- Sales fall for fifth straight month
- Inventory jumps
- Prices stay firm
- Lower end adds most inventory
- Higher end has most sales
February was a reversal of the trends we have been seeing in the Redwood City real estate market of late. The lower end of the market was where the majority of the sales had been happening and where inventory was lagging. In February, the biggest gains in inventory were in the lower end (homes priced under $1 million), while pending sales in that segment were cut in half. Sales of homes over $1 million increased. Overall, pending sales fell for the fifth straight month, while inventory increased for the first time in four months. Pricing remained firm, with most indicators rising.
Looking at some of these trends (inventory and sales in particular) in isolation could lead some to believe the market is doing poorly. However, February looked a lot like February 2015 and real estate in Redwood City went on to have a very strong year in 2015. Demand remains strong, evidenced by the fact that many homes are still getting multiple offers and, overall, properties are selling above their list price. Homes that are priced appropriately are having no trouble finding buyers.
February’s median sales price was $1,410,000, a 22% increase over January’s $1,155,000. After dipping below the price from a year earlier in January, the median sales price in February was 7% higher than February 2015’s $1,312,500. The price per square foot increased from $817 in January to $834 in February. That was also $13 higher than a year ago. On average, homes sold for 104% of their list price in February; down slightly form 105% in January but well off the 111% from February 2015. For the past six months the average sales price has been right around 105%, give or take a percentage or two.
Closed sales were lower in February than for any month since January 2009. Only 22 sales closed during February, down from 33 in January. February was not far off the sales of a year ago, however, when 24 sales closed.
Pending sales also fell in February, from 35 in January to 25. Unlike closed sales, February’s pending sales were higher than their level from a year earlier when 22 sales went to contract. Inventory jumped 58%, from 45 at the end of January to 71 at the end of February. One year ago, 74 properties were available for sale. Inventory relative to pending sales also increased. There was a 2.8 month supply at the end of February, up from 1.3 months at the end of January but lower than February 2015’s 3.4 months.
Homes have been staying on the market a bit longer, on average, than we saw most of last year. February’s sales were listed for an average of 28 days, down from 30 days in January. The average for 2015 was 19 days. One year ago, homes were listed for only nine days, but that was an aberration in that it was the only month in at least 14 years when homes were on the market less than 11 days.
Analysis by Price Range
The inventory of homes priced under $1 million nearly doubled, from 14 at the end of January to 26 at the end of February. That was 37% of Redwood City’s total inventory. Pending sales were cut by two thirds, from 18 in January to six in February. Only 24% of the city’s sales were in this segment, the lowest share in at least five years, and probably the lowest ever. The drop in sales and increase in inventory meant that February ended with a 4.3 month supply, compared to 0.8 months at the end of January.
Homes priced form $1 million to $1,749,000 saw the same trends as those priced under $1 million but the changes were not as large. 25 properties were actively listed at the end of February, six more than at the end of January. Pending sales fell by one to 13 in February. 35% of inventory and 52% of pending sales were in this price range. Supply increased from 1.4 months at the end of January to 1.9 months at the end of February.
The $1.75 million-plus segment was the only segment that had an increase in sales from January. Six sales went to contract in February, double January’s three. Percentage wise, this category also had the biggest increase in inventory, 67%. 20 homes were available for sale at the end of February, up from 12 at the end of January. A 3.3 month supply was on the market at the end of February, a decrease from January’s 4.0 months.