Market Update

Bay Area Real Estate Market Newsletter

San Mateo County

June 2001

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Current Market Data - After having Days of Inventory (DOI) increase significantly earlier this year, DOI remained basically unchanged during May. From 50.2 DOI in Feb. to 92.8 DOI in April and now at 89.3 DOI. DOI increases the higher the price range. Currently DOI is 46 for homes under $500K; 104 for the $500K to $1.M range and 193 for homes over $1M. Home sales in the $5+ Million price range are dead, with 34 homes on the market and only 4 homes in escrow yields a DOI of approximately 1 year for this price range.

Although SMC inventory grow rapidly from 279 on 1/1/2001 to 1342 on 5/5/2001, inventory has remained relatively unchanged at 1404 on 6/5/2001. Inventory for SMC is NOT approaching the record level of 2800 in mid-1995.

The number of sales per day climbed although relatively slowly as we move from the holiday season to the peak selling season. Currently SMC is selling about 85% of the sales compared with the past years.

Days on the market (DOM) for listings currently available (status 1) is 43/55 days. This is greater than the DOM for homes that are currently in escrow 28/41 days. This is also greater than DOM for closed transactions at 21/32 days. This shows a market that continues to slow and fairly rapidly. For all DOM data the first figure is the median and the second number the average. Although average DOM is more widely used than the median DOM, the median is more representative of trends just like median price opposed to average (mean) price. In this case the median represents the marketing time for 50% of the properties. This is based on continuous days on the market and not the list date.

Sales Data - The list price has been basically flat the last year. Although the list price of homes that entered escrow is the same as 1 year ago because of the lack of over-bidding that was so common last year the median sales price for homes that entered escrow (when it becomes known) will likely be lower than last year by about $50K or nearly 10%. Because of market dynamics the median price drops less than actual property values. During the 1989 slow down median prices dropped about 10% yet property values dropped 25 to 30%.

Look at the increase in days on market (DOM) for the past 3 months, March at 15/27 to April at 21/33 and to May at 28/41. That is a 7 day increase each month. In a stable market DOI will equal average DOM. Because DOI is a leading indicator and DOM is a lagging indicator expect DOM figures to increase until DOM=DOI which means it will take longer time to sell property, in the near term.

The number of sales during the month of May increased by 15%, 442 homes in April to 501 in May, which is clearly some good news.

Closed Data - Median sales price dropped an additional 1% from last month which was on top of the 8.3% or $54 drop compared with April 2000 or Jan 2001 which were both basically $650K. Looking at the 1989 slowdown the median price dropped just 10%, yet property values fell 25 to 30%. The reason is buyers willing to purchase in a buyer's market spend what they can qualify for, but these buyers get a lot more house for their available resources. This keeps the median price relatively stable compared with the property values which actually lose more value. There is no reason to think this time will be any different.

The trend of fewer homes selling over their asking price and more homes selling below the asking price continues. It is noteworthy that even in this buyer's market a significant number (nearly 1/3) of the properties are still selling over the asking price. This is based on list price at time that the sale is made and does not reflect earlier price reductions the seller has made. Although it would be nice to calculate this ratio based on the sellers original list price, the MLS (REIL) allows listing agents to wipe out the original list price anytime they pay a $25 re-list fee.

The DOM for homes that closed in May is only 21/32 and quicker than those that entered escrow at 28/41 and still quicker than the homes still on the market of 43/55 days. These figures show how rapidly the market is slowing. This trend should continue until the average DOM 41 equals the DOI 89. Because DOI is the leading indicator and DOM is a lagging indicator the market will continue to slow.

At 445 closings in April volume is about 85% of last year's level of closings.

Condo/townhouse market - is also slowing and values are declining. These prices are approaching the previous year's level but are still currently slightly higher.

1b) San mateo County

This information is gathered and compiled by RichardCalhoun@CreeksideRealty.com Request your own copy by using the e-mail address above.

WARNING: The Bay Area real estate market is cyclic. The Bay Area will like continue to see additional up and down cycles. Only a small percentage of the total properties sell in a given month. Consequently, small changes in the economic conditions can make a significant change in the supply and demand balance for the real estate market. Past performance cannot determine future performance.

**HOUSES**

CURRENTMARKET	Jan-01	Feb-01	Mar-01	Apr-01	May-01	May-00	May-99
Days of Inven	54.3 days	50.2days	81.8 days	92.8 days	89.4 days
current inven	560homes	694homes	1064home	1342home	1404homes
# sales/day	10.3 sale	13.8 sale	13.0 sale	14.5 sale	15.7 sale
DOM w/o sale me				33/37 day	43/55 day
month pendings¹
SALE price med	$650,000⁵	R$599,000⁵	$620,000⁴	R$584,000⁴	n/a	$603,000	$500,000
LIST price med	$629,000	I$580,725	$599,516	I$589,000	$599,000	$569,475	$489,000
SP/LP average	102.30%⁵	C102.4%⁵	101.60%⁴	C99.0%⁴	n/a	105.80%	101.90%
%pending sp>lp	51.90%⁵	H58.1%⁵	52.60%⁴	H33.4%⁴	n/a	71.40%	53.73%
%pending sp<lp	31.50%⁵	A28.4%⁵	33.60%⁴	A54.9% ⁴	n/a	17.40%	28.98%
Days on Market	15/37 day	R14/30day	15/27day	R21/33day	28/41 day	14/21 day	12/28 day
number pending	318homes	D388homes	401homes	D442homes	501homes	582homes	617homes
monthly CLOSES²		C		C
SOLD price med	$651,000	A$683,750	$625,000	A$596,000	$589,000	$653,000	$499,475
LIST price med	$650,000	L$650,000	$600,000	L$599,000	$598,500	$596,000	$479,000
SP/LP average	101.90%	H102.7%	102.60%	H100.6%	99.20%	109.10%	101.46%
%closes sp>lp	47.10%	O57.1%	56.50%	O47.6%	34.70%	78.20%	48.34%
%closes sp<lp	37.90%	U30.9%	27.50%	U38.7%	52.70%	13.50%	32.47%
Days on Market	23/37day	N14/33day	14/2day	N17/33day	21/32 day	13/22 day	14/34 day
number closes	269homes	@254homes	367homes	@313homes	445homes	511homes	526homes

**CONDOS/Townhouse**

CURRENTMARKET	Jan-01	Feb-01	Mar-01	Apr-01	May-01	May-00	May-99
Days of Inven	41.0 days	C 39.6 days	79.9 days	C 111.1 day	127.3 day
current inven	150 units	R 199 units	338 units	R 454 units	509 units
# sales/day	3.7 sales	E 5.0 sales	4.2 sales	E 4.1 sales	4.0 sales
DOM w/o sale me		E		E 30/38 day	43/49 day
month pendings¹		K		K
SALE price med	$420,000⁵	S$392,000⁵	$425,000⁴	S$375,000⁴	n/a	$355,000	$264,750
LIST price med	$385,000	I $388,800	$409,000	I $369,000	$402,475	$329,000	$255,000
SP/LP average	101.70%⁵	D 101.6%⁵	101.20%⁴	D 99.3%⁴	n/a	104.70%	100.20%
%pending sp>lp	53.20%⁵	E 54.3%⁵	42.50%⁴	E 30.7%⁴	n/a	72.20%	37.40%
%pending sp<lp	31.50%⁵	R 26.8%⁵	30.90%⁴	R 56.8%⁴	n/a	14.80%	33.80%
Days on Market	13/29 day	E 14/22 day	14/22 day	E 21/31 day	31/37 day	12/17 day	13/27 day
number pending	118 units	A 139 units	132 units	A 126 units	136 units	193 units	201 units
monthly CLOSES²		L		L
SOLD price med	$398,750	T $420,500	$409,500	T $390,000	$375,000	$368,000	$285,000
LIST price med	$380,000	Y $410,000	$400,000	Y $379,000	$369,950	$329,000	$278,000
SP/LP average	102.00%	. 102.0%	101.40%	. 101.0%	99.20%	106.50%	100.45%
%closes sp>lp	53.10%	C 57.1%	48.30%	C 50.5%	22.60%	72.50%	35.63%
%closes sp<lp	24.00%	O 29.8%	27.50%	O 33.0%	52.20%	12.50%	35.06%
Days on Market	14/23day	M 13/26day	13/20day	M 15/24day	21/30day	11/13day	12/26 day
number closes	94 units	82 units	144 units	103 units	115 units	158 units	167 units

1) Sales data related to sale price is re-complied early during current month to incorporate recent closings w/o delaying this report..

2) Closed data complied at 2:30 AM on the 5th day of following month to agree with MLS policy.

3) DOI & Sales per day calculations uses recent sales activity.

4) These figures are still subject to significant change as these sales close and the sale prices are reported

5) These figures are still subject to minor adjustments as these sales close and the sales prices are reported.

The information contained herein cannot be used without give RichardCalhoun@CreeksideRealty.com credit.

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