May 30, 2008

San Mateo County Single Family Residential data and statistics

Thanks to Burbed Reader Frank for this San Mateo data.

Wow… go Menlo Park!

Comments (15) -- Posted by: burbed @ 4:48 am

15 Responses to “San Mateo County Single Family Residential data and statistics”

  1. madhaus aka guitar hero Says:

    I don’t understand. Only 2 of these cities had average sales above the listing price, Menlo Park and San Carlos. Even Atherton and Hillsborough are selling at 5% discounts. I thought property was flying through windows!

    Comparing new listings to closed sales shows that inventory isn’t going down any time soon.

  2. Real Estater Says:

    Madhaus,

    At the super high end, prices are always negotiable, because when a house is listed at $10M, chances are offers will be coming in one at a time, rather than 10 at a time. As a result, such homes are often marketed with a different strategy, where they price it high with the expectation that there will be negotiation. Obviously, what you don’t understand is the art of selling.

  3. DreamT Says:

    RE – your explanation almost makes sense, until one extrapolates to the situation where the houses currently selling with 10+ offers end up only attracting one offer (say a $1.6M Palo Alto house). Then what – the same explanation stands for this new price range and location, and yet this is no longer a healthy market.

    In other words, madhaus is not questionning the rationale for the sale strategy, but commenting on the evolution of overbidding dynamics. There was no need for the arrogant ‘Obviously’.

  4. Real Estater Says:

    >>until one extrapolates to the situation where the houses currently selling with 10+ offers end up only attracting one offer

    I must have been drinking too much coffee. Now I don’t understand what in the world you’re trying to say.

    >>There was no need for the arrogant ‘Obviously’.

    There’s some background here. Last week he excitedly emailed Burb about some house in PA that “dropped” from $11M to $10M, and I already explained to him the sales strategy in this segment. The first time he doesn’t get it, it may be just ignorance. The second time he doesn’t get it, what do you call it?

  5. DreamT Says:

    Today: $10M houses attract ~ 1 offer so they are priced higher for negotiation purposes. $1.6M houses attract ~ 10 offers so there’s overbidding.
    Some time in the future, if the houses equivalent to today’s $1.6M houses at the same locations turn out to generally attract ~ 1 offer, you could then apply the same reasoning – they are priced higher for negotiation purposes, and the ‘super high end’ just expanded to include these. Kind of like the shrinking RBA in reverse – the area with high-end properties where no overbidding can be expected is expanding.

    The reality though will be that these areas are now down markets, not that the sellers suddenly have a new sale strategy or that these houses now qualify as ‘super high end’.

    So while your explanation seems to make sense in theory, in reality it can be used to infer that a down market really isn’t one, so I didn’t find it convincing.

    I hope this is clearer. As you say – the first time it must have been ignorance?

  6. Real Estater Says:

    DreamT,

    The first time, it was poorly written. The second time, it was convoluted.

    Let me make it real simple. If the house is worth $1.6M today, then sometime in the future, it will be worth much more due to appreciation. Thus, if it were priced at $1.6M, it will attract even more offers.

  7. DreamT Says:

    RE – I made no statement on the future price of said houses, only applied comparative analysis. Read again tomorrow.
    And sorry that I overestimated your capacity for abstraction, Mr. Tech Guy :(

  8. Pralay Says:

    Madhaus,
    If SP/LP ratio is 95%, then “you don’t understand is the art of selling“. If SP/LP is 106% due to a typing error of McClellan Road property, then “overbidding is everywhere” (post #14 in May 5 feature).

    So, either way it’s great time to buy. :)

  9. steve Says:

    As this thread shows, % of listing price can be spun a variety of ways. The data that matters is whether houses are selling for more or less than comps did 3 months ago, 12 months ago, etc. In the RBA, the LP is certainly higher than the comps and the recently closed sales seem to be too.

    Is their any disagreement on the point that my $1.5M today buys less than in 2007 or 2006 in Palo Alto or Menlo Park?

  10. DreamT Says:

    Steve – no disagreement on my part, although you should adjust your “data that matters” for inflation and loss of investment opportunity: your $1.5M of today is intrinsically worth less than a $1.5M of 2006 due to both.
    On the other hand, expected future return on equity is also factored in house prices, so to use past prices as comps with present prices, the realized return on equity between then and now must also be taken into account, and to your point this number is significant in these neighborhood in the past 2.5 years.

  11. steve Says:

    DreamT – good points! Inflation has been low, but that is clearly changing. Oppty cost of the mony has been reasoably high. Sadly, that is changing too – at least for my investments. My money hasn’t been so “smart” the past 18 months or so. Have any good tips? ;)

  12. San Mateo Home Sellers in Trouble Says:

    Inventory is building up quite a bit in San Mateo. I also gathered some data here:

    http://sanmateore.dreamhosters.com/2008/05/may-2008-update-463-increase-of-troubled-home-sellers-since-october-2007/

  13. DreamT Says:

    steve – no advice to give you. If you have $1.5M handy you’re in a completely different ballpark from me (from most if not all of us actually)

  14. madhaus aka guitar hero Says:

    Steve, I am not so sure that it makes sense to look at comps from 3 months ago. Home sales are strongly seasonal. Instead, I’ve been watching trends on the Dataquick numbers week to week with every change relative to 12 months ago. That’s how I saw my zip code had plateaued. Median prices were up 15%, then 10%, then 5%, then 2%, and then they started going down.

    I really laughed when the agent at an open house today (ridiculously overpriced at $1.5m) insisted that my Sunnyvale crapshack was worth $1.3m. Only if I physcially moved the house and lot to Cupertino* would it be worth that. I told her about the trends, about the comps in my neighborhood, but I think she must be related to the “tech guy.” Prices only go up, either very fast or just fast!

    *Rancho Rinkydinky is officially no longer part of Cupertino.

    DreamT, I warned you what would happen if you left food out for trolls.

  15. DreamT Says:

    madhaus – I can’t help it, I always give the benefit of the doubt


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