A Berkshire Hathaway Affiliate
Buy.Sell.Stay. January 2016 Market Report Pacific Coast Carmel, Monterey, Pebble Beach, Santa Cruz
2016 Intero Real Estate Services Inc., a Berkshire Hathaway affiliate and a wholly owned subsidiary of HomeServices of America, Inc. All rights reserved. Data provided by Trendgraphix February 2016. All information deemed reliable but not guaranteed. This is not intended as a solicitation if you are listed with another broker.
Executive Insights Introducing Intero Real Estate’s January 2016 Pacific Coast Market Report It’s just the beginning of 2016, the year is new, there are endless possibilities, and we predict the future to be promising! At least that’s how Tom Tognoli, President & CEO of Intero Real Estate Services, Inc. feels. “I know the financial markets have been a bit rocky the last few months, but when you step back and look at the fundamentals of the Bay Area real estate market, it’s strong! Companies like Apple, LinkedIn, Netflix, Facebook, and Google are flush with massive amounts of cash, they are acquiring land and buildings to add more employees, and interest rates are still at ridiculous low levels. Combine that with the Bay Area being one of the nicest places on the planet to live and it makes me optimistic!” As January rounds out the holiday season, this year we found the Bay Area market started on a somewhat slow note – which was to be expected. As families celebrated the holidays, participated in numerous local Super Bowl events, and endured El Niño, housing sales slowed down. All of which is to be expected at this time of year. So as the weather becomes warmer and the flowers begin to bloom a natural increase in activity should present itself. Overall, we’re seeing the market to be slightly in favor of sellers. Inventory throughout the Bay Area has been somewhat low, giving buyers less to choose from and sellers more flexibility with higher prices. This can be largely attributed to the massive job growth throughout the area. California Association of Realtors (C.A.R.) projected statewide job growth to be 2.3% in California this year, creating the lowest unemployment rate we’ve seen over the past 5 years. To put it simply, more jobs means more people need houses, so as the year progresses, we will see more homes being built to accommodate new jobs, and more homes being put on the market. C.A.R. Vice President and Chief Economist Leslie Appleton Young echoes these sentiments, and provides a detailed outlook: “The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth,” she stated. “However, the global economic slowdown, financial market volatility, and the anticipation of higher interest rates are some of the challenges that may have an adverse impact on the market’s momentum in 2016. Additionally, as we see more sales shift to inland regions of the state, the changes in mix of sales will keep increases in the statewide median price tempered.” Okay – that may have been a little bit much and sounded a little confusing, we know. That’s why we’ve taken a much closer look, and broken it down into bite sized, easy to understand pieces for you. The market changes in meaningful ways each month, and we want to make sure that you’re always provided with the most accurate and up to date information possible so you’re always well informed. If you want to buy, sell, or just get a general sense of your neighborhood, this report has you covered.
Market Highlights Pacific Coast
Total Homes for Sale
232
Luxury Homes for Sale*
62
*Homes for sale above $3 million.
Total Homes Sold
Average Days on Market
Average List Price
Average Sold Price
60
$3,028,000
63
$1,548,000
Inventory Pacific Coast
Total Number Of Homes:
368 316
379
315
258
287
232
200
261
241
280
250
298
300
363
349
350
356
400
Sold
400
For Sale
83
108
110
97 15-May
110
96 15-Apr
87
98 15-Mar
60
67
52
66
50
79
100
136
117
150
0 14-Nov
14-Dec
15-Jan
15-Feb
15-Jun
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
16-Jan
Inventory Insights While January’s market had little change since last month, it leaned in favor of sellers. Total property sales in January increased slightly from this time last year, but decreased significantly from the previous month. This isn’t unusual, though, with seasonal factors taken into consideration. The holidays are historically slower than the rest of the year when it comes to home sales; families want to spend time together undisturbed, the weather is less than ideal, people travel, large events like the Super Bowl happen – you get the picture. The total number of homes available for sale in January marginally decreased compared to last year, and similarly compared to this time last month. This smaller inventory means that those hoping to buy will have fewer homes to choose from, which is great news for sellers! But as winter passes and spring begins, we’ll begin to see more homes on the market, accompanied by more sales. In the luxury market, however, buyers had the upper hand. The total number of luxury homes available in January was moderately higher than this time last year, although it was slightly lower compared to the previous month. Still, higher inventory means more freedom of choice and more negotiating power. For both luxury and non-luxury, as winter passes and spring begins, we’ll begin to see more homes on the market accompanied by more sales. Buyers who are still willing to bide their time should take notice, because as the year progresses and the seasons change, the market will change, too!
Inventory By The Numbers Home Price Range
Homes For Sale
Year Over Year % Difference
< $500K
1
-50%
$500K $1M
60
-30.20%
$1M - $3M
109
-12.10%
$3M - $5M
29
26.10%
$5M - $10M
20
11.10%
$10M +
13
44.40%
Pricing Pacific Coast
Average Prices in $,000:
Active Price
Sold Price
3500 $2,868
3000 $2,480
$2,563
2500
$2,596
$2,693
$2,413
$2,378 $2,394
$2,480
$2,570
$2,945
$3,028
$2,678 $2,669 $2,477
2000
1500
$1,642 $1,351
1000
$1,171 $1,121 $1,080
$1,335 $1,131 $1,151
$1,034
$1,146
$1,081
$1,199
$1,315
$1,548
$1,206
500
0 14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-May
15-Jun
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
16-Jan
Pricing Insights The average “For Sale” price in January was $3,028,000, up a moderate amount compared to last year and slightly compared to last month. The average “Sold” price saw a fairly significant increase from last year and a slight decrease from the previous month, settling at $1,548,000. That’s a pretty large difference between the average listing price and the average sold price, which made January a great time for buyers. This enormous price discrepancy also shows just how much low demand and the power of negotiation can make a difference in home sales! Since we are still getting over the fervor of winter and the holidays, it seems that demand has yet to catch up with supply. As the year progresses, however, demand will continue to grow, leading to more competitive pricing. So, sellers, don’t worry – your time is coming soon!
Pricing By The Numbers
Average Price Per Square Foot.
$741
-0.4% Month over Month
On The Market Pacific Coast
Average Days On Market 100 87
90
79
80 70
66
75
72
68
65
73
71 63
55
60
69
53 46
50 38
40 30 20 10 0 14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-May
15-Jun
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
16-Jan
Days on Market Insights The Days on Market (DOM) shows, on average, how long properties are on the market before they sell. The amount of time it takes a house to sell can help us determine whether buyers or sellers are having a more favorable month. This January’s DOM was 63 days, a little more than a week shorter than the previous month, and more than three weeks shorter than this time last year. In this sense, it was a great month for buyers; the longer a house is on the market, the more likely it is that there will be room for negotiation, and lowered prices. Sellers should not be discouraged, though! Homes are often on the market for at least a month, and while January’s DOM was definitely exceptionally long, we’re still getting over the seasonal lull. Things will pick up as we spring into spring, and again, demand will continue to grow, eventually causing competitive bidding and much faster sales. Stay tuned, sellers!
DOM By The Numbers Home Price Range
Days on Market
Year Over Year % Difference
< $500K
0
N/A
$500K $1M
56
-18%
$1M - $3M
54
-83%
$3M - $5M
274
24%
$5M - $10M
63
100%
$10M +
40
100%