“Factual” vs. Actual in the Half Moon Bay Market: Why some homes sell quickly, not others…
One reason is micro-market activity…the price point of the home within its local market. By that I mean, “how many people can afford to purchase that home?” You would think that the higher the price the harder the house would be to sell. In fact it depends on the local market segment that the house falls into. If you were to break down the housing market in a local area, you would see that even at a hyper-local level the activity can be different. This is one reason why you will see some buyers entering the market having done their homework by reading and searching online (factual), certainly, but also with a belief about the market. Upon entering the active search phase of visiting and narrowing down prospective homes, they find the reality(actual) different. As an example, I took the city of Half Moon Bay to analyze this. I also wanted to see if the trend is consistent with what is happening in other parts of San Mateo County.
“For the majority of the micro-markets within our San Francisco/Peninsula region, affordability at the entry level and available inventory at the higher end are our biggest concerns. Home Buyers and Sellers are not hearing this message from the media. Now, more than ever, it’s critical to know your market, and know just how local real estate really is.” — Sept. 23, 2007 Weekly Market Watch, Rick Turley, CB SF/Peninsula President.
Here is Half Moon Bay’s figures based on a sales price breakdown by quartile since 2005. For this one city, I took average (not median) total sales prices from the MLS and divided them into 4 groups. I took the “average” number instead of the “median” number because there were so few sales in just the single city that I thought it would be more accurate to show the data with “average” numbers.
What this shows is that homes in the first and second quartiles are relatively flat in the last two years compared to the third and fourth quartiles, where appreciation has been greater. What this tells me is that, in Half Moon Bay at least, move up buyers may have a greater challenge if the house they want to sell is in the lower quartiles and they want to purchase in the higher quartiles. If the range continues to widen it will be harder for these people to make that move. On the other hand, homeowners considering downsizing or helping their children get into their first home may have an easier time in this market. The higher inventory and longer days on market means those sellers will need to be very competitive to sell their property. Of course, this is also neighborhood specific.
“Big picture” stories may be factual, but not necessarily actual figures pertaining to each local market segment.