No slowing for San Mateo County housing market

The figure is a record high for the region, which has seen costs leap by $400,000 since this time last year when the median sales price for single-family homes floated near $1.6 million.

Over the first quarter of the year, median sales prices jumped by 10% from the previous quarter in 2020, according to SAMCAR, which also showed that sales are occurring at a quicker pace.

Listings stayed an average of 27 days on the market over the last quarter, down from an average of 30 days in the first quarter of 2020, according to the report. In March 2021, listings stayed on the market for an average of 20 days.

The report arrived as summer approaches, which is when sales traditionally tick up and prices have a tendency to spike.

Much of the action across the state is driven by the interest of first-time house hunters who are looking to capitalize on favorable mortgage rates, according to the California Association of Realtors.

“Record low interest rates have been fueling the market and many first-time buyers took advantage of cheaper costs of borrowing,” said the report.

Yet despite the desirable lending environment, many Californians are grappling with the state’s growing affordability problem, according to the CAR report.

At the end of last year, 27% of California’s households could buy a median-priced home — which is roughly half the amount of those who could afford a similar investment in 2010, according to the CAR report.

Similar trends are apparent on the national housing market too, according to a report issued Tuesday, May 4, from housing database Corelogic.

“The 2021 spring homebuying season is trending strong — reflecting the many positive signs of economic recovery,” said CoreLogic President and CEO Frank Martell in a prepared statement. “With prospective buyers continuing to be motivated by historically low mortgage rates, we anticipate sustained demand in the summer and early fall.”

Millennials are driving the market, said the report, as younger buyers are aging into the home-buying demographic. The influx of new investors combined with a rebounding economy and job growth is establishing a booming sales industry, according to the report.

To that end, national home prices in March jumped by 11.3% from the same time last year. Additionally, they increased 2% from February, with another 3.5% increase expected over the coming year.

The diminished rate of gain is anticipated because heightened affordability challenges could stifle the home-buying market and many will be priced out of the search for homes, according to the Corelogic report.

Nationally, an uptick in housing construction combined with a diminishing public health crisis could help lessen the pressure on the market and drive down prices, which could drive more sales transactions.

“A pick-up in construction and an increase in for-sale listings as more people get vaccinated may help moderate surging home price growth,” said the Corelogic report.

A similar hope exists in California too, where the state association of Realtors noted housing production is well below the recommended level from the state Department of Housing and Community Development.

With housing prices rising, migration trends are growing as residents leave the state and California’s population growth dwindling, the CAR report stated that more home construction is required.

“The need for housing is more urgent now than ever,” said the report.

austin@smdailyjournal.com