San Mateo County Real Estate Spring Market Heats Up, But It’s Cooler than Spring 2018
With April’s end, we now have 2 months of spring season data unaffected by market activity at the end of 2018, when financial markets plunged. As of early May 2019, stock markets have recovered to hit new highs, interest rates are far lower than last year’s peak, and unicorn IPOs have begun to roll out after a media frenzy of speculation on their potential effects on our real estate markets. However, so far, median home sales prices have not quite returned to the peaks seen during the ferociously hot market of spring 2018. This is a big change from the substantial year-over-year appreciation rates of the past 6-7 years.
This is a relatively common dynamic around the Bay Area – in fact, many counties have seen more cooling and slowing than San Mateo County. And, of course, the spring selling season is not yet over.
Monthly Median House Sales Price – 2 Years
For the time being, home prices in the most expensive housing markets in the country – San Francisco and San Mateo Counties – have stopped getting more expensive. But that is not a prediction for what may come.
This table compares the March-April market statistics of 2018 and 2019. Some indications of a softer market in spring 2019 across most of the statistics measured, though luxury home sales ticked up year over year.
Two months would still be considered very short-term data.
Home Sales by Price Segment & Bedroom Count
An illustration of the last 12 months of house, townhouse and condo sales broken out by price range and number of bedrooms.
Home Sales, Prices & Sizes by City
The next chart breaks out the number of house sales over the past 12 months by city, with median house sales prices, median square footage, and median bedroom/ bathroom count. (Median means half the sales were for more, or larger, and half for less, or smaller.)
Below is a review of sales, prices and sizes specifically for 2-bedroom, 2-bath condos. (The first bar refers to the city of San Mateo.)
Luxury Home Markets – San Mateo & Santa Clara Counties
The number of home sales of $3 million+ by price segment, average dollar per square foot value, and median square footage. The Silicon Valley luxury home market is by far the largest in the state.
Q1 2019 “Ultra-Luxury” Home Market – San Mateo County
We typically define the “ultra-luxury” market as starting with prices of $5 million. This is a glimpse at dynamics during the 1st quarter of the year. Note the differential between median sales prices and median list prices, especially for those listings that expired without selling. Of course, the higher the price, the smaller the pool of potential buyers.
Q2 is typically the most active quarter of the year for luxury and ultra-luxury home sales.
Home Size & Era of Construction
Many factors influence home construction size during any particular period: Affluence, economic conditions, household size, buyer age, land costs, population growth, highway construction, natural disasters, etc. Generally speaking, the median size of houses built earlier in the 1900’s was somewhat larger than those constructed mid-century during the WWII-and-right-after boom. It then started increasing again, and now, newly built houses are larger than ever.
Note that the figures below are based on recent home sales, and that over the intervening time since original construction, adding a second bathroom and/or a third bedroom behind the garage to older homes were popular renovations.
Over the past few decades, condos have become a major alternative for people purchasing homes of smaller size.
Selected Demographic & Economic Factors
New census figures have just been released: The latest surge in county population began 10 years ago with big increases through 2015/2016, increases which paralleled the tremendous jump in high-tech hiring. However, in the last 2 years through mid-2018, annual growth figures began to markedly slow.
By number increase, San Mateo County ranks 5th (adding almost 50,000 residents), and by percentage increase, 6th (+7.1%) in the Bay Area for population growth since 2010.
As a point of comparison, from 1940 to 1960, the county’s population went from 112,000 to 444,000, equaling almost 300% growth over the 20 years. New homes were being built as fast as they could be framed up.
Venture Capital Investment
In recent years, the Bay Area has been the biggest destination of venture capital investment dollars in the country – and probably the world. These tens of billions of dollars have constituted a massive factor in the local economy, supercharging the creation of new companies, hiring, and, eventually, IPOs. Ultimately, venture capital is seed money that in the last decade has exploded into the creation of stupendous amounts of new wealth.
It is impossible to know how median and average value statistics apply to any particular home without a specific comparative market analysis. These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.