Home prices up, inventory down in San Mateo County

“Everything that is single-family, whether it’s the biggest home in the neighborhood in the nicest part of town, or the smallest tract home that’s the most affordable, is going up significantly,” San Mateo Realtor Wilson Leung said.

Leung said he expects prices to continue to climb as the season reaches its peak in September. Prices reached $2.09 million that time last year. For comparison, the median price in the county for September 2012 was $779,000, and in 2002 it was $637,000, according to the California Association of Realtors.

“Even as a professional I have a hard time knowing what properties are going to go for,” Leung said. “There’s definitely no comparables to justify most of the pendings that are going into contract right now.”

Homes on average went for 110% of asking in January and spent just 10 days on the market. Leung said the aggressive market means buyers willing to enter into contracts without contingencies — including those that can allow buyers to back out if the home is found to have a significant issue after the fact — are usually the winners.

And while the condominium market is less combative, a constrained supply has also boosted median prices, now up to $905,000. Condos spent a median of 17 days on the market and went for 103% of list price, and inventory levels were down 47% year over year. While new multifamily buildings are being constructed, the vast majority contain units that are for rent, not available to own.

Nationally, home prices increased on average 17.1% year over year for December, according to a report from real estate service CoreLogic. Phoenix, Tampa, Florida and Miami saw the largest increases, at 32%, 29% and 27% respectively. Washington state and Minneapolis were among the lowest ranked, with 10.5% and 11.4%.

According to the report, homes in the highest price tier saw the largest gains, while more affordable homes appreciated less.

That rings partially true for San Mateo County, where home prices increased by 10% between 2020 and 2021, but some of the most affluent neighborhoods saw disproportionate increases. Median prices in Atherton, the county’s most expensive city, went up 25% between the two years, from $6.35 million to $7.96 million. Homes in Hillsborough, however, the second most expensive city, increased by just 13%, with prices moving from $4.58 million to $5.2 million. Less expensive and medium priced cities saw a mixed bag of cost changes, some not increasing at all while many others were closer to the county median.

Moving forward, Leung said he expects inventory to increase modestly up to the season’s peak, with a slight dip in demand in part due to rising borrowing costs. But, he said “demand will still exceed supply throughout the whole year.”

On a monthly basis, inventory levels picked up, with 250 available single-family homes listed compared with 184 in December as the market emerged from its holiday slowdown. Inventory levels were down 53% year over year in December.

For buyers, Leung recommended putting in an offer, even if chances of coming out on top may be slim. He said buying a house is still likely a solid investment even given elevated prices, as they will likely only continue to climb.

“You’re going to get beat up in the market,” he said. “But if you don’t try, you have a 0% chance.”

corey@smdailyjournal.com

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