Already scarce for-sale homes are becoming more rare in San Mateo County, with low inventory levels — down by 51% year-over year in December — sparking bidding wars and further fortifying financial barriers to homeownership.
Little new housing and current homeowners staying put, coupled with relentless demand as new jobs continue to pull more people to the region kept prices above $1.8 million last month, a time when the market typically slows amid the holiday season. Just 183 homes were available compared with 377 in December 2020, according to real estate database MLSListings.
“It’s a very unhealthy market,” Marla Perego, San Mateo County Association of Realtors president-elect, said. “It’s pricing out the people who are just really clawing their way into the housing market.”
Single-family homes spent just 11 days listed in December with sale prices averaging 110% of asking, according to MLSListings figures.
Perego said the scarcity is affecting the typically less-competitive condo market as buyers are faced with either looking beyond the county or multifamily buildings. Condo inventory was similarly down 52% year over year for December as median prices were up 7%. The number of days condos spent on the market decreased from 27 to 14 and sale prices averaged 103% of asking.
The majority of new construction in the county has been multifamily apartment buildings with units available for rent, not sale. But high-paid employees, often ushered in by the increasing number of technology and life-science employers on the Peninsula, are eager to buy from the county’s stagnant stock of single-family homes.
“They don’t understand until they get here that they might have got offered a fantastic salary, but it’s still not enough,” Perego said, who added she often helps those relocating to the area. “There’s still not enough building going on in the Bay Area, and they’re still hiring people outside of the Bay Area and bringing them here.”
Median prices in November for single-family homes topped $2 million. Prices reached all-time highs earlier in the year, surpassing $2.1 million. Median condo prices in December climbed to $880,000.
Rents, meanwhile, have also increased, up 10% year over year in the city of San Mateo where median rents are $2,420 for available one bedrooms and $3,300 for two bedrooms, according to Zumper.
Similar things are happening at a national level, with median home prices up by 18.8% year over year in November according to a report from real estate service CoreLogic.
The report notes “robust demand and worsening inventory levels” driving price acceleration. While the Bay Area’s year over year home-price increase exactly mirrors the nationwide increase, warmer climates including Phoenix, Tampa and Miami topped the charts with increases of 32%, 29% and 26% respectively.
Mortgage rates, which have jumped above 3.5% this year and are positioned to continue to increase, could further worsen affordability and deter home selling, the report states.
Perego said that though she expects inventory in the county to pick up heading into spring, a time of year when more people typically list their homes, it likely won’t spell the kind of market change for which many buyers are hoping.
“I always say there’s hope, because markets do change, but I don’t see that in the near future,” she said.
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