We are already in the third week of 2012, and I thought it would be worthwhile to review the current trends in single family residence sales in San Mateo County. I analyzed the sales data for a seven-year period from 2005 through 2011 (raw data source: MLS through San Mateo County Association of Realtors®). The results are as follows:

Average price of the homes sold in San Mateo County peaked in 2007 at $1,214,000, declined about 25% between 2007 and 2009 to $890,000, and seems to be stabilized at around $930,000 in 2011.

Average inventory of single family homes for sale in San Mateo County rose from 926 in 2005 to 1,742 in 2008. Since then it has been fluctuating between 1,500 and 1,700 homes.

Average monthly sales of single family homes fell from 496 in 2005 to 308 in 2008. Since then the average monthly sales has been rising gradually and it stood at 361 in 2011.

Average monthly sales as a percent of inventory of homes dropped steeply from 54% in 2005 to 18% in 2008. Since 2008, this ratio has been stable and stood at 22% in 2011.

Average number of days it took to sell homes rose rapidly from 27 in 2005 to 64 in 2009. It took 63 days to sell a home in 2010, on the average, and 68 days in 2011.

In order to put all the information shown in the charts above into a single chart, I normalized the data to year 2005. The following chart shows how the five parameters noted above changed over the seven-year period in relation to what they were in 2005. It is clear that the single family residence market in San Mateo County declined significantly between 2005 and 2009, but it has been stable for the last two years. There have been slight increases in the average sale price of homes and the average monthly number of homes sold.

My interpretation of all of this information is that the single family residential real estate market in San Mateo County has bottomed between 2008 and 2009. It has been stable during the last two years, with slight improvement in the average price of homes sold and the average number of monthly home sales. It appears that it still is a “Buyer’s Market,” because: a) there were 1.76 times more homes for sale in 2011 than 2005; 2) only 22% of the inventory of homes were sold in an average month in 2011 as compared to 54% in 2005 , and; c) it took 2.5 times longer to sell a home in 2011 than it did in 2005. On the other hand, the number of home sales and the average price of homes sold have been going up at a slow pace during the last two years.

Perhaps it is time to act for those who have been waiting on the sidelines to buy a home when the market “bottoms.” It seems that the market has indeed bottomed about two years ago and it may be due for a rise if the economy shows substantial improvement in 2012. With all the sideliners jumping into the market when they realize that it is time to get in, the market rise may indeed become a steep one!