The Silicon Valley luxury market remained resilient in 2023 despite rising interest rates, a banking crisis, and financial and geopolitical uncertainty. The rate of home appreciation continued to slow but the extremely low supply of new listings maintained a buffer on price declines. The number of $10 million and above sales surpassed 2022 and came close to the record high of 2021. After its end-of-year rally, the NASDAQ index was up 45% in 2023. This should give confidence in 2024 to the tech industry, which is the biggest driver of our local real estate market. Historically, we have had a high demand, low inventory market and we expect this trend to continue as Silicon Valley and the Peninsula remain among the most sought after places to live in the Bay Area.
How to Price Your Home in 2024
Across the Bay Area, overpricing leads to much lower sales-price-to-original-list-price percentages and much longer days on market (of course), but also an approximate 5% - 9% drop in the average dollar per square foot value. (Which doesn't include expired/withdrawn listings that don't sell at all.) These numbers are generalities: details will vary between listings - price segment, how much they're overpriced, how soon and how much they reduce their prices.
Dangers of Over Pricing 2020
We hope this letter finds you well and that you are coping with the new environment that we live in today. We are now 5-and-a-half months into Shelter-in-Place and selling real estate with strict new protocols in place to preserve the health and safety of our clients and colleagues. When Covid19 first hit and the quarantine guidelines went into effect in March 2020, we could not predict what was going to happen to our local real estate market. However, in April our real estate market came back to life and has continued to do so through the summer.
Buyers who are committed to staying in the area are looking for homes with offices and larger outdoor space as they grapple with working from home while housing both young and older college-aged children. Mortgage rates continue to be very attractive, which is helping these “move up” buyers stretch into larger homes.
While we are pleased with the level of buyer activity, there has also been a migration out of the area to other states that offer a more balanced lifestyle and a lower cost of living. Sellers need to adjust to the effects of this new environment and recognize that while prices are still healthy they are no longer on a continued uptick as we were used to historically.
Lastly, we have seen our marketplace bifurcate into two categories: a) Properties priced under $5 million are selling consistently within 2 to 3 weeks and are receiving 1 to 2 offers. b) Properties above the $5 million mark are taking longer to sell and sometimes need to initiate a price adjustment in order to find that clearing price.
Overall, we feel very fortunate that we live in an area where the “Covid effect” has not hurt our market to the degree that it has across the country. However, there are still many unanswered questions for the next year as we face the near-term election, additional reports of job losses, and the unknown impact of the immense vacancies in the local commercial real estate market.
If we can be helpful with market information, a property valuation, or recommendations for local vendors, please contact us at any time. Be safe and well!
A Message from LeMieux Associates
Dear Clients and Friends,
We hope this finds you healthy and well during this unprecedented time. None of us could have predicted just weeks ago that our world would be in such a state of unknown. As we navigate this new environment, we try to seek out ways to find solace in the simpler state of each day as we honor the Shelter-in-Place (SIP) mandate. It is important to take care of our minds and physical wellbeing and we send you our best during this time. We are here to answer your questions, discuss the market and provide advice in any way we can. We continue to practice a positive mental attitude and believe that one day – hopefully soon – our lives will resemble something that feels like normal again.
Real Estate Recap & Forecast
As we move into 2020, the stock market continues with strength which is correlated to the robust home prices. However, 2020 is an election year which may cause some uncertainty for the Fall market. We anticipate a higher volume of listings this Spring as sellers seek to capture value on their properties. In 2019, the days on market (DOM) remained flat or increased depending on the city and neighborhood. There is more balance between supply and demand and thoughtful pricing is important to a successful sale. With median sales price remaining flat in 2019, we saw the first year since 2012 in which sales prices did not rise (see chart below). UC Berkeley economist, Ken Rosen, predicts Bay Area median prices to remain flat with a potential range of +/-2%.
2019 Winter Real Estate Update
The Holiday season is upon us and we would like to express our gratitude for your continued support of our real estate business. Without you we couldn’t continue doing what we love which is helping people buy, sell and invest in real estate.
As we reflect on the 2019 real estate market, we have seen a change in the market dynamic and although sale prices are no longer appreciating at the same rate of recent years, they remain at historical record levels.
As the market becomes more balanced, inventory has increased and the days on market are slightly higher. Despite this, we still have a strong local market with more demand than supply which helps support sale prices. Additionally, mortgage interest rates remain favorable under 4% and the stock market has shown strong gains in 2019. Whether a client, family or friend, please contact us if you need anything – such as a vendor recommendation to help with home improvements or have questions about your property value - we are here to help with all matters real estate related.
What is the Compass Concierge Service?
Maximize the value of your home.
Compass Concierge is the hassle-free way to sell your home faster and for a higher price. From painting to flooring and everything in between, Concierge transforms your home with zero upfront costs and no interest - ever.
Exclusive to Compass, our Concierge program is among a suite of services designed to prepare your home for the market. Whether it’s roofing repairs, moving and storage costs, or additional needs, we will work with you to assess every opportunity to elevate your home’s value and improve your selling experience.
With Concierge, you don't have to pay the initial out-of-pocket costs for home improvement services. When your home sells, simply pay back the funds that the program provided and nothing more. Funds will be advanced to you for the home improvement services with no interest cost. When your home sells, you’ll pay the costs of services rendered and nothing more. By helping you invest in your home's potential, we aim to provide a faster and more profitable sale.
September 2019 Real Estate Update
September 2019 Report
After the heat of the spring market, activity typically slows down markedly in July and August. In September, listings start pouring on the market again to fuel the relatively short autumn selling season - in fact, September is sometimes the single month with the highest number of new listings. What occurs in the next 2+ months, before the mid-winter holiday doldrums begin, will be the next major indicator of market conditions and direction.
People Moving In & Out of San Mateo County
Median House Sales Price Trends
Bay Area Luxury Home Sales
U.S., Bay Area Homes Sell Faster When Staged
Sellers hoping for a speedy sale should seriously consider staging their homes, a process that most real estate professionals believe helps a buyer better visualize the property as their own. That’s true here in the Bay Area, where staged homes not only sell nearly twice as fast but receive more offers and command higher prices.