Market Update: A Look at 2016 Real Estate in Redwood City
2016 brought many things, including the most expensive home to ever sell in Redwood City. Across the board, we saw increases in average sale price and interest rates. So what can you expect if you're buying or selling a home in 2017? To help us answer that, let's take a look at the latest numbers for real estate in Redwood City.
To sum it up:
Average Sale Price
The average sale price in 2016 increased by about 5% over 2015, which is pretty substantial considering the average sale price is above $1.4M, but the increase is not nearly as steep as the increase we saw in the previous four years, ranging from 8-17%. This change of pace may suggest that the market is leveling out. Two supportive variables are the average days on market (DOM) increased by 14%, so properties are taking slightly longer to sell, and the list price to sale price ratio (LP/SP ratio) decreased by about 5%, meaning sale prices are not exceeding list prices as high as they were in 2015.
Speaking of high sale prices, in 2016 a home in Emerald Hills sold for $5,575,000, making in the most expensive home to ever sell in Redwood City per MLS. And then just in the past month, 76 Nevada St sold for $3,250,000, making that the most expensive home ever to sell in Mount Carmel. There is another recent sale (off market), also in Mount Carmel, that will be closing in the coming weeks at a comparatively shocking price. If you're interested in learning more about this property, or others that will be available soon, drop me a line.
Not only did prices increase in 2016, interest rates went up by about three-quarters of a percent. If you combined the increase in homes prices with the increase in mortgage cost, it's easy to see that buying a home right now is a lot more expensive than it was previously. This increase in interest rates alone may also help explain why the increase in our average sale price from 2015 to 2016 was much less than in recent years. None the less, it will not come as a surprise if the average sale price from 2016 to 2017 increases by 5% or less.
Off Market Sales
Other parts of RWC, including nearby San Carlos, are seeing some pretty interesting selling scenarios as well. Not all of them include multiple offers and high prices. There are people outgrowing the house they bought 3-5+ years ago. Even though they have a ton of equity, they need to sell their home first to transition into a new home. In some cases, these folks will entertain the idea of selling their home off market so they can buy their next home. In fact, just a little less than 3% of all homes in RWC sold before they hit the MLS last year. I would think we'll see similar, or even more, sales like this take place this year.
If you're interested in buying or selling a home, I would love to help! You can reach me at (650) 704-8883 or at firstname.lastname@example.org.
Cliff Whearley has been a resident of Redwood City for 23 years and was named Realtor of the Year 2016 at Dwell Realtors, Inc. If you have any real estate questions, he would love to help!