Coastal Real Estate and Lifestyles

A question appeared on Coastsider, a local news source, a couple of days ago that caught my attention.  It was real estate related, of course.  I thought about what I could contribute that wasn’t already provided.

As we try to keep up with an always-changing market, using new tools that offer us speed and variation to get the needed market information, we now look to companies like the MLS - Pro.MLSlistings; RealtyTrac, Foreclosure Radar, Altos Research, The Real Estate Report, DataQuick, and Broker or Agent Metrics - along with our own brokerage-provided reports.  Real, factual, consistent information is available.  Unfortunately, it ’s not available all in one place!

One tool this site, Coastside Real Estate & Lifestyles, uses is Altos Charts.  You see it on my home page all the time.  The charts are live and updated weekly with real-time analysis for the cities at the top of the chart.  Anyone can do a quick check of the market this way, which is fun to do if you are just watching.

Altos Research is a company I like to use because they track listing data, providing complex information from various sources in a readily understandable manner, and they are well respected in the industry.  Listing data is as important as the historical data (i.e. what has happened…pending, pending with release, pending show, sold, expired, etc) which we obtain from MLS or reports from other companies.

I sometimes wonder if you may feel like Realtors keep information from you…  It really can be information overload unless you’re needing to buy or sell at that time.  Realtors walk a fine line between wanting to be transparent, fiduciary duty to our clients, and knowledge sharing.

Here’s what this week’s Altos Report Market Update for Half Moon Bay single family homes shows:

• Half Moon Bay (as a whole, not specific neighborhoods) list prices have been coming down from the peak of 2005. 

• The quartile with the lowest days-on-market is the lower-middle 25% of homes with a median price of $877,000. . . at 70 DOM.  The other three quartiles of homes currently for sale all average over 100 days on the market.

• 55% of listings have reset their days-on-market.

• 30% of properties on the market this week have price reductions.

• Average price per square foot for listings is $475.00.

Whether you should buy or sell either now, this Fall, or next Spring, will depend on your goals, timing, finances and financing, and probably other issues.  If your timing is within the next 12 months, talk to a real estate professional sooner rather than later.  The continuation of a buyer’s market may indicate further price reductions or properties coming off the market.  The better prepared you are the smoother the transaction = less stress.

If you want to receive this week’s complete Coastside Real Estate Market Update Report showing the City Overview, Characteristics per Quartile, price trends, price per square foot and inventory trends, Altos’ Market Action Index for Half Moon Bay as a whole and by Quartile, contact me.

For more market update posts like this and articles related to neighborhood market activity, subscribe to Coastside Real Estate and Lifestyles.

Altos Research provides various kinds of trends data, updated weekly, about cities that is based on public LISTING data, not sold data.  It can be viewed from 7 days to 360 days.  This is a good compliment to the MLS sold data because it shows leading indicators about a local market.  Altos’ site explains it this way:

A city’s data can be viewed as one market, or broken down by quartile - in essence 4 micro-markets within a city, as shown in the Half Moon Bay reports below.  Quartile 1: Most expensive 25% of properties; Quartile 2: Next 25%; Quartile 3: Next 25%; Quartile 4: Least expensive 25% of properties.

This post will show, graphically, why some market activity appears different from others and can sometimes be confusing.  As we see below for Half Moon Bay, currently, the entry level markets continue their correction.  The higher end of the market is holding its own.  Half Moon Bay does have some distressed properties, but - to date - the number remains small compared to other counties.  They do, however, affect local values.  Value = that’s a topic for another post!…discussed following the first half of 2008 in this post.

A very clear listing price trend viewed by quartile over the past 12 months…

If you thought you were confused by Days-on-Market before…  It looks like we’re trending back to where we were about a year ago, but the last year has seen DOM all over the place - a transitional market?

To see median prices for the cities of Half Moon Bay, El Granada, Moss Beach, Montara, Pacifica, Pescadero, South San Francisco, San Bruno, San Mateo and Burlingame, check the Local Stats widget on my home page.  It is updated automatically by Altos every Monday.

To see more reports like this -  for condos, inventory tracking, price per square foot, median and average prices, as a whole or by quartile, subscribe to this blog or contact me. 

 Average Sales Prices for Ocean Colony, attached and detached single family homes - Quarter 1 over 8 years:

•  2008 - $1,250,000 (approx. 12% depreciation than in 2005; approx. 44% appreciation since 2000.)
•  2007 - $996,666
•  2006 - $1,176,500
• 2005 - $1,399,277
• 2004 - $1,371,900
• 2003 - $1,155,00
• 2002 - $1,003,920
• 2001 - $1,294,954
• 2000 - $694,750

The graph showing inventory (blue) and closed sales (red) spanning the last 8 years highlights a consistent trend in the earlier part of the decade and then a downshift in inventory and sales since 2004.  As expected, there is an uptick in available homes during the first half of the year.  Fewer sales have followed fewer available homes.  Inventory is very good right now, but it may continue to be somewhat limited if we continue to see sellers accept pre-emptive offers.
01 = January to June; 02 = July to December

This is what the current market looks like when we break down the four price points within Ocean Colony.  There are eighteen total properties for sale…

Spyglass homes

One active home for sale $1,850,000; 1 recent closed sale with 0 Days-on-Market for $3.5M.  Large ocean view homes 4-7 years old.

Detached homes

Thirteen single family homes for sale. - Average List Price $1,486,000; approx. 18 - 31 years old.

Attached homes and townhouses

Two active homes for sale - Average List Price $900,000; approx. 20 years old.

Ocean Corners condominiums

One condo for sale for $499,000.  (on market over 200 days; just reduced again, now 5.8% off original list price per MLS Listings).

Thirty day activity:

• 5 new listings that are still active; 2 of those have reset days on market
• 3 pending contracts (Eagle Trace - 54 DOM; Greenbrier - 0 DOM; Cypress Point - 1 DOM)
• 1 price reduction (Troon)
• 1 expired listing (Fairway)

Ocean Colony has experienced approximately 12% reduction in overall value over the last few years.  However, there are homes in this neighborhood that are garnering offers at List Price, minimal days on market and short escrow periods.  This contrarian activity has contributed to an overall slight increase in the sale price trend line within the last 12 months (Aug 07 to Aug 08). 

The other trend happening in this neighborhood is very quick or pre-emptive offers.  Of the seven (7) sales between January and August 14, 2008, approx. 40% (3) went into contract within one day of showing on the MLS - which means they were being negotiated before market exposure.  That will skew a days-on-market trend as shown in the graph link below.  Average days-on-market for Ocean Colony sales within the past 12 months is almost 5 months (144 days).

12-Month Ocean Colony Average Sale Price to Days on Market (DOM) trend.

MAP-BASED RESULTS PAGE OF OCEAN COLONY HOMES FOR SALE OR RENT.
 

Whether it’s for a break or some other reason, in the last seven days, 18 listings came off the MLS (either withdrawn, cancelled or expired). 

Yet fifteen new listings came on the market.  Of those 15, 12 were in Half Moon Bay, 1 in El Granada, 1 in Moss Beach, and 1 in Montara.  Of the 12 in HMB, 5 of those are in Ocean Colony; the other 7 spread among the various neighborhoods.

Also this week, ten listings went into contract (contingent/pending).  One of those is an Ocean Colony home that was on the MLS only one day.

Nine listings had price reductions.  Eight are residences and one is a lot.  Of the eight sellers with residences reducing their list prices, the average Continuous-Days-On-Market (CDOM) is 166 - minimum was 21 days and maximum was 325 days.  Homes with price reductions this week spanned all quartiles with slightly more price reductions in the higher priced homes.  The average square footage of homes with price reductions this week is 3,135 on an average lot size of 10,224 square feet.

Four properties closed escrow.

These include single family homes, condos, multi-family properties, and lots.  The only group excluded is rentals, of which there are very few input into the MLS.

Is 2008 shaping up to be as bad as some think?  It’s all a matter of perspective.  Here’s a look at some single family home numbers for Half Moon Bay, El Granada, Moss Beach and Montara combined, comparing the 2006, 2007 and 2008 from the raw monthly data between January 2006 and May 2008.

The good news is the San Mateo County Coastside real estate market as a whole is not suffering the reality being experienced by other areas.  The sale prices have not been diving…unless sellers start out too high to begin with; however, they are continuing their moderate correction, so far.

**Highlights**

• Median sale prices drop of approximately 5%, roughly $50,000 off the median price, in the first half of the year.
• The number of transactions dropped 50% in the first part of 2008.  Significantly fewer buyers in the market so far this year.
• The number of homes for sale (inventory) increased about 30% from the same time period last year (only June listings missing).  Overall inventory has dropped about 10% from the first half of 2007 to the second half of 2007.

Median Price: (method used:  monthly medians averaged; no June figures yet)

• January to June 2006 - $908,750
• July to December 2006 - $861,667
• January to June 2007 - $895,875
• July to December 2007 - $967,417 (mortgage crisis announced in media)
• YTD 2008:  January to May - $855,666

Coastside Inventory: (method used:  same as above)

• 2006.1st half - 90
• 2006.2nd half - 111
• 2007.1st half - 99
• 2007.2nd half - 112 (mortgage crisis announced)
• 2008 Jan-May -118

Closed Sales: (method used: same as above)

• 2006.1st half - 17
• 2006.2nd half - 20
• 2007.1st half - 22
• 2007.2nd half - 13 (mortgage crisis announced)
• 2008 Jan-May - 13

** Summary **

The potential buyers for your home are different than those of a few years ago.  The flippers, wheeler-dealers, and speculators are few and far between.  What buyers there are have the funds to complete their purchase.  As financing continues to gain quality control (again) and buyers come to the table with some down-payment, I am seeing fewer wishful buyers and more prepared buyers.  Sellers are not testing the market, they are listing their homes because they want or have to sell.  Most are beginning to figure out that it pays to price it right the first time…and it can really hurt to have an overpriced listing at the peak of exposure - the first two weeks.  The rest of the sellers are reducing the list price or taking solid offers with a lower than desired price or even considering lease-options.  This is the maket correction in action, happening now.  Another way to watch the market is to check periodically the Local Stats on this site which are the local market’s leading indicators provided by Altos Research.

Recent articles of interest:

 (National) Business Week 6/30/08 - “The Next Victim of the Real Estate Crisis”

(County/Local) San Mateo Daily Journal - “Tax Roll Shows Healthy Economy”

As a follow up to the June 14, 2008 post about the Half Moon Bay Coastside single family homes market, here’s a look at what’s going on in the Condo market:

Inventory - It won’t be accurate to take the same format as I used for single family homes.  Due to the very small market it won’t show much:

• May 07 - 9 months of inventory; 1 sale ($620,000)
• January 08 - 11 months; 0 sales
• May 08 - 14 months; 1 sale ($489,000)

Sales did occur in other months; I’ll present the information by condo development.  There are no condominiums in Moss Beach or Montara; there was no activity in El Granada.  Therefore this is only for Half Moon Bay.  Nineteen condo sales occurred from May 1, 2007 to May 31, 2008.

5 in Cypress Cove - average SP $721,600 (3 3br; 2 2br)
3 in Ocean Corners - average SP $543,000 (1 3br; 2 2br)
4 in Amesport Landing - average SP $475,250 (all 2 br)
7 in Pilarcitos Park - average SP $445,000 (1 3br; 6 2br)

As of today, there are 4 pending with an average list price of $443,500.

There are now 8 active condo listings with an average list price of $538,000.

This Altos graph shows the listing trends for the local condo market and why it’s important to know the specifics of the quartile you’re researching before pricing your condo for sale or making a purchase offer.

To learn more about Half Moon Bay area condos, check out this archived post.

Market activity and consumer feelings are consistent with my last morsel on 3/26/08.  Half Moon Bay March inventory was 7.6 months - pretty much on par with February.  While volume continues to be suppressed, HMB’s total sales volume was about double that of January 08.

In the last morsel, I mentioned that we were trending toward a balanced market with January’s 8.4 and February’s 7.2.  With 3 months of data to work with now, that ’s not the case to date.  April’s final numbers to come, are 7.5 months of inventory, incorporating 12 new HMB listings in April.  That said, not all listings are affected, the right combination of property/buyer/seller will put a home into contract within the first week.

For Half Moon Bay:
March - 22 new listings; 10 accepted contracts from total inventory - 2 within first week.
April - 12 new listings; 7 accepted contracts from total inventory - 2 within first week.

For El Granada:
March - 8 new listings; 2 accepted contracts from total inventory - 1 within first week.
April - 11 new listings; 3 accepted contracts from total inventory - 1 within first week.

A new trend is working to keep the property in contract.  While buyers and sellers both want to move forward, the new lending guidelines are catching some people off guard.  Some loan programs continue to be attractive - if the buyer comes to the table prepared; however, with the financial market’s pendulum now swinging heavily toward conservative investments, some loans take longer to go through than many buyers might expect.

Half Moon Bay overall inventory trend (for residential single family homes):

What this graph shows is that inventory for single family homes in Half Moon Bay is higher than a year ago, the inventory “peak” within the last year was last November 2007.  Inventory frequently drops toward the end of the year, but the latter part of 2007 was adjusting to the credit crisis and a correcting market - which we’re still doing…  Price adjustments are more common than a few years ago as sellers and agents work to price their homes “at market”.

FOR SALE in Arleta Park as of today, Sunday, March 2, 2008:

• 7 single family homes
• 1 townhouse
• 22 residential lots
• 1 commercial industrial (2 level acres with warehouse, etc.)

From my 2008 State of the Coastside Report: **

**Half Moon Bay 2007 Median Price Home Sale - $957,000

Arleta Park neighborhood 2007 Median Price Home Sale - $832,500

**Half Moon Bay 2007 Average Price Home Sale - $1,127,763

Arleta Park neighborhood 2007 Average Price Home Sale - $993,392

Contact me to receive a copy of the entire 8 page report covering Half Moon Bay, El Granada, Moss Beach and Montara by community.

Coastside real estate is very “location specific”.  Trends can be information but they are not the whole picture if you are ACTIVELY in the market.  In our office alone, 2 homes sold within hours of being listed last week.  Part of that may be heading into the spring buying time and/or the seller had the golden triangle (my phrase) of Location, Price, and Presentation.

They came from the Frenchman’s Creek neighborhood, Fremont, San Francisco, Sonoma, even southern California…tired of waiting for the bottom to hit, or starting the spring house-hunting…and many checking out our coastside communities on one of our “10″ days on my subjective weather meter.  Twenty-one groups came through my Open House in Frenchman’s Creek yesterday - the most in a long time!  They were upbeat, full of good questions, and ready to find their next, or first, home.  That number may not sound like a lot to my Palo Alto Coldwell Banker colleague, Arn Cenedella, who tells us about his 40-45 groups, but, hey, we’re excited!  And to the north, similar activity is being reported by Sonoma County country property expert, Coldwell Banker colleague, Pam Buda.

Are buyers noticing inventory shrink compared to last Fall?  Will we see a traditional spring spike in homes for sale now that we’re post-SuperBowl — even though we’ve still got 28% more inventory that a year ago at this time?  Consequently, we are still in a Buyer’s Market with an 8 month inventory absorption rate for HMB and a 10 month absorbption rate for the entire Coastside (Half Moon Bay, El Granada, Moss Beach, and Montara).  If you’re not working with a Realtor yet, now may be the time, as there are many “pocket listings” out there now…and some Coastside properties do not follow trends. 

Here’s a look at available inventory over the last year in Half Moon Bay alone:

With the possibility of a temporary raise to the conforming loan limit for markets such as the San Francisco Bay Area, there is lively discussion here in the blogosphere about how this may alter our local trends.   Here’s a look at median price graphs for the last 90 days closed sales for Half Moon Bay, El Granada, Moss Beach, Montara and Pacifica.  Ninety days is a relatively short period of time in a slower market; for more graph detail of market indicators spanning the last 360 days, including quartile markets and other cities, visit my Local Stats page.

HMB 90 day activity: 12 closed sales ranging from $645-$1,865K.

EG 90 day activity:  3 closed sales ranging from $720-$865K.

MB 90 day activity:  2 closed sales ranging from $620-$833K.

Montara 90 day activity:  4 closed sales ranging from $740-$1,845K.

Pacifica 90 day activity:  25 closed sales ranging from $449-$1,450K.

Blog mentor and friend Kevin Boer, 3 Oceans Real Estate, gives a detailed scenario of how this could change our monthly cash flow…