It seems that the first half of the year was hot and the second was not. 2022 started off as gangbusters, but as inflation started to take off, Federal Reserve policies quickly chilled housing and equity markets, which affected the second half of the year.
Home prices on the coast have taken off this year due to several extraordinarily high sales, including a new record sold in the local listing area. The average home price for the year is $1,933,000 (median price $1,625,000), up 16% from 2021 and 26% from 2020. Prices ranged from 425 $000 for a 630 square foot home in Pescadero to $10,750,000 for the “infamous” JL Johnson. 23,800 square foot estate on 21 acres at the top of El Granada. This year, 30% of all sales were over $2 million, while only 7% were under $1 million.
Sales volume really took a hit in the second half and the fourth quarter in particular. Last year, just 219 homes were sold, down 26% from 2021 levels. This is the lowest level of sales since the last housing recession more than 10 years ago. A major factor in this decline can be attributed to the sharp drop in the stock market and the doubling of mortgage rates.
Where you also see noticeable changes is in the composition of our inventory. It’s not that inventory levels have changed much over the past few years, because that’s not the case, it’s the mix of inventory awaiting sale and on hand versus inventory total which has changed significantly this year. At the end of 2020 and 2021, inventory was about evenly split between the two at about 50/50. But at the end of 2022, this ratio was 85% available with only 15% of sales pending. This is a big change and further explains the sharp decline in sales volume.
Homes again sold quickly last year in just 26 days, up one day from 2021. Seventy-three percent of all sales were within 30 days and 53 percent of all sales were sold above the asking price, which is down from last year. Homes have sold for 103% of the asking price this year, compared to 104% in 2021.
San Mateo County saw a minimal increase in average home price from a year earlier, but a similar decline in sales volume as on the coast. The average home price for the county is $2,479,000 (median price $1,910,000), up 2% from 2021 and 15% from 2020. Prices for the county ranged from a minimum of $425,000 for a 630 square foot cottage in Pescadero to $32.2. million for a 12,039 square foot home on 13 acres in Woodside. All towns in the county except Loma Mar with just two sales had an average home price above $1 million, with Atherton being the most expensive at $9.5 million. Forty-nine percent of all sales were over $2 million, while only 5% were under $1 million.
Sales volume for the county of 3,987 homes was down 27% from a year ago, as was the coast. Homes sold quickly in just 20 days, up one day from 2021, and sold for 107% of the asking price (compared to 109% in 2021).
Based on the low number of homes currently awaiting sale, I see the first quarter of 2023 to be very low in terms of home prices and especially sales volume. What could complicate matters further will depend on how quickly Highway 92 is repaired and fully reopened.
Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at 726-6346 or century21sunset.com.
