March Silicon Valley Real Estate Market Update

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!

Silicon Valley Real Estate Market Update

For January, as compared to previous Januarys, we had very low closings and would have set a new low level except for January 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 December's slower activity. As we look at inventory, the amount of single family residences available to purchase in Santa Clara County, this did in fact set a record low for a January at just 715. All the while, the Silicon Valley real estate market continues in its slower pace as it usually does this time of the year, we see evidence of buyer demand sufficient enough to firm and otherwise increase prices. Keeping in mind that smaller homes sell during the holiday season (less family-related activity), as 54% of the closings have a sale price greater than list price with an additional 12% of sellers obtaining full list price. In San Mateo County, the number is 61% of the single family residence closings that had a sale price greater than list price. These indicate that there is ample buyer demand to push up prices in the near future as activity increases into the early-Spring season. As mentioned in the past, a sale price that is greater than list price infers that there were multiple offers -- otherwise why would a buyer offer more! Historically, the Silicon Valley real estate market shifts more toward a seller's market after Super Bowl Sunday -- the last "holiday" of the season. This certainly appears to have taken place. Matter of fact with the above ratios, it may not have ever ebbed too much from last year's high level of activity! Prices, as measured by the median price or the middle transaction, have been choppy to flat with a few exceptions. Santa Clara County median price for a single family residence stood at $739,000 in January, a slight decrease from the month before but more importantly up 11.8% from the same month a year ago. This is a scant $1,000 lower than the January record median price reached in January 2007! Remember to compare year over year as it eliminates the seasonality factor we experience each year and the annual shift to smaller homes that sell during the holidays with their resultant lower prices. Newspaper and internet accounts of price movements tell you that you should look at the month-to-month variations which is patently false (perhaps they sell more papers with the scary headlines!) and don't bring up the fact that smaller homes sell during this time of year. In San Mateo County, the median sales price reached $1,010,000, also up nicely from the same month a year ago. Silicon Valley real estate trends continue to be positive and we should see higher prices in the future. Mortgage rates have trended higher and are now in the low to mid-4% range, employment in the valley is higher for well-paying jobs in high-tech, biotech, etc which increases the demand for housing especially when the major employers encourage employees to live closer to the campus otherwise they pick you up in a wi-fi bus so you start working as soon as you get on board! The stock market gains also are a contributing factor as gains help with higher down payments and even cash transactions. Last year cash transactions accounted for about one third of all transactions! Hot market areas in Santa Clara County are the Los Altos-Palo Alto area as well as the Cupertino-Sunnyvale area. Each one has a median days on market of just 9! This means that half of all the closings were sold in an incredible 9 days. The coolest market area in Santa Clara County was the East, Central and South San Jose area with a reading of 30. For San Mateo County, the hottest market area is the Bay Cities area comprising Belmont, Burlingame, Milbrae, San Carlos and San Mateo followed closely by Redwood City and Foster City with median days on market of 12. The coolest market area remains the San Mateo Coast of Half Moon Bay, El Granada, Moss Beach and Montara with a reading of 66. I track the different market areas to understand the latest dynamics in the market because county-wide averages don't help sellers or buyers. This also helps me to advise clients on the most appropriate strategy to employ to sell at the highest possible price the market will bear or for a buyer to obtain the most house for their money while still being able to purchase a home without overpaying. That said, of the last nine buyers I have helped in multiple-offer situations, my buyers have prevailed in seven of them! 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!

Lunar New Year - 2014

Happy New Year! OK, Happy Lunar New Year! In the Chinese calendar, the longest chronological record in history dating back to 2700 B.C., this year marks the lunar year 4712 -- Year of the Horse. The first day of the lunar year is January 31, 2014. For the Tet Vietnamese New Year it will be the same, Year of the Horse! 

Famous people born in the Year of the Horse include: Katie Holmes, Josh Hartnett, Mena Suvari, Ashton Kutcher, Jerry Seinfeld, Harrison Ford, Oprah Winfrey, John Travolta, Cindy Crawford, Jackie Chan, Denzel Washington, Barbara Streisand, Paul McCartney, Rembrandt, Leonard Bernstein. 

Here are selected local events celebrating the Lunar New Year in Santa Clara and San Francisco counties.

Silicon Valley/San Jose/Santa Clara County:

Saturday, February 8, 12:00-4:00pm - Children's Discovery Museum special programming, 180 Woz Way, San Jose http://www.cdm.org/new#lunar 

Sunday, February 9, 12:00-4:00pm - Children's Discovery Museum special programming, 180 Woz Way, San Jose http://www.cdm.org/new#lunar

Saturday, February 22, 1:00-4:00pm - Chinese New Year Celebration, Santana Row Park, San Jose http://www.santanarow.com/events/chinese-new-year-celebration

San Francisco/San Francisco's Chinatown:

Saturday, January 25, 10:30am, mini procession/ribbon cutting, Chinatown/Grant Avenue

Saturday, January 25, 10:00am-8:00pm, Flower Market Fair, Chinatown/Grant Avenue

Sunday, January 26, 9:00am-6:00pm, Flower Market Fair, Chinatown/Grant Avenue

Friday, January 31, Chinese New Year, Vietnamese Tet
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, February 8, 7:30pm - Miss Chinatown USA Pagent, Palace of Fine Arts, San Francisco (www.chineseparade.com/pageant.asp)

Sunday, February 9, 8:00am start, registration begins at 7:00am, 36th Annual Chinese Chamber of Commerce & Chinatown YMCA 10K/5K Run/Walk, Chinatown/Sacramento and Grant www.ymcasf.org/Chinatown

This event comprises a 10K or 5K run or walk and raises funds for the YMCA's youth and teen programs. The event expects 2,000 participants and 300 volunteers. For more information or to register, please go to (www.ymcasf.org/Chinatown) or call 415.576.9622

Friday, February 14, 6:00pm-Midnight, Miss Chinatown USA Coronation Ball, San Francisco Hilton and Towers. Tickets: 415-982-3000

Saturday, February 15, 5:15-8:00pm, Southwest Airlines Chinese New Year Parade http://www.chineseparade.com/calendar.asp

San Francisco's Chinese New Year Parade began in 1860 and was named by the IFEA to be one of the top ten parades in the world! It is also one of the few remaining night illuminated parades in the country. Since 1958 the parade has been organized and directed by the Chinese Chamber of Commerce.

Chinese New Year Festival and Parade, Market and Second Streets to Kearney and Jackson. Check out "Gum Lung", the 201-foot-long Golden Dragon! (www.chineseparade.com/)  Can't be there?  Watch or DVR it on KTVU Fox Channel 2 or KTSF Channel 26 (Chinese broadcast) on Saturday, February 15, from 6:00-8:00pm.

Saturday, February 15, 10:00am-4:30pm - Chinatown Community Street Faire, Chinatown - San Francisco (www.chineseparade.com/parade_events.asp?pEvent=community_fair)  

More Than A Hundred Years of the Chinese (Lunar) Calendar (1912 to 2031) --

The Chinese Calendar names each year after an animal and legend has it that a person born under a certain animal will display traits of that animal. I was born in the Year of the Tiger. What sign are you in the Chinese 12-year calendar cycle? Look up in the table below what year you were born and the corresponding animal.

Rat: 1912 1924 1936 1948 1960 1972 1984 1996 2008 2020

Ox: 1913 1925 1937 1949 1961 1973 1985 1997 2009 2021

Tiger: 1914 1926 1938 1950 1962 1974 1986 1998 2010 2022

Rabbit: 1915 1927 1939 1951 1963 1975 1987 1999 2011 2023

Dragon: 1916 1928 1940 1952 1964 1976 1988 2000 2012 2024

Snake: 1917 1929 1941 1953 1965 1977 1989 2001 2013 2025

Horse: 1918 1930 1942 1954 1966 1978 1990 2002 2014 2026

Ram: 1919 1931 1943 1955 1967 1979 1991 2003 2015 2027

Monkey: 1920 1932 1944 1956 1968 1980 1992 2004 2016 2028

Rooster: 1921 1933 1945 1957 1969 1981 1993 2005 2017 2029

Dog: 1922 1934 1946 1958 1970 1982 1994 2006 2018 2030

Boar: 1923 1935 1947 1959 1971 1983 1995 2007 2019 2031

Gung Hey Fat Choy! Happy Year of the Horse!

Chúc Mừng Năm Mới! Happy Tet 2014 - Year of the Horse!

Silicon Valley Real Estate Market Update

As we enter 2014, we found that the inventory of available homes to purchase fell to a record low! Just 523 single family residences were on the market at the New Year. This broke last year’s record low of 585. All the while, the Silicon Valley real estate market continues in its slower pace as it usually does this time of the year. After the holiday season, buyers and sellers start getting back to other matters like resuming their search for a home or thinking of entering the market to sell. There were 55% of the closings in Santa Clara County had a sale price greater than list price — 53% in San Mateo County. This ratio indicates or more accurately infers that there were multiple offers. Historically, the Silicon Valley real estate market shifts more toward a seller’s market after Super Bowl Sunday — the last “holiday” of the season.

Prices, as measured by the median price or the middle transaction, have been choppy to flat with a few exceptions. Santa Clara County median price for a single family residence stood at $775,000 in December, a slight decrease from November. However, San Mateo County turned in an increase to $1,050,000 from $942,000 last month as a higher percentage of higher-priced homes sold. Compared to the prior year levels, the Silicon Valley real estate trends continues to be positive. For instance, Santa Clara County’s median price stood 14.6% higher than in December 2012.

As mentioned above, the percentage of homes sold where sale price was greater than list price continues to drop but is still at a very healthy 55% in Santa Clara County. Highest is the Cupertino and Sunnyvale market area with 76% and lowest is in South County (Morgan Hill to Gilroy) with 22%. For San Mateo County, the overall percentage is 53% with the highest level in the Bay Cities of Belmont, Burlingame, Milbrae, San Carlos and San Mateo with 74%. The lowest percentage of homes that sold above list price is 19% on the San Mateo Coast (Half Moon Bay, El Granada, Moss Beach, Montara).

With an average days of unsold inventory (DUI) at 25, the hottest market area in Santa Clara County is the Los Altos and Palo Alto area with just 10 followed closely by the Cupertino and Sunnyvale market area. Coolest is in the East, Central, South San Jose market area at 32. For San Mateo County with an average DUI of 18, the hottest is the Bay Cities area comprising Belmont, Burlingame, Milbrae, San Carlos and San Mateo with 12 and the coolest is on the San Mateo Coast with 37. Why do I track these? Its important to understand the market dynamics of the supply versus the demand to advise clients on the most appropriate strategy to employ whether to buy or sell.

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. Thanks for reading!