Results are in for the 1st half of 2010 and there are some interesting points
to be made. The chart below shows data from a few mid-peninsula cities
starting with the first half of 2007 and ending with the most recent data
from the 1st half of 2010. All these data are from MLS Listings, the local
multiple listing service.
to be made. The chart below shows data from a few mid-peninsula cities
starting with the first half of 2007 and ending with the most recent data
from the 1st half of 2010. All these data are from MLS Listings, the local
multiple listing service.
As a cautionary note remember that the average and median prices for each of
the periods and for each city need to be taken with a grain of salt for a
couple of reasons:
1. Each town contains a good deal of variability in neighborhoods which is
mased as it is accumulated by town.
2. The sales prices are a collection of the particular houses sold in that
period. Particularly in markets that are making changes, in any given period
there may be more of a particular category of house sold than another – more
houses that have been fixed up, or more that haven’t, more with large lots,
or more on busy streets. So to take the average prices as truly representative
of price changes would be a mistake. To accurately assess price changes, the
analysis really needs to be based on same house sales and even then it can be
tricky because of changes in condition of the house.
the periods and for each city need to be taken with a grain of salt for a
couple of reasons:
1. Each town contains a good deal of variability in neighborhoods which is
mased as it is accumulated by town.
2. The sales prices are a collection of the particular houses sold in that
period. Particularly in markets that are making changes, in any given period
there may be more of a particular category of house sold than another – more
houses that have been fixed up, or more that haven’t, more with large lots,
or more on busy streets. So to take the average prices as truly representative
of price changes would be a mistake. To accurately assess price changes, the
analysis really needs to be based on same house sales and even then it can be
tricky because of changes in condition of the house.
Looking at the table below, and really focussing on the Total Sales Volume
data, you can tease out several stories. The last column calculates the year
over year changes in total sales volume (total dollars of real estate sold).
data, you can tease out several stories. The last column calculates the year
over year changes in total sales volume (total dollars of real estate sold).
For example, The first line shows that in Atherton, total sales volume
declined in the first half of 2007 compared to 2006 by 28%, which is pretty
significant. East Palo Alto was dropping by that time, as well, but all the
other towns had increases in total volume then. In the 2nd half of 2007, Menlo Park and Redwood City showed lower total
volume compared to the year prior in addition to East Palo Alto and Atherton. In the 1st half of 2008, every city showed the declines in total volume sold.
declined in the first half of 2007 compared to 2006 by 28%, which is pretty
significant. East Palo Alto was dropping by that time, as well, but all the
other towns had increases in total volume then. In the 2nd half of 2007, Menlo Park and Redwood City showed lower total
volume compared to the year prior in addition to East Palo Alto and Atherton. In the 1st half of 2008, every city showed the declines in total volume sold.
Then, in the 2nd half of 2008 (remember Lehman Brothers marked the financial
crisis watershed on September 16, 2008), East Palo Alto showed a significant
upturn in volume while all the rest continued to decline. This was a result
of the large number of foreclosures in East Palo Alto that suddenly became
available at prices that could actually clear the market (about 1/2 the
values they reached in 2006 and 2007. In East Palo Alto, the balloon popped quickly
while in other communities it took more time as sellers, many with
significant equity, were able to withstand market pressures by simply holding on to their
homes.
crisis watershed on September 16, 2008), East Palo Alto showed a significant
upturn in volume while all the rest continued to decline. This was a result
of the large number of foreclosures in East Palo Alto that suddenly became
available at prices that could actually clear the market (about 1/2 the
values they reached in 2006 and 2007. In East Palo Alto, the balloon popped quickly
while in other communities it took more time as sellers, many with
significant equity, were able to withstand market pressures by simply holding on to their
homes.
What is really intersting to see is that volume is currently increasing, for the
second semi annual period, in most of the towns (not East Palo Alto where
prices adjusted earlier). This is a significant sign that the sellers have
adjusted their expectations to current market conditions and prices clear the
market. My greed for information makes me long for a cystal ball to tell what happens
next….but we will just have to wait.
second semi annual period, in most of the towns (not East Palo Alto where
prices adjusted earlier). This is a significant sign that the sellers have
adjusted their expectations to current market conditions and prices clear the
market. My greed for information makes me long for a cystal ball to tell what happens
next….but we will just have to wait.
In the mean time, if you have questions about your particular community or if
you are interested in knowing how this might impact your plans to sell or
buy, drop me a line; I am happy to dig a little deeper for you.
you are interested in knowing how this might impact your plans to sell or
buy, drop me a line; I am happy to dig a little deeper for you.
