- Sales fall
- Inventory continues to fall
- Low end inventory historically low
- Prices firm
- Lower priced homes selling well
The Redwood City real estate market is benefiting from the fact that the lower end of the market is much more in demand than the upper end. More than two thirds of the sales that closed in January were for less than $1.5 million. That percentage was less than 50% in December. Buyers are concerned about the inevitable rise in interest rates and are moving now before higher rates cut into their buying power. Unfortunately, inventory remains very low – historically low for homes priced under $1 million. Sellers are in the driver’s seat here but pricing a home properly and presentation are more critical than ever.
The median sales price in January fell 21%, from $1,462,500 in December to $1,155,000. That was the lowest median sales price since October 2014. Before home owners panic, though, the drop in the median price was purely a mix issue. As noted earlier, a greater portion of sales were lower priced homes, driving the median price lower.
Other price indicators showed that prices are, at a minimum, holding firm. On average, homes sold for 105% of their list price in January, up from 104% in December. January’s ratio was below that of a year ago (107%). The price per square foot in January was $817, which was $25 higher than December’s $792 and $124 higher than January 2015’s $737.
33 sales closed in January, five less than in December but seven more than a year ago. January was the fourth consecutive month that sales declined.
Inventory fell for the third straight month and is less than half of what it was in October. 46 properties were actively listed at the end of January, down from 56 at the end of December and 48 at the end of January 2015. 33 sales went to contract in January, down from 41 in December but eight more than a year ago. Inventory relative to pending sales was virtually unchanged from December’s 1.4 months. One year earlier, the supply was 1.9 months.
January’s closed sales were on the market an average of 31 days, just a few days less than December’s 34 days. However, for the twelve months prior to December the average was less than 19 days, so homes are staying on the market longer.
Analysis by Price Range
Only 14 homes priced under $1 million were actively listed at the end of January, down from 21 at the end of December. December’s inventory was tied for the lowest level in at least six years, so January set a new low. 16 sales went to contract in January four more than in December. 49% of pending sales were priced under $1 million in January but only 30% of inventory was in this segment. At the end of January, there was a 0.9 month supply, compared to 1.75 months at the end of December.
46% of Redwood City’s inventory and 40% of the sales that went pending were priced from $1 million to $1,749,999. 21 properties were on the market in this price range at the end of January, down four from December. 13 sales went to contract in January, compared to 20 in December. A 1.6 month supply was available at the end of January, up from 1.25 months at the end of December.
Pending sales of homes price at $1.75 million and up were cut by more than half in January, from nine in December to four in January. The inventory of these homes increased by one unit to end January with 11. That meant supply increased from 1.1 months at the end of December to 2.75 months at the end of January. This segment made up 24% of Redwood City’s inventory and 12% of its pending sales.