Coming off a brief cooling period, home sales experts predicted the local and national housing market to heat up over the coming summer months.
A report released by real estate watchdog CoreLogic suggested a slowdown seen nationally in home sales could soon end, primarily due to declining mortgage rates.
A local real estate expert anticipated the Peninsula’s markets, which saw a rare cooling period over previous months, will follow the national trend and grow more expensive too.
In the wake of national home price growth rates slowing over the last 13 consecutive months, a report from CoreLogic illustrated cost increases are rebounding in many major metropolitan areas.
Ralph McLaughlin, the company’s chief economist, predicted the trend will continue to spread and ultimately spur a turnaround in the home sales market over the next few months.
“Half of the country’s markets are now seeing an increase in home price appreciation from March to April. This suggests the great cooldown of 2018-2019 might be coming to an end. Coupled with mortgage rates falling to 18-month lows, it seems the housing market frost is poised to thaw quickly this summer,” he said in a prepared statement.
The projection comes in the wake of a CoreLogic report last month which showed the median home sales price across the Bay Area ticked down marginally from the year prior — by $1,000 to $830,000 — for the first time since 2012. A report released June 27 indicated that sales in May were up 19 percent from April and that median home prices dipped in May 1.7 percent. However, a more recent report has home prices heating up with an anticipation that they will increase by 5.6% from May 2019 to May 2020.
Realtor Michael Verdone, who has sold property in San Mateo County for nearly 50 years, said he anticipates the market cooling will be short lived locally as well.
“The market is still incredibly strong here in San Mateo County, especially in upper-scale neighborhoods like Belmont, San Carlos and Burlingame. Very, very strong,” he said. “Because of school districts mostly.”
A San Mateo County Association of Realtors report released last month tracking market trends supported Verdone’s position, as the county’s median sales price reached $1.6 million.
The June update marks a $100,000 tick down from the month prior, but the report showed gradual growth worth about $300,000 from the winter months and start of the year when the home sales market typically slows due to the holiday season.
Condominium sales prices grew over the same period too, as the median listing for June showed the cost per unit reached about $975,000 — up from a yearly low point of $819,000 in February.
Looking onto the summer months, when the market typically becomes more active and prices leap, Verdone anticipated the growing momentum to continue over the immediate term.
“The summer is historically strong between March and the beginning of August,” he said. “People are looking to upsize, or get into a different school district.”
While projecting a healthy market, Verdone noted there is some softening locally - particularly on the upper crust of the housing stock in communities such as Atherton, Hillsborough or other wealthy enclaves.
“I’m seeing places on the market for a lot longer and I’m seeing price reductions on the higher end,” he said.
Verdone attributed the high-end market cooling to some sellers listing their properties at an unrealistic price which pushes away buyers who otherwise have a variety of alternative desirable properties available.
Forecasting beyond the summer months, Verdone suggested continued economic development tied to some of the large, local technology companies will fuel further competition and price growth across the market.
More specifically, the expected job growth among employers such as Facebook and Google along the Peninsula, combined with the limited land opportunities for residential development, will likely compound the existing affordability issues, added Verdone.
“It’s really simple — supply and demand,” he said. “You have jobs and you don’t have housing.”
To offer some relief, Verdone advocated for local and state lawmakers to craft legislation which facilitates further development and loosens construction or financial regulations.
“Anything that can be done to encourage housing rather than attack or restrict it is probably a benefit,” he said.
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