A Berkshire Hathaway Affiliate
Buy.Sell.Stay. January 2016 Market Report South County Gilroy, Hollister, Morgan Hill
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 South County 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 South County
Total Homes for Sale
176
Luxury Homes for Sale*
5
*Homes for sale above $3 million.
Total Homes Sold
Average Days on Market
Average List Price
Average Sold Price
105 $1,144,000
50
$722,000
Inventory South County
Total Number Of Homes:
For Sale
Sold
50
105
177 92
121
135
128
119
166
176
224
253
266
212 157
212
15-Jun
104
95
154
205 163
187
187
171
173
15-May
79
100
103
150
114
200
208
246
250
258
300
0 14-Nov
14-Dec
15-Jan
15-Feb
15-Mar
15-Apr
15-Jul
15-Aug
15-Sep
15-Oct
15-Nov
15-Dec
16-Jan
Inventory Insights Much like last month, January’s market favored sellers. Total property sales in January increased by a fair amount compared to last year and decreased slightly compared to this time the previous month. That’s pretty historically typical with seasonal factors taken into consideration. The holidays are generally 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 increased compared to last year, and decreased negligibly compared to this time last month. This smaller inventory means that buyers who are ready to buy a home will have fewer choices; reduced inventory makes the market much more competitive, which is great news for sellers! 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
26
-30%
$500K $1M
105
31.30%
$1M - $3M
40
-14.90%
$3M - $5M
1
-80.00%
$5M - $10M
2
0%
$10M +
2
N/A
Pricing South County
Average Prices in $,000:
For Sale Price
Sold Price
1400
1200
1000
$964
$980
$1,037 $1,033
$1,141 $1,121 $1,125 $1,097 $1,021
$1,090 $1,076 $1,054 $1,073
$1,127 $1,144
800
600
$657
$684
$618
$627
15-Jan
15-Feb
$648
$699
$677
$724
$762
$711
$720
15-Aug
15-Sep
$731
$718
$731
$722
400
200
0 14-Nov
14-Dec
15-Mar
15-Apr
15-May
15-Jun
15-Jul
15-Oct
15-Nov
15-Dec
16-Jan
Pricing Insights The average “For Sale” price in January was $1,144,000, a decent increase from last year and a slight increase from the previous month. The average “Sold” price saw a significant increase from last year and a negligibly small decrease from the previous month at $722,000. The difference between the average listing price and the average sold price is a decent chunk of change, which was great for buyers and really shows how impactful negotiation can be! 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.
$328
4.6%
Month over Month
On The Market South County
Average Days On Market 70 60
63
63
53
49
50
49
46 38
40
33
36
32
30
29
41
40
15-Oct
15-Nov
50
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-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 50 days, just a few days longer than the previous month and nearly two weeks shorter than 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! While January’s DOM was relatively long, it’s quite common for a house to be on the market for at least a month, if not longer. And again, demand will continue to grow with time, causing an influx in competitive pricing and much faster sales. Stay tuned, sellers!
DOM By The Numbers Home Price Range
Days on Market
Year Over Year % Difference
< $500K
31
-129%
$500K $1M
50
-22%
$1M - $3M
85
51%
$3M - $5M
0
N/A
$5M - $10M
0
N/A
$10M +
0
N/A