Is the market finally starting to settle down a bit? Well, to put it simply, the third quarter was a mixed bag for the real estate market. As you may know, the first and second quarter (and even into the third) of this year were absolutely crazy in terms of appreciation, properties selling hundreds of thousands over asking, and fierce competitiveness amongst buyers.
But in the third quarter, we did see things cool off a little. Buyers who were waiting for the market to settle down a little started to jump in the search for a home, while sellers may have been disappointed if their home didn’t sell way over asking.
This quarter, we saw some instances where properties only received one or two offers (rather than the almost customary five to seven offers), or sold below or right at asking price. On the other hand, we saw homes like 176 F Street in Lenolt that was listed at $1,049,000 and sold for $1,250,000 after 18 days on the market. It was 8.7% over the highest sale ever in the ABC streets.
Other factors contributed to the inconsistency we saw this quarter. In comparison to the steep price increases in the previous months, it’s almost a relief to see things not continue to skyrocket. July and August are typically the slowest months for the local real estate market, mainly because a lot of people take time off during the summer to go on vacation. In addition, the stock markets in China and the U.S. were shaky, which trickles down to the real estate market as well. As stock prices go down, so does an investor’s net worth, which limits real estate purchases.
Over the last 12 months, Redwood City has seen at least a 20% increase in real estate prices, much of which took place in the first and second quarter of 2015. After big leaps in prices since 2013, at some point a pause, or a slowdown, is expected.