Home prices are stagnant in San Mateo County

Compass Real Estate Realtor Raziel Ungar said the Federal Reserve’s goal was to slow down the rapidly appreciating housing market by raising the main U.S. interest rates, which affects rates for home loans.

“Which they’ve almost done too good of a job,” Ungar said.

The median sale price for a single-family home has been $1.8 million on average since July. Last August, prices were an average of $2.34 million for a single-family home, according to the San Mateo County Association of Realtors.

“There were fewer buyers and fewer sellers last summer. People were waiting to see what would happen, the market dropped, sales and volume did too,” Ungar said.

In August, 316 single-family home sales closed, a 13.7% decrease since July, which was 401. In comparison, 339 single-family home sales closed last August, according to the San Mateo County Association of Realtors.

“Prices were appreciating at a pretty significant rate for many years, and now we are returning to what many would consider to be a balanced or normal market, Ungar said.

Madhu Sarkar, a Realtor for Keller Williams Advisors in Burlingame, said the interest rates are why the median sale price has declined over the last two months.

“Many buyers in my pipeline are taking a pause. If the rate is too high, the purchasing power decreases,” Sarkar said. “It is also harder to buy up, and it doesn’t make sense for some sellers because they have a 30-year fixed rate under 4%. It doesn’t make sense even if they are making a great profit.”

However, Ungar said he still sees premier homes selling in the area, some for cash.

Sarkar echoed Ungar, adding turnkey homes in good neighborhoods sell for or above the asking price. Both Realtors advise sellers to price homes correctly so that they receive more interest.

“Pretty homes on pretty streets are the hot target, and if they are buying a fixer-upper, they expect the price to reflect that,” Ungar said.

Sarkar said some of the hot spots around the county are in Redwood City, San Mateo, Foster City and Redwood Shores. Outside the county, she said Castro Valley appears to be an up-and-coming city for home purchases.

Ungar assumes interest rates will eventually go down, but it is doubtful those numbers will fall to the historically low rates from a few years ago.

“The Bay Area always has and will continue to be one of the most beautiful and sought-after places in the world, and that isn’t changing,” Ungar said. “Unfortunately, it will continue to remain quite expensive to live in this area.”