Here are the highlights of February's transactions and market comments for Santa Clara and San Mateo counties. Your comments and questions are welcome. If you have an update as to what you are witnessing in your neighborhood, please don't hesitate to share with us. You may leave comments here, or contact me through my website.
> Market Overview -- March 2009 saw the trend change to improve in Santa Clara County. It's been almost a year of improved market conditions and is more apparent in Santa Clara County than San Mateo County. Closings in Santa Clara County were 633 versus 593 in January and above February 2009 figure of 579. San Mateo County also saw higher closings. Higher figures are expected as the seasonal aspects point to higher levels of activity in the late winter/early spring. My analysis of the transactional information reveals:
* The supply of homes available for sale (inventory) has turned upwards after more than a year of continual decline. This is taking place in both counties. Part of this is seasonal as sellers are rushing to get their home listed in the early part of the year after trying to sell unsuccessfully last year (did someone say "overpriced"?). Santa Clara County inventory of available single family residences increased 16% from last month and San Mateo County's inventory increased 20%.
* The sale price to list price ratio continues above 100% and remains at 101.3% in Santa Clara County and increased a bit to 99.5% for San Mateo County. Big news is the percent of closings where sale price exceeds list price -- Santa Clara County was 49.8% and San Mateo County was 36.6%. This indicates the overall market is stronger in Santa Clara County.
* The Days of Unsold Inventory (DUI) continues to show improvement -- as readers will remember that a lowering of this number translates into a faster market. For February, Santa Clara County had a DUI of 39 for single family homes, 37 for condos/townhouses and 80 for multi-unit properties. San Mateo County had a DUI reading of 42 for single family homes, 45 for condos/townhouses and 121 for multi-unit properties.
> Super-heated Seller's Markets? -- We will always have some market areas performing better than others. For Santa Clara County the hottest (seller) market areas are South San Jose, Blossom Valley, North Valley, East Valley, Evergreen (lower priced homes only!) and Cambrian. For San Mateo County, Foster City remains the hottest market followed by the Bay-side communities of Belmont, San Carlos, Redwood City and San Mateo, followed by the expensive areas of Woodside, Portola Valley, Hillsborough and Atherton. The characteristics of a seller's market are shorter time on the market, fewer number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and a tendency towards price appreciation.
> Buyer's Markets? -- Yes, there's a couple of them, too. For Santa Clara County, we see buyer's markets in Los Gatos Mountains, Saratoga, Los Gatos/Monte Sereno and Almaden Valley. Saratoga exhibits the highest Days of Unsold Inventory in the county at 144 due mostly to low demand and is my current "Best Buy" area in the county, followed by Los Gatos/Monte Sereno. In San Mateo County, besides the more expensive areas, there are buyer's markets in the coastal communities. To refresh you, characteristics of a buyer's market are longer time on the market, higher number of homes available for sale, lower probability of multiple offers and a tendency for price depreciation.
Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI). Additionally, this is not based on price levels or my opinion but a supply-demand relationship.
> Median prices -- Santa Clara County median price for single family homes now stands at $550,000 versus $450,000 or 22.2% increase from February 2009. The median price for condos/townhouses was $352,000 or 10.0% higher than the same month a year ago. San Mateo County's median reached $600,000, 4.4% higher than the same month a year ago. Notice that with prices I don't use month to month changes but year over year. This eliminates seasonal fluctuations and is something that newspapers and most online pricing sources haven't figured out yet! Or, perhaps they use this intentionally to scare folks! I advice my clients to NOT use an entire county's median price level to decide on whether to buy or sell but use the trend information in a general manner. To formulate an effective strategy, I use analysis of the supply-demand characteristics of the neighborhood under consideration and advise my clients to use an appropriate strategy to maximize their dollars if they are selling and maximize their house if they are buying.
Need help with understanding the market in your area? Contact me at Tom.McEvoy@remax.net for a no-obligation consultation and research to help you.
Thanks for reading my blog. I'm Tom McEvoy, Realtor -- Let me know your comments, questions, observations you may have or any future topics you'd like me to address.
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