Sales & Values by City and Price Segment, Market Seasonality, Market Dynamics by City, Luxury Home Sales, Foreign Homebuyers
| The May Case-Shiller Home Price Index was released in late July for the 5-county SF metro area. This chart illustrates the difference in appreciation rates between the Bay Area (higher price markets) and the entire country. Case-Shiller does not use median sales prices but its own algorithm to calculate appreciation. January 2000 home price = 100; 250 = a home price 150% above that of Jan. 2000. |
Needless to say, there are many factors behind home sales and values in different communities. Home size is one of them, and median sales prices are not apples to apples comparisons: For example, in Atherton, the median house is over 4000 square feet, while in East Palo Alto, it is approximately 1300 square feet.
Note that median sales prices often peak for the year in Q2.
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Home Sales by Price Range
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Average Dollar per Square Foot Values
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| All things being equal (which they rarely are), a smaller home will sell for a higher dollar per square foot value. However, Atherton has the highest median home size (and price) and the highest dollar per square foot value. It probably has the largest average lot size as well – which is another big factor. |
| Menlo Park and Hillsborough dominate home sales of $3 million and above in San Mateo County, but Atherton – the most expensive city in the Bay Area – dominates home sales at the very highest prices. |
| The luxury home market is even more affected by seasonality than the general market (which is discussed later in this report). September typically sees a large surge in new listings which fuels the autumn selling season. High-price homes that don’t sell by Thanksgiving are often then pulled off the market to wait for the winter holiday season to pass. |
Market Indicators by City
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| Two things should be kept in mind regarding the next 3 charts: 1) Q2 is often the highest demand market of the year, which will be reflected in the statistics illustrated, and 2) It is not unusual for higher price markets to have softer demand dynamics than more affordable areas. Needless to say, there are many fewer buyers for the most expensive homes, but also, overpricing is a more common issue with such homes. Still, in every city and price segment, there are homes that sell very quickly, homes that go through price reductions, and homes that don’t sell at all. |
Market Seasonality: The Autumn Spike,
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| Market activity usually slows during the late summer months, then spikes back up for the relatively short autumn selling season. This typically begins with a surge of new listings coming on market in September. Come mid-November, activity commonly plunges for the winter holidays, and the market won’t wake up until late January or February – though homes continue to sell in every season. |
Foreign National Home Buying Tumbles
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| According to a new report by the National Association of Realtors – based on a survey of its member agents – the purchase of U.S. homes by foreign nationals plunged in the 12 months through March 2019. The drop was particularly steep for Chinese nationals, for whom California has been the top destination. |
Stock Market Hits New High
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| The last 12 months have been an extremely dramatic time for financial markets as illustrated below. The alternating confidence and fear generated by its swings have been considerable factors in Bay Area real estate markets. A parallel dynamic has occurred with the swings in interest rates. |
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Source: Compass
It is impossible to know how median and average value statistics apply to any particular home without a specific comparative market analysis. These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.
Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. All opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.
