Average Size Of Houses Sold Spikes Up

Our August 18, 2023 monthly real estate trends show an interesting trend. The average size of house sold in San Mateo spiked upward in eight San Mateo County cities and in Palo Alto, which is at the border of San Mateo County. The spike-up is strong enough and affects enough cities that the San Mateo County real estate trend also shows it.

Santa Clara County shows a completely normal trend for house sizes

Santa Clara County Average House Size Sold

In addition to Palo Alto, the nine cities showing a spike up in average house size are: Foster City, Los Altos Hills, Menlo Park, Millbrae, Pacifica, Portola Valley, San Carlos, San Mateo, and Woodside.

If there was a change in the ratio of people moving in vs. moving out, we would expect a change in the price per sq. ft. to be seen. The price per sq. ft. for houses sold in San Mateo County is indeed showing an increase from the previous trend.

San Mateo County House Price Per Sq.Ft.

However, if you look at the house price per sq.ft. for each of the ten cities, only Pacifica shows a strong upward spike. The other cities appear to follow the previous relatively flat trend for price per sq. ft. of the last three quarters. Pacifica had a sale incorrectly reported. A house was listed for sale at $1,295,000 and was reported sold at $11,538,000. (We contacted the listing agent.)

The monthly number of houses sold in San Mateo County in June was low but within the range of previous monthly sales. August sales are of course very low because almost no August sales have closed escrow.

San Mateo County monthly number of house sales

Large houses tend to sell at lower prices per sq. ft. than smaller houses. The increase in house price per sq. ft. for San Mateo County is potentially lower than it would be if only larger homes were looked at. The numbers seem to imply that the demand for large houses in San Mateo County is increasing relative to smaller houses, but is partially offset by more owners of large houses willing to sell.

We can only speculate about the motivations of average buyers and average sellers. Owners of larger homes may have decided they want to downsize and move out of the area if they can get what they consider to be a good price. The affordability limits how much potential buyers will pay, but there seems to be a reservoir of buyers ready to buy if the price is right. If we look at the 3rd quarter sales price vs. list price for houses, we see an almost balanced situation with roughly 58% of houses selling over list at an average of less than 102% of list price.

San Mateo County House Sales Price vs. List Price

Again we can only speculate about motivations, but with San Mateo County cities being closer to San Francisco, the trend of negative news about San Francisco may be affecting San Mateo County residents more than Santa Clara County residents. Homeowners who are less motivated to stay put because of children or jobs could be more likely to seek a future elsewhere.

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