San Mateo County home prices trailing national rate

That’s compared to a national increase of 19.7% in May year over year, a figure reflective of “slowing homebuyer demand” following strong price acceleration — north of 20% — that occurred earlier in the year, according to the report.

It’s news that comes as the stock market’s faltered and interest rates have nearly doubled since last year. Rates for a 30-year fixed rate loan climbed to 5.5% this week, according to Freddie Mac — a big jump from when they hovered below 3% late last year.

“Higher mortgage rates and concerns about a looming recession are taking a toll on buyer demand,” wrote Selma Hepp, Corelogic chief economist.

More recent figures by MLS listings, which take into account sale prices only, indicate June home prices in the county were flat year over year following an 8% increase in May.

Hepp explained that high cost areas tend to be disproportionately affected by recession fears and stock market slowdowns, as buyers in those areas are more likely to be invested in the stock market and may be relying on liquidating part of their portfolio for a down payment, something they could hesitate to do if the markets are down, she said.

Additionally, the interest rate hikes from recent months can mean an additional $2,300 or more per month on a 30-year loan for a $2.05 million house, the median price in the county as of June, per MLS listings.

Of 20 metros examined, Seattle, San Diego and San Francisco (which includes San Mateo and Marin counties) posted the largest slowdowns in annual gains compared with April, according to Corelogic.

“June appeared to be a tipping point, with a more significant pullback in buyer interest, which will be reflected in next month’s data,” Hepp said.

Still, as of June 30, typical home prices in the county were $1.94 million, according to Zillow data, the most expensive in the state and the fourth most expensive in the country. Pitkin County in Colorado topped the list at nearly $4 million, followed by New York County (Manhattan) and Nantucket County.

San Mateo County was followed directly by Marin, Santa Clara and San Francisco counties, at $1.84 million, $1.79 million and $1.76 million, respectively.

Such markets on the West Coast have “seen considerable rates of appreciation over the last three years,” Hepp said. She said climbing prices combined with climbing interest rates in some cases has increased the cost of homeownership by as much as 50% just in the past six months.

“That really weighs on people’s decision to buy a home,” she said.

Fears of a downturn could also be pushing more homeowners to sell, local Realtors have reported.

Inventory in the county in June was up 19% year over year, with 614 homes on the market — the most on the market since 2020, according to MLS listings. The number of days homes spent on the market was also up slightly to nine on average compared to eight in June last year.

The most expensive places in the county are Atherton, where 26 homes sold in the second quarter with a $7.7 million median price, followed by Hillsborough where 32 sales produced a $6.6 million median, according to the San Mateo County Association of Realtors.

Excluding unincorporated areas, East Palo Alto was most affordable with a $1.2 million median followed by Daly City at $1.3 million.

corey@smdailyjournal.com

(650) 344-5200, ext. 105