San Mateo County Real Estate |
November 2020 Report Mostly Focusing on City Market Dynamics |
The long-term median sales price chart below is similar to those for counties around the Bay Area - a significant spike in median house prices since the pandemic struck in early spring. (Generally speaking, Bay Area condo markets have not seen comparable increases in prices.) As mentioned before, recent jumps in median house prices have been driven not only by appreciation in fair market value, but by large increases in expensive home sales. Affluent buyers have made up a significantly larger percentage of Bay Area home purchases since the pandemic hit.
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The market typically starts a big slowdown in mid-November, running through the mid-winter holidays, until it begins to wake up in mid-January: New listings and sales plummet, and listings pulled off the market soar. Higher-price segments normally see the most dramatic plunges in mid-winter activity.
This year, the pandemic upended seasonality: Spring, usually the strongest selling season, saw a crash in activity; summer, which typically slows down - especially for luxury home sales - saw extremely high demand, particularly at the high end; and the heated summer market ran right into autumn, with most county markets unfazed by the terrible fires. We suspect late Q4 will see a slowdown, but remain more active than in past years. |
Luxury Home Sales by Month |
Prices & Market Dynamics by City |
Following is a series of analyses that look at city sales volumes and median sales prices, luxury home sales, listings for sale, and a few standard measurements of supply and demand. Note that very expensive homes often see softer dynamics - the pool of buyers is much smaller, and overpricing more common for these very special properties - but this is not always the case. |
Regarding the next chart: Percentages of 50% or more would typically be considered to reflect a high-demand market. Over 60% signifies very high demand, or as it climbs, extremely high demand. As mentioned before, very high price markets often, but not always, see softer supply and demand indicators. |
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7 Months after the Pandemic Hit |
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. |
Median House & Condo Sales Prices by Quarter |
Median sales prices can rise because of increases in fair market value – i.e. buyers are paying more money for the same home (supply and demand) – and/or because buyers are purchasing larger, more expensive houses. Both dynamics are currently at play, but it is certain that affluent and very affluent buyers have made up a dramatically increasing percentage of the total market throughout the Bay Area. In San Mateo County, the average size of houses sold in Q3 jumped a whopping 11% year over year, which explains some of the enormous increase in median house sales price.
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The next chart measures the annual percentage ups and downs in median house sales price since 1994. The 2020 YTD percentage will almost certainly change, one way or another, by the time full-year sales data is in.
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4 Supply & Demand Indicators |
Median House Sales Price Trends in Selected Cities |
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San Mateo County Real Estate |
Surprisingly, the fires did not significantly impact the number of deals being made in most Bay Area counties during the last 2 weeks of August - the exceptions being Santa Cruz, Sonoma, Monterey and Napa Counties, which saw declines of 13% to 33%. San Mateo County's activity actually increased over the period. (This chart looks at week by week activity in the Bay Area.) |
Number of house sales and median house sales prices YTD 2020 by city: |
Bay Area median house sales prices, summer 2020: |
San Mateo County median house sales prices by month: |
Year-over-year trends: new listings up 40% and new contracts up 34%. However, remember that summer is usually a slower market after a busy spring, and that dynamic has been flipped upside down by the pandemic. |
A snapshot measure of how many listings were typically active on any given day of the specified month: |
A snapshot of the number of active 2-bedroom+ listings on the market in late August by price segment. These figures literally change daily as new listings arrive and existing listings go into contract. |
A snapshot of the number of luxury home listings on the market in late August by city. Again, these figures change every day. |
Bay Area luxury home markets: Year-over-year summer sales volumes and percentage changes. San Mateo County saw a very big increase in sales over summer 2019. Some counties saw stupendous jumps. |
With the increase in summer activity has come an early upswing in the number of listings reducing price. |
Regarding the next chart, the lower the Months Supply of Inventory (MSI), the stronger the demand as compared to the supply of listings. Most of the market remains firmly in "seller's market" territory by this measure - some price segments are particularly heated.
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A breakdown of sales by era of construction: |
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San Mateo County Real Estate |
Virtually all market indicators reflect strong market conditions. Luxury home sales soar. August 2020 |
Median House Sales Price - Long-Term Trends |
Inventory, listings accepting offers, and closed sales volume are all well up from the low points earlier this year.
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Standard Market Indicators |
There are indicators of some softening in the market: Year-over-year, the number of price reductions is up (chart 1); the average sales-price-to-list-price percentage is down (chart 2); and average days on market are somewhat higher, but still wouldn't be considered high (chart 3). |
Summer has seen a big spike in high-end home sales. |
House Sales by Dollar per Square Foot Value |
Bay Area Market Comparisons by County |
This table ranks each county by the percentage of active listings going into contract in June/July 2020 - a standard statistic of market heat - compares it to the same period of last year, and then rates the year-over-year change. By this indicator, San Mateo County was the strongest market in the Bay Area one year ago. It is slightly hotter this year, but many other counties have seen very dramatic surges in demand. |
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Dramatic Rebound for San Mateo County Real Estate Market |
Median house price hits new quarterly high. |
Despite the ongoing health and economic crisis precipitated by COVID-19, the real estate market made a dramatic recovery from the steep declines in March and April. The median house sales price hit a new high in Q2, and high-end homes, in particular, have seen extremely strong demand – in fact, this applies to virtually every market in the Bay Area. More affluent buyers - the demographic least affected by COVID-19, unemployment, and also having the greatest financial resources - have been jumping back into the market to a greater degree than other segments.
The first chart below illustrates the big rebound in buyer demand, as the number of listings accepting offers in June 2020 rose higher on a year-over-year basis. Of course, closed-sales volume - a lagging indicator - was hammered in Q2 by shelter in place. |
Demand for luxury homes has been very high, as reflected in the next 2 charts. This has certainly been one factor in the rise in the median house sales price in Q2. |
The number of active listings on the market has also bounced back, and is now slightly above the level seen last year. |
Three angles on San Mateo County house values: quarterly median sales price and average dollar per square foot values, and a longer-term perspective. |
Around the Bay Area, condo markets have not performed quite as well as house markets, in either market demand or median sales price trends. |
Average days on market were the same on a year-over-year basis (and relatively low). |
Overbidding asking price has become less common. Part of this is due to changes in home showing rules, which make multiple offers less likely. |
Below is a breakdown of home sales by city and bedroom count. |
The Bay Area markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 outer Bay Area counties of Monterey (up 61%), Santa Cruz (58%), Sonoma (47%) and Napa (37%). They also have among the lowest population densities in the Bay Area. The more urban counties saw more modest y-o-y increases: San Francisco (6%) and Alameda (7%). San Mateo County was between those 2 poles.
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What we call the Stanford Circle of cities, on either side of the San Mateo/Santa Clara county line, is the most expensive regional market in the Bay Area - though there are other cities that are very affluent and expensive. Below is a snapshot of home sales there. |
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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.
