, she said. The statewide average in the second quarter of this year was $408,000, second only to Hawaii with $450,000 in average homeowner equity. The U.S. average was $185,000.
In September, economists with the UCLA Anderson School of Management said construction of new housing will be an area “of particular strength” in the California economy next year. They predicted “a quick recovery to pre-recession levels, with residential building permits almost back to their 2020 first quarter level by year’s end.”
Jerry Nickelsburg, director of the UCLA Anderson Forecast, said low interest rates, the state’s chronic housing shortage, pent-up demand and “some movement on the regulatory side,” making it easier to build new units, will encourage developers to build. By the fourth quarter of 2022, he expects permit issuance, for rental and owner-occupied housing statewide, will hit 130,000 units on an annualized basis, compared with an estimated 117,400 units at the end of this year and 110,000 units at the end of last year. That increase of about 12,600 units over the next two years includes the replacement of some homes destroyed by wildfires.
“That means an increase in demand for construction workers. That is a bright spot when some of our sectors that are lagging behind,” Nickelsburg said. “It’s not a barn-burner, but it’s a bright spot.”
Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender
With only a few months left to go, sales this year are expected to be 4.5% lower than last year but prices are likely to be 8.1% higher. Last year at this time, the association predicted that 2020 sales would increase 0.8% and prices would rise 2.5%, but that was before the coronavirus pandemic upended forecasts of all kinds.
Sales this year were weaker than expected mainly because shelter-in-place orders brought the real estate market to a near standstill for several months starting in March, although sales have since rebounded.
“Prices were a lot stronger (than anticipated) because we were not forecasting mortgage rates to go down to 2.8%,” said Jordan Levine, the association’s deputy chief economist.
Some of this year’s price increase was driven by sales of luxury and second homes. The median is the price at which half of homes sold for more and half for less, and can be influenced by a change in the mix of high- and low-end homes being sold. Robust sales of multimillion-dollar homes are “pumping up the median price,” Levine said. “The stock market came back a lot faster than the labor market. That enabled a quicker recovery at the upper end.”
It’s more evidence that pandemic “really had a disproportionate impact. People in professional services tend to be higher-income individuals and were able to carry on” better than people in lower-paying occupations.
In 2021, “we do expect the market to shift more toward owner-occupant, entry-level homes,” Levine said. That’s why price gains next year will be “a little more muted” than this year.
Rising interest rates could threaten affordability, but the association predicts that 30-year fixed mortgage rates will average 3.1% in 2021, down from 3.2% in 2020 and from 3.9% in 2019, and still low by historical standards.
The association’s forecast covers existing single-family homes, not condos or new construction. It did not break out forecasts for regions within the state, but San Francisco is expected to be the strongest in the state, according to Selma Hepp, deputy chief economist with CoreLogic.
She predicted that between August 2020 and August 2021, the median price of existing, single-family homes and condos will rise 7.8% in San Francisco and San Mateo counties, 6.9% in Santa Clara and San Benito counties, 4.5% in Alameda and Contra Costa counties, 2% in Marin County, 13.2% in Napa County and 0.6% in Sonoma County.
By comparison, she expects prices will be 5% higher throughout California and flat nationwide.
One reason the Bay Area will do better than most is because it has a lower percentage of homes in forbearance and higher average homeowner equity than most places.
Homeowners with government-backed mortgages who have a financial hardship because of the coronavirus can request a forbearance, which allows them to postpone payments, without incurring penalties, for up to 12 months. Next year, as their forbearance period expires, many will be able to work out a modification and keep their homes, but if they can’t, some may be forced to sell and that could put downward pressure on prices.
The more equity they have in their homes, the more options they will have, such as refinancing, Hepp said. The average homeowner equity in San Francisco and San Mateo counties is just over $1 million, she said. The statewide average in the second quarter of this year was $408,000, second only to Hawaii with $450,000 in average homeowner equity. The U.S. average was $185,000.
In September, economists with the UCLA Anderson School of Management said construction of new housing will be an area “of particular strength” in the California economy next year. They predicted “a quick recovery to pre-recession levels, with residential building permits almost back to their 2020 first quarter level by year’s end.”
Jerry Nickelsburg, director of the UCLA Anderson Forecast, said low interest rates, the state’s chronic housing shortage, pent-up demand and “some movement on the regulatory side,” making it easier to build new units, will encourage developers to build. By the fourth quarter of 2022, he expects permit issuance, for rental and owner-occupied housing statewide, will hit 130,000 units on an annualized basis, compared with an estimated 117,400 units at the end of this year and 110,000 units at the end of last year. That increase of about 12,600 units over the next two years includes the replacement of some homes destroyed by wildfires.
“That means an increase in demand for construction workers. That is a bright spot when some of our sectors that are lagging behind,” Nickelsburg said. “It’s not a barn-burner, but it’s a bright spot.”
Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender
Compass CEO: Seeing a Rebound in Residential Real Estate
May 20, 2020
During these ever-changing times, it’s my goal to keep you informed and up to date on the latest trends we’re seeing in the housing market. Our CEO Robert Reffkin, told CNBC that while this is unprecedented, there are clear signs that the market is rebounding, and will continue to rebound.
Robert shared that across our 135 markets, we saw real estate activity bottoming out 2-3 weeks ago. We have seen the number of in-contract homes bounce back to pre-COVID levels in over 90% of those markets. We are hopeful this rebound will soon be replicated in areas where stay-at-home orders have not yet been lifted.
In the midst of uncertainty, I am proud that we’re able to successfully help our clients buy and sell homes with our suite of Virtual Agent Services. If you are in need of real estate services, or know someone who is, please don’t hesitate to reach out.
During these ever-changing times, it’s my goal to keep you informed and up to date on the latest trends we’re seeing in the housing market. Our CEO Robert Reffkin, told CNBC that while this is unprecedented, there are clear signs that the market is rebounding, and will continue to rebound.
Robert shared that across our 135 markets, we saw real estate activity bottoming out 2-3 weeks ago. We have seen the number of in-contract homes bounce back to pre-COVID levels in over 90% of those markets. We are hopeful this rebound will soon be replicated in areas where stay-at-home orders have not yet been lifted.
In the midst of uncertainty, I am proud that we’re able to successfully help our clients buy and sell homes with our suite of Virtual Agent Services. If you are in need of real estate services, or know someone who is, please don’t hesitate to reach out.
Real Estate Restrictions Relaxed in Updated County Order
Gina Zari, Government Affairs Director | April 29, 2020
On April 29, the County of San Mateo Health Officer announced a revised shelter-in-place order that will go into effect on May 4. The revised Order relaxes restrictions on real estate transactions, including allowing people "to move residences."
Health Officer Order c19-5c (Revised)
The most relevant portions include:
2. This Order allows a limited number of additional essential and outdoor business activities to resume while the Health Officer continues to assess the transmissibility and clinical severity of COVID19 and monitors indicators described in Section 11.
16(a). For the purposes of this Order, individuals may leave their residence only to perform the following "Essential Activities."
16(a)(vii). To move residences. When moving into or out of the Bay Area region, individuals are strongly urged to quarantine for 14 days. To quarantine, individuals should follow the guidance of the United States Centers for Disease Control and Prevention.
16(f)(x). Service providers that enable real estate transactions (including rentals, leases, and home sales), including, but not limited to, real estate agents, escrow agents, notaries, and title companies, provided that appointments and other residential real estate viewings must only occur virtually or, if a virtual viewing is not feasible, by appointment with no more than two visitors at a time residing within the same household or living unit and one individual showing the unit (except that in person visits are not allowed when the occupant is present in the residence);
16(f)(xviii). Businesses that supply other Essential Businesses with the support or supplies necessary to operate, but only to the extent that they support or supply these Essential Businesses.
19. This Order shall become effective at 11:59 p.m. on May 3, 2020 and will continue to be in effect until 11:59 p.m. on May 31, 2020
The revised Order allows for viewings of occupied homes, as long as the resident is not present and the home is only viewed by one or two people at a time from the same household with the real estate agent present. All social distancing protocol must be followed—face covering must be worn and six feet must separate people at all times
Gina Zari, Government Affairs Director | April 29, 2020
On April 29, the County of San Mateo Health Officer announced a revised shelter-in-place order that will go into effect on May 4. The revised Order relaxes restrictions on real estate transactions, including allowing people "to move residences."
Health Officer Order c19-5c (Revised)
The most relevant portions include:
2. This Order allows a limited number of additional essential and outdoor business activities to resume while the Health Officer continues to assess the transmissibility and clinical severity of COVID19 and monitors indicators described in Section 11.
16(a). For the purposes of this Order, individuals may leave their residence only to perform the following "Essential Activities."
16(a)(vii). To move residences. When moving into or out of the Bay Area region, individuals are strongly urged to quarantine for 14 days. To quarantine, individuals should follow the guidance of the United States Centers for Disease Control and Prevention.
16(f)(x). Service providers that enable real estate transactions (including rentals, leases, and home sales), including, but not limited to, real estate agents, escrow agents, notaries, and title companies, provided that appointments and other residential real estate viewings must only occur virtually or, if a virtual viewing is not feasible, by appointment with no more than two visitors at a time residing within the same household or living unit and one individual showing the unit (except that in person visits are not allowed when the occupant is present in the residence);
16(f)(xviii). Businesses that supply other Essential Businesses with the support or supplies necessary to operate, but only to the extent that they support or supply these Essential Businesses.
19. This Order shall become effective at 11:59 p.m. on May 3, 2020 and will continue to be in effect until 11:59 p.m. on May 31, 2020
The revised Order allows for viewings of occupied homes, as long as the resident is not present and the home is only viewed by one or two people at a time from the same household with the real estate agent present. All social distancing protocol must be followed—face covering must be worn and six feet must separate people at all times
Looking to the Future: What the Experts Are Saying
4/2/2020
As our lives, our businesses, and the world we live in change day by day, we’re all left wondering how long this will last. How long will we feel the effects of the coronavirus? How deep will the impact go? The human toll may forever change families, but the economic impact will rebound with a cycle of downturn followed by economic expansion like we’ve seen play out in the U.S. economy many times over.
Here’s a look at what leading experts and current research indicate about the economic impact we’ll likely see as a result of the coronavirus. It starts with a forecast of U.S. Gross Domestic Product (GDP).
According to Investopedia:
“Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country’s economic health.”
When looking at GDP (the measure of our country’s economic health), a survey of three leading financial institutions shows a projected sharp decline followed by a steep rebound in the second half of this year:
Here’s a look at what leading experts and current research indicate about the economic impact we’ll likely see as a result of the coronavirus. It starts with a forecast of U.S. Gross Domestic Product (GDP).
According to Investopedia:
“Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country’s economic health.”
When looking at GDP (the measure of our country’s economic health), a survey of three leading financial institutions shows a projected sharp decline followed by a steep rebound in the second half of this year:
A recent study from John Burns Consulting also notes that past pandemics have also created V-Shaped Economic Recoveries like the ones noted above, and they had minimal impact on housing prices. This certainly gives hope and optimism for what is to come as the crisis passes.
With this historical analysis in mind, many business owners are also optimistic for a bright economic return. A recent PricewaterhouseCoopers survey shows this confidence, noting 66% of surveyed business owners feel their companies will return to normal business rhythms within a month of the pandemic passing, and 90% feel they should be back to normal operation 1 to 3 months after:
With this historical analysis in mind, many business owners are also optimistic for a bright economic return. A recent PricewaterhouseCoopers survey shows this confidence, noting 66% of surveyed business owners feel their companies will return to normal business rhythms within a month of the pandemic passing, and 90% feel they should be back to normal operation 1 to 3 months after:
From expert financial institutions to business leaders across the country, we can clearly see that the anticipation of a quick return to normal once the current crisis subsides is not too far away. In essence, this won’t last forever, and we will get back to growth-mode. We’ve got this.
Bottom Line
Lives and businesses are being impacted by the coronavirus, but experts do see a light at the end of the tunnel. As the economy slows down due to the health crisis, we can take guidance and advice from experts that this too will pass.
Bottom Line
Lives and businesses are being impacted by the coronavirus, but experts do see a light at the end of the tunnel. As the economy slows down due to the health crisis, we can take guidance and advice from experts that this too will pass.
03/26/2020
What the Experts Are Saying About the Market
With so much changing in today's market, it's important to know what the experts are saying. Let's connect to discuss how these changes may impact you.
Watch Now
What the Experts Are Saying About the Market
With so much changing in today's market, it's important to know what the experts are saying. Let's connect to discuss how these changes may impact you.
Watch Now
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Laura's Blog: 10/21/2019
Into the 4th Quarter we go, finishing up the year and preparing for 2020 and all its unpredictabilities. No one knows for sure when the next recession will occur. What is known, however, is that the upcoming economic slowdown will not be caused by a housing market crash, as was the case in 2008. There are those who disagree and are comparing today’s real estate market to the market in 2005-2006, which preceded the crash. In many ways, however, the market is very different now. The equation to determine affordability has three elements: home prices, wages, AND MORTGAGE INTEREST RATES. Today, the mortgage rate is about 3.5% versus 6.41% in 2006. It is true that home values sank by almost 20% during the 2008 recession. However, it is also true that in the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6%. Price is determined by supply and demand. In 2008, there was an overabundance of housing inventory (a 9-month supply). Today, housing inventory is less than half of that (a 4-month supply). We need to realize that today’s real estate market is nothing like the 2008 market. Therefore, when a recession occurs, it won’t resemble the last one. |
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Laura's Blog: 7/21/2019
We are at the end of the 2nd Quarter, well into the 3rd quarter in the summer of 2019. With summer vacations and the economic changes, the housing market is showing a slowdown. There aren't as many multiple offers, buyers are taking their time, houses are on the market for longer periods of time, and although there are new homes on the market, price reductions are not uncommon. The good thing to note is that mortgage rates are great! It's a great time to re-fi, and it gives buyers more buying power. Maybe there will be more movement as the end of July and beginning of August approach, as summer winds down and families return from vacation and get ready for the start of the school year in mid-August. |
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Laura's Blog 4/1/2019:
2019 is showing great promise as we closed out our first quarter. Inventory is up, more homes have been sold, and homes are selling more quickly. There is good movement and it's exciting to see new listings enter the market daily. Tuesday broker tours are also fun in the May rain! |
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