The nationwide home price rate of increase this year roughly doubled that of San Mateo County, according to figures from real estate service CoreLogic, which indicate county single-family homes prices in September floated above last year’s figures by 8% compared with the national growth of 18%.
Lofty local price tags and a reduced emphasis on proximity to tech jobs are likely to blame as median home prices, though down slightly moving into fall, remain north of $1.8 million for the county. Summer months saw that figure surpass the $2 million mark.
“It definitely was a hot market, but I think there’s been more people that don’t have to value proximity to work,” San Mateo County Realtor Wilson Leung said, who pointed to less expensive neighboring counties that saw larger increases. “The reasoning is, they’re more affordable.”
Alameda County, where average home prices are closer to $1.1 million, saw a 23.8% year-over-year bump, and Contra Costa County, with a $910,000 average, saw a bump of more than 24%, according to Zillow.
San Mateo County’s inventory this year has remained low even moving through fall, a time of year that usually sees an increase in supply, Leung said. For that reason, despite a slight seasonal slowdown, prices have remained high and would-be buyers, some of whom now have the option to live further from their employers, are continuing to be priced out.
Even for those looking to purchase from the county’s constrained supply, Leung said many are looking for homes that include work space, whether that is an additional bedroom or just a nook for an office. Buyers continue to be dual-income households often with or looking to start a family, he said.
And the trend to cheaper markets rings true nationwide. Idaho, Arizona and Utah saw the largest year over year increase in September, at 30.1%, 29.6% and 26.2% respectively. California’s increase was less than 20%. Single-family, detached homes in the lowest price tier saw the greatest increase, according to CoreLogic.
“Remote work has allowed many employees to buy homes further away from their office,” Frank Nothaft, chief economist at CoreLogic, said. “These homes are often in the suburbs or exurbs, where property prices and population density are lower and single-family detached housing more common.”
The report also notes that hopeful homebuyers, many of whom are millennials, are likely being barred from the market due to cost.
“High demand and low supply levels for entry-level homes, in particular, are sidelining many would-be first-time buyers” the report states. Nearly half of millennial homebuyers report not being able to afford a home in their preferred area, according to a CoreLogic survey.
Looking forward, home prices are expected to level off, tapering to a 1.9% year-over-year increase by September 2022, according to the report, which attributes the projection to the increasing number of priced-out buyers. Additionally, the trend to lower-density areas is expected to wane as the pandemic subsides.
Leung also mentioned expected interest rate increases could put a damper on things. Locally though, he emphasized, it’s still a seller’s market with homes going well over asking, and it will likely remain that way next year.
(650) 344-5200, ext. 105