Friday, February 17, 2012

February Silicon Valley Real Estate Market Comments

Here are my observations of the most recent January transactions for Santa Clara County real estate and San Mateo County real estate. Your comments and questions are always welcome. If you see something in your neighborhood that you are curious about or have a question, please don't hesitate to share with us. If you have questions or a comment, please leave them here, or feel free to contact me through my website.

> General Market Observations and Comments -- The amount of homes (single family and condos and townhouses) available for sale, after a short spurt, continue to languish at low levels. The most interesting thing about this trend toward fewer homes on the market is twofold: one, this occurs every year but this time the level is at its lowest since 2005; and two, the portion of lender-controlled homes (short sale and bank-owned) has diminished but with lower inventory of regular transaction homes, the portion of lender-controlled listings are larger.

Mortgage rates continue to hover in the high 3% to low 4% range. Since most buyers need a loan to purchase a home, mortgage rates are a major consideration in the decision and ability of the buyers to purchase. I continue to advise those buyers who purchased even last year to refinance their "low" 4 3/4% loans and lock in a high-3% loan rate for the long haul.

For January, Santa Clara County's median price for single family residences, half above and half below or the middle transaction, stood at $489,900, down 6.6% from January 2011. San Mateo County's median price stood at $575,000, no change from the same month a year ago. In addition to the seasonal aspect where prices typically decline in off-peak season selling periods, the mix of homes available are made up of a higher portion of lender-controlled transactions (short sales and bank-owned). Furthermore, the smallest homes sell during these off-peak periods which also impact prices.

For condos/townhouses, Santa Clara County's median price was $271,444 in January versus $265,000 the same month a year ago, representing a 2.4% increase. For San Mateo County, the median stood at $317,500, down from $371,250 in January 2011.

Sales (my definition is closed transactions), increased in each county. For Santa Clara County, closings increased 23% for single family residences and 40% for condos/townhouses as compared to the same month a year ago. In San Mateo County, closings were 27% higher and condos/townhouses were 17% higher than the levels in January 2011.

Don't hold your breath! The state attorneys general mortgage deal with the five banks totaling $25 billion is great for those borrowers. Right? Well, after the government gets their squeeze of $2 billion (for what you ask), the remaining $23 billion will take an estimated one to three years to find its way to borrowers. Why so long? The government has to write the rules first. By the way, the latest figure I've seen regarding the amount of mortgages associated with homes where the values are "under water" was between $700-800 billion! I call that a drop in the bucket.

Thanks for reading my blog. I'm Tom McEvoy, Realtor with RE/MAX Santa Clara Valley -- Let me know your comments, questions, observations you may have or any future topics you'd like me to address.

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