The Redwood City has taken off, trailing just on the heels of its neighbors in the Peninsula. The city where buyers used to come for “bargains” has emerged from its cocoon as a beautiful and difficult to catch housing market. Buyers from neighboring cities apparently didn’t get the memo that the downtown in Redwood City is flourishing, and the entire city seems to be buzzing with a younger, more tech-savvy group who focus on its current attributes and future potential. As a direct result, buyer demand is driving this housing market to mimic historical trends of neighboring cities.
The second quarter of 2013 has exploded, leaving the similar time period from last year in the dust. Inventory is still down. The homes that do appear on the MLS disappear as sold listings just as quickly. Significant gains in median price, substantial overbidding, and extremely rapid sales are driving Redwood City as one of the newest highly-competitive markets in the Peninsula.
Redwood City, as a Whole
Throughout the city, we have seen the median home price jump 19% from Q2 2012, rising from $777,500 to $926,000. The average days on market for these sales has dropped more than 50% from an average of 41 days on the market to only 20 days. Significant overbidding has returned to the county seat, with sales prices averaging 6.3% over the list price, compared with only 1.5% overbidding in Q2 2012.
Old Redwood City*
Drilling down to a neighborhood view, Old Redwood City was even more competitive. Q2 comparison of median home price between 2012 and 2013 showed an increase of 15%, with median sales price rising from $1,100,000 in 2012 to $1,265,000 in 2013. Buyers were even more eager to get into this neighborhood, and the average days on the market plummeted by 50% from 60 days to 30 days. Buyer competition for the second quarter is still fierce in Old Redwood City, with significant overbidding on homes at 8.0% over the list price, compared to 1.6% over list in 2012.
The City to Watch
Keep an eye on Redwood City as the downtown develops further, more buyers are priced out of other cities, and the city’s schools catch up with the demand for top performing schools. We have seen the beginning of this trend, but can expect that future home prices will more closely rival those of the surrounding cities.
*Old Redwood City is defined by the area between James St. & Edgewood Rd., and Alameda de las Pulgas & El Camino Real.