Local Real Estate Market Update

Redwood City

Update for the week of October 26, 2015

This Week

The median list price in Redwood

City this week is $1,397,000. The
80 properties have been on the
market for an average of 38 days.
Inventory and days-on-market are
both trending higher recently. However,
the improving Market Action Index
implies some increased demand will
temper the negative trends.

Supply and Demand

The market has been cooling over

time and prices plateaued for a
while. Despite the consistent
decrease in MAI, we're in the Seller's
zone. Watch for changes in MAI. If
the MAI resumes it's climb, prices
will likely follow suit. If the MAI
drops consistently or falls into the
Buyer's zone, watch for downward
pressure on prices.

Characteristics per Quartile

Median
Price

Sq. Ft.

Lot Size

Beds

Baths

Age

Inventory

New

Absorbed

DOM

Top/First

$2,297,500

3,153

0.25 - 0.50
acre

4.0

3.5

27

20

35

Upper/Second

$1,595,000

1,992

4,501
6,5000 sq. ft.

3.5

2.2

54

20

22

Lower/Third

$1,124,500

1,535

4,501
6,500 sq. ft.

3.0

2.0

64

20

22

Bottom/Fourth

$839,500

1,115

4,501
6,500 sq. ft.

3.0

1.0

68

20

74

Quartile

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Median Price

Despite this week's down tic, the price trend remains upward for several weeks. A
persistent drop of the Market Action Index into the Buyer's zone will be a leading
indicator of the price strength subsiding.

$1,400,000$1,300,000$1,200,000$1,100,000$1,000,000$900,000-

Quartile Price

Pricing across most of the market has been relatively strong recently. While Quartile
4 is basically flat, all other segments are in an up trend period. Unless the Market
Action Index has a persistent downward shift, expect that Quartile 4 will assume a
similar trend with the other groups.

$2,250,000$2,000,000$1,750,000$1,500,000$1,250,000$1,000,000$750,000$500,000-

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Price per Square Foot

The market appears to be placing an increasing premium on homes. When list prices and price per
square foot consistently increase in tandem, as they're doing now, you can often find short-term
investment opportunities. Watch the Market Action Index for persistent changes as a leading
indicator for these trends to flatten or drop.
$750$700$650$600$550$500-

Inventory of Properties Listed for Sale

Inventory has been climbing lately. Note that rising inventory alone does not signal a
weakening market. Look to the Market Action Index and Days on Market trends to gauge
whether buyer interest is keeping up with available supply.

$750$700$650$600$550$500-

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Market Action Index

The Redwood City market is currently quite strongly in the Seller's Advantage zone
(greater than 30). The 90-day Market Action Index stands at 58.11; indicating very little
supply relative to the demand.

80706050403020-

Market Action Index per Quartile

Not surprisingly, all segments in the market are showing high levels of demand. Watch
the quartiles for changes before the whole market changes. Often one end of the market
(e.g. the high-end) will weaken before the rest of the market and signal a slowdown for
the whole group.

1009080706050403020-

Residential house prices are a function of supply and demand, and market conditions can be characterized
by analyzing those factors. Watch this index for sustained changes: if the index falls into the Buyers
Advantage zone (below 30) for a long period, prices are likely in for a downward correction.

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Days on Market

The properties have been on the market for an average of 38 days. Half of the listings
have come newly on the market in the past 21 or so days.

Days on Market per Quartile

It is not uncommon for the higher priced homes in an area to take longer to sell than
those in the lower quartiles.

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