October 2023 San Mateo County Market Update

Level up your homes value with Rumana on your side!

Today's Housing Supply is a Sweet Spot for Sellers... with great opportunities for buyers

Buyers are out, but they don't have many options.

 Why are all these people gathered so merrily together?

San Mateo County Real Estate: 2024 Promises a Fast-Paced Market Fueled by Low Inventory and Surging Demand The San Mateo County real estate market, renowned for its dynamism and desirability, appears poised for an exciting year in 2024. While 2023 was certainly a year of change that brought balance unseen in our market for quite some time, key metrics point towards a significant acceleration in the coming months, driven by a potent combination of decreasing supply and burgeoning buyer appetite. The Inventory Enigma One striking indicator is the dramatic decline in available inventory. December 2023 saw a mere 1.3 months of inventory, compared to the 1.7 months recorded in the same period last year. While this is more inventory than our market usually sees at the end of each year – the typical year-end level is 1.1 months – inventory continues to shrink and new inventory is slow to arrive. This suggests we are approaching a more competitive landscape where properties will be more sought after and move swiftly off the market. Rising Buyer Demand We gauge demand in a few ways. The volume of new pending sales has seen a fourfold increase in just one week, highlighting a surge in buyer activity. Additionally, one of our recent listings in Foster City sold by a staggering 14% over-asking, far surpassing the county’s average of 1% during the same period. This illustrates buyer appetite for good inventory. We also are hearing anecdotal evidence from fellow agents who are seeing increased activity at open houses and for new buyers entering the market. Eye on the Fed External forces, like Fed announcements, could significantly shape the market’s trajectory. Should the Federal Reserve announce interest rate cuts, we could witness a surge in pent-up buyer demand eager to capitalize on lower borrowing costs. This influx of buyers would further tighten the already constrained inventory, potentially pushing prices even higher in the short term. Conversely, sustained high interest rates might keep a lid on buyer exuberance, stretching out the more balanced market dynamic we saw at the end of 2024. These trends offer insights into what we expect for the 2024 market: Sellers Advantage: For those contemplating selling, the landscape presents an opportune moment. The scarcity of available properties places them in a prime position to attract multiple offers and potentially secure exceptional sale prices. Buyer Agility: Prospective buyers must adopt a proactive and informed approach. Be prepared to move quickly, present competitive offers, and potentially adjust strategies to navigate a fast-paced environment. A Market to Watch: Regardless of your involvement, the 2024 San Mateo County real estate market promises to be a captivating spectacle. Stay informed, monitor trends, and prepare for a dynamic year ahead. While these predictions provide a clear direction, it’s crucial to remember that the market remains subject to external factors and fluctuations. Nevertheless, the current indicators paint a compelling picture of a vibrant and fast-paced 2024 for San Mateo County real estate. So, buckle up, engage your strategic minds, and embrace the exciting journey ahead! Ready to delve deeper? Feel free to reach out with your questions. I’m always happy to share my knowledge about the ever-evolving San Mateo County real estate landscape.

Is Your House the Top Thing on a Buyer’s Wish List this Holiday Season? Every year, homeowners and home buyers contemplating a move face the decision: act now or wait until after the holidays? While some may pause or remove their listings, the holiday season can actually be an great time to sell. Plus, most buyers search for homes online. After family meals and gatherings when people are in a warm and fuzzy mood, browsing for homes, it could be an opportune time for you home to show up in their search. Buyers, too, can find opportunities during a time when many are on vacations and there is less competition compared to busier spring and fall markets. According to Dave Ramsey , “If you checked the numbers, you’d find that plenty of homes are sold during the coldest months of the year. From December 2022 to February 2023, nearly 800,000 homes sold in the U.S. That’s a lot of houses!” So if you’ve been wondering whether to put off buying or selling a home until spring, we recommend don’t wait, there are several advantages to buying or selling this winter. Here are four reasons why you should sell or buy your home during holidays! Less Inventory, Less Competition Winter really is a sweet spot. When spring time hits, the real estate market transforms into a crowded battleground with numerous options. This makes it difficult for sellers to stand out from the crowded marketplace, and puts buyers in a squeeze competing against potentially multiple other buyers. In winter though, there are fewer homes on market and fewer buyers out and about with the intent to purchase, so competition for both sides dwindles. As a seller, this is an ideal time to have your home standout, and as a buyer this is a great chance to shop for a new home in a less competitive environment. Appealing to Growing Families How many family gatherings have you been to that are just busting at the seams? Not enough chairs or space at the table, some people brave a cold patio or huddle on the couch. After a packed family event some may look to have more space for next year’s gathering. To add to the mix, more babies are born from July to October than any other time which sets the stage for more families looking to upgrade their homes later in the year. Melissa Temple shares with REALTOR.com , “Once baby is home and settled, these parents may want to start the year in a new, and more spacious, family home.” The Year End Brings out Serious Parties While some people go out casually looking at home in the spring and fall months, imagine how serious a potential buyer is navigating through freezing weather or taking a break from holiday festivities to explore your home. Winter buyers are often driven by pressing deadlines, such as expiring leases, relocations, or contracts on their current homes. This urgency increases the likelihood of a swift and serious purchase. San Francisco Real Estate Agent Nina Hatvaney shares that “the end of the year can be a good time to buy a home since some sellers may be motivated to offload their property before year’s end. If they’re going to take a loss, they can write it off on that year’s taxes…. the end of the year can weigh on a seller psychologically. They want to know it will be resolved by the end of the year,” she said. In short, in the winter, people want to get the deal done and have less time to fool around. Make the Most of Festive Free Time While the holiday season might seem like an unlikely time for home hunting, it unveils a unique opportunity. Contrary to the assumption that people are too busy, many individuals actually enjoy more time off during the holidays. This translates to increased moments for browsing through home apps, envisioning future decor, and even scheduling home showings. Don’t underestimate the power of holiday downtime when it comes to capturing the attention of potential buyers.

What we know, what we don’t, and other information we are sharing with clients Many people are asking about the consequences of the recent National Association of Realtors (NAR) lawsuit. The federal government prevailed against the real estate industry, with the penalty calculated to reach somewhere north of $5 Billion. Some are using this verdict to predict the doom of the industry, or at least the end of how we do business. As usual, headlines seek to stir up emotions so you will click and read their story. The reality is more mundane. For one thing, the decision is being appealed, and there is a good chance it will be overturned. And even if the suit ultimately does prevail, it is going to take several years. The industry will learn to adapt. Here is a little recap of the issue, and my particular take on it. What was the lawsuit? The lawsuit claims that the current standard, whereby sellers pay the buyer-agent’s commission, puts the buyers at a disadvantage. It asserts that the practice forces buyers to pay a commission (because the commission is built into the purchase price) and deprives buyers of their chance to find their own representation and negotiate their own commission -if any. The theory is that having sellers pay both sides of the commission has artificially jacked up the price of real estate. At first blush, I can understand how buyers might be inclined to agree with the headlines. The price of a home seems to bake in a 2.5-3% commission. But as you analyze the practice more fully, you’ll realize that buyers actually benefit from the current practice for a few reasons I am happy to outline here. Why is the judgment wrong? Brokerages do not conspire First, brokerages and agencies do not conspire on commission rates. Each brokerage is in competition with the others (and each agent within and between brokerages is in competition for your business). The commission rate has historically been about 6%, split between sellers and buyers agents. This has never been a firm number and is always negotiable. It stays at about this rate because sellers don’t want to spend more on their side, and offering less to the buyer’s agent is not fair to that party. Yet, you will see rates down to 1% from some brokerages that are eager to attract new business. And some even go higher than 6% (7% is the highest I have personally seen). It is negotiable. Who chooses the Buyer-Agent? Buyers always have their own choice of representation. The fact that the commission largely comes from the selling side means buyers don’t have to shop for a buyer-agent by price, but only by reputation and experience. Still, many buyer-agents will offer a kickback to buyers in order to attract more business, and other agents require their buyers to pay them even more commission than is being offered by the sellers. Again, it is always negotiable. Current California regulations require that listings display the commission being offered to the buyer-agent, so each buyer knows what their agent is being paid before writing an offer. They may negotiate around this point with their agent. Will this rule affect sales price? Have you ever looked at a Home Valuation, such as Zillow or Redfin? What is your home worth? Owners frequently inquire or research the price they may get from the sale of their home. The question of home value always precedes any thought about selling costs. The question is always, “What is my home worth.” Only later will sellers inquire, “What will I net in the sale.” When the home goes on the market, the List price is likely near the sellers’ goal, but the price will be buoyed or sunk by buyer demand. In good times, prices go 10-15% higher than the list price; in worse times, they may get 10-20% less than they hoped. The point is the selling price is the price buyers are willing to pay, not the price sellers want. The costs incurred are secondary to sellers, who always want the highest possible price. If sellers have a hard number they must attain on the net, they may decide whether or not to sell. There may be discussions about the commission in regard to their closing costs. Again, commission is always negotiable. If the lawsuit prevails and removes the standard for sellers to pay the buyer-agent commissions of 2.5% or 3%, sellers will net more money. The price of homes is not going to go down simply because sellers have lower closing costs. Sellers will end up netting more, and buyers will end up paying more for the home. Will buyers still get representation? Currently, business is continuing as usual, and buyers have the peace of mind that their choice of agent is being paid by the seller when escrow closes. Remember, buyer-agents can represent clients for every listing on the market. Buyers have a choice of buyer-agent, and unless they have a separate agreement to pay less (or more) commission, they can choose the best agent they can find and not worry about the cost. They can use their realtor-cousin, or the neighborhood expert – the cost to the buyer will be the same. If the lawsuit ultimately prevails, buyers may be hurt by a lack of representation. They will need to find a good agent, most of whom will likely continue to charge 2.5-3% (believe me, they deserve it!). Some buyer-agents may represent buyers for a flat fee or a lower commission. Whatever that is, it will be in addition to the purchase price. Buyers will be paying extra, on top of the sales price. Due to this, instead of choosing the best agent they know, buyers are likely to find the cheapest agent they can find. I don’t think I need to spell that out any further. How often do we learn that you get what you pay for? If you would like to read more about the NAR lawsuit, go ahead and check out these additional resources: SF Chronicle NAR Litigtaion FAQs NAR Article: $1.8 Billion Lawsuit Could Upend the Real Estate Industry Money.com Article: Here’s What’s Next for the Housing Market After a Massive Realtor Lawsuit Rumana is ready to discuss the current environment with you Transparency is a hallmark of Rumana’s business, and commission is always discussed as part of the listing agreement or buyer representation process. If you have additional questions, connect with Rumana to discuss.

Is the Bay Area Real Estate Market really going to burst?

Thanksgivi ng is a time of reflection on your life. These are local organizations that Rumana supports and, if so moved, they could use your support as we inch closer to the end of the year.