We’re sailing straight into the second quarter of the year and I'm starting to hear more people ask the question, "Is the market starting to shift?" Things do seem to have slowed a little and the competition may be a little less cutthroat. But with people continuing to move into the Bay Area (and Redwood City) and interest rates around 3.5% for a 30 year fixed loan and 2.875% for a 7 year ARM, the demand for buying houses doesn’t seem to be going anywhere anytime soon.
My last couple of transactions have been in the Mt. Carmel neighborhood and I wanted to share with you what I’ve been seeing in terms of the market and interest in the area. I was fortunate to have represented the Buyer of 366 Iris St and the seller of 1301 Harrison Ave.
Not every house sells $200k+ over asking. Prices have gone up so much, so quickly over the past year, and many homeowners have seen a substantial amount of appreciation in their property value. However, it's gotten to a point where there just isn't a large pool of buyers who can afford to buy a home if prices keep soaring. However, I want to point out that it does still happen. And in most cases, that is when the property is priced aggressively to start a bidding war. Take 18 Elwood St for example, which is currently pending sale. At $1M, it's priced $550k below any sale on the 10 block of Mount Carmel since 2015. There were a ridiculous amount of offers on this home. It's scheduled to close escrow next week and I have a hunch the sale price will be a shock to many.
Not every house sells with more than 1 or 2 offers. We've seen some pretty significant gains in real estate prices over the last 3-4 years — as much as 20-25% since 2014 alone. When the market changes so rapidly like this, it's common to enter in to a period where things slow down a bit. Don't get me wrong, as of today we're still seeing homes sell with multiple offers and go over asking, but it's just not what it was a couple of months ago, or last year. Because prices are so high, I'm seeing buyers take a little more time in looking for a home that is going to be a good fit, rather than putting an offer in on everything that comes in the market within their price range.
Timing plays a very critical roll. As with so many things in life, a house's sale price can sometimes be just a matter of timing. A house that shows well and is in the right place at the right time can have a mind blowing sale price. A house that comes on the market right before a holiday weekend, or at a time where there are several other similar properties listed, may not sell for as much as it otherwise would. When people (potential buyers) are out of town or have other equally attractive options, some properties may get left in the dust and sit on the market for a while, ultimately selling for less than they otherwise would.
If you're considering moving to the High School Acres/Mount Carmel area, please feel free to reach out to me anytime and I'll be happy to get you up to speed with the market here and help you find a home here.
Cliff Whearley has been a resident of Redwood City for 23 years. He is a Realtor at Dwell Realtors, Inc. and has been practicing real estate since 2007. If you have any real estate questions, he would love to help!