Monday, November 16, 2015
Wednesday, March 12, 2014
For February in Santa Clara County for single family residences, there were a very low number of closings which would have set a new low except for February 2008 (before the financial crisis!). Closings in one month are more times than not, sales the previous month so these were in large measure indicative of January's slower activity. As we look at inventory, the amount or supply of single family residences available to purchase in Santa Clara County stood at 776, the second lowest February other than the 721 reached in 2000!
All the while, the Silicon Valley real estate market continues to be rather slow but gaining speed as it usually does this time of the year. Last month, I noted that we saw continued buyer demand to prop up prices and I advised buyers to buy quicker rather than later for this purpose. For February, that translated into a record median price of $801,000, an increase of 12.3% from the same month a year ago. Where else can you reap an average 1% a month return on your investment? I believe this demand will continue and probably increase as we get into the strongest portion of the selling year (after Super Bowl Sunday to just before Memorial Day weekend).
I see higher prices ahead with somewhat stable mortgage interest rates. Last month there were 65.6% of the sales with sales prices greater than list prices, second highest since February 2005 (an extremely hot real estate market). Additionally, the average sale price to list price ratio stood at 104.3%, higher than the 103.9% for the same month a year ago and means that the average sale took place at better than 4% higher than list price. This continues to indicate to me that there is ample buyer demand to further push up prices in the near future as activity usually increases as we go deeper into spring. Also, when we see a sale price higher than list price it infers that there were multiple offers — otherwise why would a buyer offer more!
Silicon Valley real estate trends continue to be positive and we should see higher prices in the future. Mortgage rates have trended higher but have fallen slightly and are currently in the low to mid-4% range. The gains in the stock market help supply of the down payments for some buyers to afford the prices and most buyers using loans decide upon a fixed rate mortgage with 20% or more down payments. Along with this, almost one-third of the closings were cash transactions.
For questions, comments on the Silicon Valley real estate market or update in your neighborhood or your target area you are considering, please contact me and I’ll personally respond to assist you with the current market dynamics. Thanks for reading!
Friday, February 14, 2014
Friday, January 24, 2014
Saturday, February 8, 10:00am-4:00pm - Basketball Jamboree, Betty Ann Ong Recreational Center - San Francisco (www.chineseparade.com/parade_events.asp?pEvent=basketball_jam)
Saturday, January 18, 2014
Friday, May 24, 2013
Similarly, the median price in April for condos and townhouses in Santa Clara County was $510,000, compared to $349,000 the same month a year ago which was a phenomenal 46% change.
For San Mateo County, the San Mateo real estate trends showed the April median price at $956,000, compared to $760,000, last year or a 25.8% increase.
As you know, a median price figure is the middle transaction so this statistical calculation won't necessarily translate into an across the board increase for each and every home. What it does indicate is a strong market pressure and an upward trend for the Silicon Valley real estate market.
The frequency of the sale prices exceeding list prices is 73% in Santa Clara County and 68% in San Mateo County. An indicator of the magnitude shows that the sale price to list price ratio averages 106.1% and 105.8% in Santa Clara County and San Mateo County, respectively.
An indicator I track closely in addition to the above ones, is the median days on market. This represents how long it takes for one-half of the listings to sell. In Santa Clara County, it is 10 days but just 9 in the Cupertino and Sunnyvale market area (hottest area in the county with a median sale price of $1,223,000) to 17 in the South County area which comprises Morgan Hill to Gilroy with a median sale price of $629,000. For the current San Mateo real estate trends, it is but 11 days.
If a listing lingers on the market significantly longer than the median, well then it is a candidate for an analysis to determine the possible cause(s) including price, condition, marketing, etc.
As the old Meat Loaf song went, "two out of three ain't bad". The last three buyers I helped recently, two strategies out of the three were successful. In the first one, with multiple offers, my advice to my buyers was to offer in a range above list price and doing so beat out the second-place offer by just $1,000 with eight offers and a sale price over $800,000. In the second transaction, the strategy devised by and used by my buyers failed. They calculated a dollars per square foot against comparable homes. For residential, this approach only works when you get lucky as in winning the lotto but I use this in addition to other aspects in my commercial transactions. Their offer came in tenth out of ten and they missed purchasing a beautiful home by over $100,000. For the third one, my buyer listened and followed my advice to offer in a range above list price and even though he didn't have the highest priced offer, the seller did accept his offer and closed recently. For this one, there was more to my strategy than just price so on that basis, he won. In the two successes, I not only gave advice on the minimum but on the maximum to pay for the home. By the way, my long-term average performance is a success rate of 60% so these last three upped my average slightly!
In the last few weeks, I've noticed a change in the market in the favor of the buyers! Many homes have generated multiple offers but not to the extent that we saw in the early part of the year. This is in keeping with the historical tendency as we near Memorial Day weekend that buyers decide they have other things to do -- e.g., graduations, weddings, anniversaries, planning for vacation when school gets out, etc. Also noted is that the inventory levels or those homes available to purchase have risen lately, affording more choices for buyers. For single family residences, the highest inventory in seven months and for condos and townhouses, the highest level in eleven months!
Notwithstanding my prior comments about the market conditions during April, buyers that have pulled back from actively looking for a home for whatever reason, now stand a much better chance of being able to buy with less competition than in the recent past. Mortgage rates still remain favorable but have nudged up a bit but still in artificially low levels as the Feds continue to purchase a mixture of U.S. Treasury and mortgage-backed securities to the tune of about $85 billion per month! Their most recent comments contain a lot of double-speak thus raising the risk of a change in their programs -- e.g., less buying and the risk of higher mortgage rates. In following the money, a lot of the funds created in the banking system have gone into asset categories like stocks and real estate (Google recently hit $900 and LinkedIn $200). This is the "new" way the government prints money.
Please leave a comment or question if there is something you'd like to hear more about or would like information about the market in your neighborhood or contact me through my website or send me an email. Thank you for reading!
Friday, April 12, 2013
The median days on the market or what it takes to sell one-half of those on the market, sell in just 11 days in Santa Clara County and 12 days in San Mateo County -- indicating a hot seller's market. For March, 792 homes closed escrow last month in Santa Clara County, up from 621 in February and 333 did so in San Mateo County versus 247 last month. Comparing March of 2013 with previous Marches, this month was the third slowest in terms of closings.
Both counties continue to have the characteristics of a seller's market generally. During March, more than half of the closings had a sales price greater than a list price (68% in Santa Clara County and 62% in San Mateo County with both percentages increasing from February). For owners thinking of selling, it is important to understand the market dynamics in their particular market area. For many, this remains an excellent time to sell.
Median Prices are Jumping -- The trends of median prices of single family, condo and townhouse homes continue upwards. For single family residences, March saw Santa Clara County's median price, half above and half below or the middle transaction, at $731,000 and the median sales price for San Mateo County increased to $950,000. The upwards trend has been evident since the Spring of 2009. By the way, market bottoms were also established during this time in both stock indices and commodities.
Recent Overbidding Levels Remain High -- The percentage where sale price is greater than list price gives us an indication of the incidence of multiple offers. Already mentioned is the frequency of overbidding (sale price greater than list price 68% of the time in Santa Clara County and 62% in San Mateo County) but a more telling aspect is the magnitude or sales price to list price ratio (SP/LP). In Santa Clara County, the average SP/LP ratio is 105.2 or in the average transaction the seller gets 5.2% above the list price. Hottest area is Los Altos and Palo Alto with 109.7. The Cupertino and Sunnyvale market area was just behind with a ratio of 108.9. In San Mateo County the numbers look similar. Overall, the county average is 104.8 and the highest is Bay Cities market area of Belmont, Burlingame, Millbrae, San Carlos, San Mateo with 107.4.
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Thanks for reading! I'm Tom McEvoy, Realtor with RE/MAX Santa Clara Valley -- On Google+ at +Tom McEvoy. Let me know if you have any comments, questions, observations or any future topics you'd like me to address.