Is The Market Slowing Down?

This morning, I opened up my edition of the San Francisco Chronicle and there above the fold on the front page is this headline: Would-Be Home Buyers Hesitate.  If you go to SFGate, the headline is Leisurely Lookers.  If you look at the chart that sits at the top of my blog and then click the Altos Research Chart, you will see that in each town we are tracking, days on the market have increased substantially from last year. This change took place earlier this year.  I'm using Burlingame as my example here, but the charts for our other towns, Millbrae, San Mateo, Foster City Belmont and San Carlos are all quite similar.

Let's talk about average price.  Wouldn't you think that if the average number of days a property languishes on the market lengthens, that prices would fall?  That makes sense but not cents. With the exception of San Mateo, where there is a huge spread in housing pricing due to the size of the city, prices have generally risen in 2007.  As you can see below, San Carlos, Foster City and Hillsborough have jumped the most over the past 18 months.  
              
                
Why is this happening, you ask?  It's basic economics: supply and demand.  Remember, I have written about this before here,here and here. With the exception of San Mateo, which is the largest city in our little world, there aren't enough houses for the number of people who want to live here.  We are blessed with great schools by California standards, great weather, a vibrant economy and many universities, colleges and research facilities nearby.  The heart of the Biotech industry is in our county.  Silicon Valley morphs into the southern portion of our county but many world-wide technology companies call San Mateo County home, too.

Yes, people are taking their time in buying but we are still seeing many, many multiple offers and a boat load of people out there looking to buy.  Will these people find deals?  Maybe yes and maybe no.  It will depend on where they are looking to buy, and how many others are making offers on what they perceive to be a great deal.  Too many people writing offers on good deals makes them rise in price and the good deal moves up to market pricing. Poof, no more good deal!

Pricing a listing?  Well that's another topic for another day.