Real Estate Diaspora

diaspora

Sort of coming on the heals of that last post I wrote about changing criteria is the also new phenomenon of buyer flight to the East Bay and South San Jose. It’s a veritable Real Estate Diaspora. Folks that would just as soon live in Foster City are taking flight and buying in Fremont or Blossom Valley.

Yesterday I looked at offers on a condo on Lido that I had listed. We got 13 offers and it went WAY over the $829,000 asking price. The question for buyers now is, what can we do if you can’t afford at least $1,000,000 on a home? Incredibly, you’re not going to be able to buy in Foster City now unless you buy a condo. Townhouses and Single Family are out. Last week an agent friend of mine won a bidding war on a 3 bedroom townhouse in Mountain View that was also listed for $829,000. It sold for $1,051,000. You can still get a townhouse for less in San Bruno, Pacifica, South San Francisco or Daly City but like I said before you might not be too happy with the schools there.

This diaspora I’m talking about is coming as a shock to the agents in Fremont and South San Jose. As recently as November, single family houses were getting multiple offers and selling for $20,000 over asking. Now they’re getting a gazillion offers and going for $150,000 over asking. In just a few months this has happened. Last week I wrote an offer on a fixer upper 3 bedroom house in the Cambrian section of South San Jose. It was listed for $725,000. They got 27 offers. Many from the Peninsula the listing agent told me. It sold for $860,000. Today, I wrote an offer in Fremont on a house listed for $789,000. The agent told me she had 26 offers!! The majority from Peninsula and San Jose agents! I think this house is going for $900,000.

What a freaking world! Meanwhile, my seller on Lido is moving to Oregon where he’s found a 3400 sq ft house with a master suite that’s about as big as his Lido condo…for $510,000. No competition either!

As an agent, this sure is a strange phenomenon. I had a fellow agent tell me he wouldn’t work with a buyer unless they were qualified to $1,300,000. Sheesh! Buy a condo for $800,000 or compete in Fremont and then have a 2 hour commute. If you’re lucky enough to get the Fremont house in the first place!

Altered Criteria

Path across labyrinth

One thing that always happens in hot markets is a buyers criteria gets reduced. In a slow market a buyer can afford to be picky and bad locations, plenty of needed improvements or schools that don’t have API scores over 900 can eliminate a property from someone’s choices. Not now though! I mention the API score thing because, in my experience, the better the school the more desirable the home. In fact, I’d say that the quality of the schools has really become the Holy Grail when it comes to where people want to live. One of the things that is REALLY shocking me in this particular market is how the escalation of prices has significantly eroded even these dearly held notions.

The truth is that if you’re qualified up to $1,000,000 and you want to buy a house in an area with API scores over 850 you’re pretty much screwed in the area between Millbrae and Redwood City. As I’ve written about before…it won’t be long until that’s the case with townhouses in Foster City as well. This is actually amazing and what’s happening is that folks are deciding that buying in San Mateo (for example) is better for their situations than buying in Fremont or South San Jose where schools are better. In the last several months 7 houses have sold in San Mateo Village over $1,000,000. I clearly remember when a house on Pasadena Street there listed for $305,000 and I thought the sellers were crazy. A million dollars for The Village? Amazing! The API for the school there, George Hall, is 823. I also heard about another house in San Mateo on the west side with the school’s API of 831 just sold $500,000 over asking at $2,200,000.

Last year I had a listing in South San Francisco that got 2 offers and sold for $15,000 over asking. The market in Foster City was super hot then too. The reason for the slowness there? The school’s API is 800. Last week I listed a townhouse up there in an area where the school’s API is 818…I have 11 disclosure packets out on it today and I’m looking at offers on Monday. 9 of the 11 disclosures are from agents in San Mateo and Burlingame. Their buyers would prefer the Mid Peninsula but they have to compromise. My suspicion is that what they’re deciding is to buy in these areas but have their kids attend a private school. Either that or decide to move to Fremont or Blossom Valley and commute to San Francisco (or San Mateo or wherever).

What a choice these prices are putting on people! Buy here and get something much smaller than you need or want…if you can buy at all, or eliminate most of your criteria including good public schools to save yourself a 2 hour commute. The storm that I thought was coming is really a lot worse than I thought.

Foster City 2014 Condo/Townhouse Statistics

OrderStatistics

As I’ve mentioned before on this blog, condo/townhouses are a lot more difficult to draw conclusions about because there are problem projects and great projects and some are way up and others not so much. Thus that should be considered when thinking about the overall statistics about FC. Let’s get started…how about the total number of units sold. Here’s the history:

2006…240

2007…165

2008…112

2009…140

2010…143

2011…144

2012…156

2013…169

In 2014 the number was 176. Pretty interesting since there has indeed been low inventory. It’s nowhere near the high of 2006 but I suspect that unlike many years, everything that came up sold. Now how about the average prices:

2006…$661,993

2007…$694,026

2008…$635,839

2009…$577,267

2010…$577,150

2011…$512,192

2012…$551,000

2013…$657,000

In 2014 we hit an all time high….$744,522! Most projects in Foster City did indeed have all time highs as well. What’s 2015 going to bring? More all time highs if you ask me. We’ll see…

Foster City 2014 Statistics

stats

So every year I write this post and the story has been pretty much the same…less sales as the result of bad inventory. Last year I marveled at the fact that only 106 single family houses sold in 2013 and how that was the lowest number since the lean year of mortgage meltdown in 2008…when there was only 99 closed sales. Well, in 2014 there were 99 closed sales. Again, this wasn’t because of low demand. It wasn’t because there was an international crisis that stopped the market. It was simply because there was no inventory.  I also marveled at the fact that the average days on the market in 2013 was only 20 days. That was miniscule compared to 37 in 2006 (the market’s previous high point) and then 65 in 2009. Guess what? In 2014 the DOM was 15!!!

Now for the really scary numbers. Here’s a breakdown of the average sales prices since 2006:

2006…$1,078,000

2007…$1,113,000

2008…$1,118,000

2009…$1,010,000

2010…$1,004,000

2011…$976,000

2012…$1,021,000

2013…$1,236,000.

Hold onto your hats…the average sales price for 2014 was $1,359,000! I mentioned this before, but there was only ONE home that sold under $1,000,000 in 2014. In 2013 there were 22 sold under $1,000,000. Today there’s a new listing on Beach Park that came up for $1,748,000. The most money EVER spent for a house on that stretch of Beach Park? $1,400,000. The most in ANY stretch of Beach Park…$1,540,000. We’re on a wild ride, huh?

Highs & Lows 2014-Condo/Townhouses

OK, so how about these guys:

 

MOST EXPENSIVE CONDO/TOWNHOUSE:

promo

740 Promontory Point #3404 This large 2697 sq ft unit sold for $1,290,000. The high in 2013 at Promontory Point was $1,012.500. Same size place.

HIGHEST PRICE PER SQUARE FOOT:

ERICK

834 Erickson at Winston Square, in only 1380 sq ft, sold for $1,050,000…a whopping $760.00 per square foot.

LOWEST PRICED CONDO:

ADMIR1

2110 Admiralty Lane This little 1 bedroom unit closed for $337,500. The 2013 low…$280,000.

LOWEST PRICE PER SQUARE FOOT:

ADMI1

1214 Admiralty Lane The Admiralty is always going to come in last it seems. This 3 bedroom unit sold for $510,000…or $338.00 per square feet.

LONGEST ON THE MARKET:

till

1082 Tiller This unit was on the market for 105 days, but was originally listed as a short sale and was rescued by the market and sold as a regular sale for $848,000.

GREATEST OVERBID:

PORTO

664 Portofino So much for Island J’s problems. This unit was listed for $825,000 and sold for $995,240. An overbid of $170,240!

GREATEST AMOUNT UNDER THE ORIGINAL LIST PRICE:

TOWNG

219 Town Green Lane It’s actually very remarkable that so few places sold under asking…I only found about 5 out of 176. The place closed $45,000 under asking. Very unusual last year.

Highs & Lows 2014-Houses

 

 

Happy New Year! Now let’s see what happened in 2014.

 

MOST EXPENSIVE HOUSE;

ports

620 Portsmouth This 5 bedroom, wide water gem at Whalers in 2710 sq ft sold for $1,930,000. The 2013 high was an aberration, a 4300 sq ft waterfront that went for $2,225,000. The 2012 high was $1,520,000.

 

HIGHEST PRICE PER SQUARE FOOT;

 

ARUBA

934 Aruba This 1810 sq ft waterfront at Plum Isle went for an amazing $1,750,000…or $966.00 per square foot. Last years high was $807.00 and I thought that was massive.

 

LOWEST PRICED HOUSE:

 

MAIN

200 Mainsail This fixer upper Eichler sold in May for $981,000. Incredibly, it was the ONLY single family house in Foster City to sell under $1,000,000 in 2014. Interestingly, the buyers fixed it and flipped it in July for $1,455,000.

 

LOWEST COST PER SQUARE FOOT:

 

PUFFIN1

217 Puffin This fixer sold for $1,140,000…after awhile on the market too. It’s all of 2540 sq ft making it sell for $448.00 per square foot.

 

LONGEST ON THE MARKET:

TEAL

633 Teal  This place was on the market, technically, for 157 days. That’s a bit unfair since it was on at the end of 2013 and didn’t sell. The sellers changed agents and 25 of those days were lost during the agent change. Nevertheless, it was on for awhile. The second longest house took only 35 days to sell.

GREATEST OVERBID:

ARUBA

Guess what? It’s that Aruba house again! This place was listed for $1,288,000 and the sale price was $1,750,000. $462,000 over asking. Amazing.

GREATEST AMOUNT UNDER ORIGINAL LIST PRICE:

BARK

112 Barkentine This place sold in 24 days, but it went $110,000 under asking. Go figure.

 

 

 

Numbers

I saw some numbers this morning that shocked me…and that’s actually kind of an amazing thing all by itself. In 2013 (which was a great year by the way) the slowest month for sales was, not surprisingly, December. In December of 2013 there were 1188 transactions. Compared that to 1878 transactions in September of 2013…the highest month.

In 2014 the biggest sales month was May and it came in at 1718 transactions. Less, but not enormously. The number for December 2014 was what was most surprising. There were only 629 sales. Less by almost half of the already low number of 2013! This number didn’t come as the result of a slower market and low demand…it came because of the incredible lack of inventory. What’s just as scary is the fact there was only 945 sales in November 2014….and 1538 in November of 2013.

Right now today there’s 4 whole properties on the market in Foster City. Two houses and two condos. That’s it! If this doesn’t turn around the January 2015 number is going to resemble Decembers number. It’s really scary out there.

Living Proof

So, right after I write that post about the storm coming…here comes the proof. Last night a 1700 sq ft 4 bedroom house at 908 Constitution hits the market priced at $1,358,000. The house looks nice, but the last 2 comparables of this floor plan in Foster City closed last April and May (that’s 2014 mind you) at 899 Constitution and 936 Constitution…for $1,230,000 and $1,258,000. Both of these places went over their asking prices by at least $130,000. Now we have this place listed a full $100,000 over the last comp for Foster City.

Here’s the problem…no inventory. As much as it pains me to say it, this place will almost certainly get multiple offers. How could it not? What does this all say about values around here in 2015? At least to start it certainly doesn’t mean that prices will decline. Been to any open houses lately? There’s certainly no shortage of buyers. It’s scary.

Light Years Apart

See that house up there? It just closed on Martinique in Pitcairn. It’s a 3 bedroom, 2.5 bath house. The floorplan has a huge master suite. It was listed for $1,298,000 and closed at $1,383,000. In my opinion it needed work. It also had this weird feature, the seller cut a hole in the wall between the living room and the garage and enclosed the laundry area (formerly in the garage) allowing access from the living room. I guess it felt more convenient that way?

I guess it struck me as remarkable because I sold the identical floorplan right across the street in 2010 for $960,000. It was in a lot better shape and it took 26 days to sell. In fact it was originally listed for $988,000 and sold under asking. The fact that the house above did what it did is certainly amazing. It had foundation issues too. This is where we are now.

Currently in Foster City there’s a whopping 2 active houses for sale. One is a probate that’s already received offers and is just waiting for a court date to make the sale official. In other words…it’s sold. The other is an Eichler that’s being used as an elder care facility. It needs some work. It’s been off and on the market for 200 days now. It’s priced at $1,288,000. Since it’s the ONLY house for sale maybe they’ll get it now?

It’s really amazing what’s happened here. A house that sells for $1,200,000 here seems cheap now. I’m actually not sure you can buy a house that cheap here. Seriously.

 

What’s Changed?

So every time I hold a place open in Foster City I hear somebody comment that the inventory is way up. Yay! Just look at it all…they exclaim. I used to do charts here identifying inventory in both single family houses and condo/townhouses in Foster City. I stopped doing it because there wasn’t any inventory to report on! Last time I did one was September of 2011. At that time there were 30 single family homes listed for sale and 18 pending sales. In condo/townhouses there were 38 active and 14 pending.  Today in this land of bounty and opportunity there’s 11 single family for sale and 9 pending. There’s also 18 condo/townhouse active and 16 pending. These are indeed higher numbers than a few months ago and maybe that is encouraging but the question is out there. What’s changed?

In the first few months of this year it seemed like every single property that came on the market got multiple offers and sold way over asking. Didn’t matter what it’s condition was. Now, buyers are not as willing to go for it on properties that seem risky in some way. I’d call that sanity. Consequently, when I look at active Foster City homes I see this…overpriced Eichlers, a house with a very high HOA, a small house in an iffy location with a high price and maybe 4 houses that I think will sell quickly. There aren’t any traditional rancher 3 or 4 bedroom places in Foster City on the market right now. When one comes up it’s going to get a lot of attention. Same sort of dynamic with condos/townhouses. There’s some very nice places out there…but more with an issue or two. This kind of market is really kind of challenging. It’s easy to get encouraged by the new inventory…but it sure seems like the choice houses still get multiple offers