July Silicon Valley Real Estate Market Comments

Here are my observations of the most recent June 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 or send me an email.

General Market Observations and Comments -- The amount of homes (single family and condos and townhouses) available for sale continue at low levels continuing the pattern started at the beginning of the year. Normally, inventory levels start their climb in early spring and peak by mid-year but not this time. Most areas in both counties have the characteristics of a seller's market with more than half of the closings during June had a sales price greater than a list price. A well-priced listing has a tendency to attract multiple offers.

Want to Be First Time Buyers? Part 3 --  Rents are continuing to jump as there is more demand than supply of rental units. This week, mortgage rates again reached record lows so it may be more advantageous to own than to rent provided you plan on living in the home for a while.

Median Prices Increase -- Median prices of single family, condo and townhouse homes continue to march upward. For June, Santa Clara County's median price for single family residences, half above and half below or the middle transaction, increased to $686,000, as more and more lower priced homes have been scooped up whereas the median sales price for San Mateo County was $840,000.

Median Days on Market Drops -- Some real estate practitioners are mentioning that it takes on average about six weeks (40 days) to sell a home and they consider that good. However, most sellers wouldn't consider that good when you tell them it will take an average of that long to sell! In actuality, it now takes but 13 days to sell half of the homes. That is the median days on market. The difference is that those homes that have issues, are grossly overpriced or just plain super expensive sit on the market for a long time thus bringing the average up and does not impact the median which is the middle transaction. When I provide advice to sellers I use the median and calculate it down to their neighborhood or as small an area as possible.

Inventory of Available Homes for Sale Continue at Low Levels -- There were just 1,296 single family residences for sale in Santa Clara County and just 606 in San Mateo County. Not record lows but each are about 56% lower than in June 2011.

What's HOT and What's NOT -- In Santa Clara County, the hottest market area is Santa Teresa, North Valley, Blossom Valley portions of San Jose and Milpitas with a Days of Unsold Inventory (DUI) of 24. In San Mateo County, the hottest area is Foster City with a DUI of 18. What's not is Los Gatos/Saratoga in Santa Clara County with a DUI of 66 and the expensive areas of Menlo Park, Atherton, Portola Valley, Hillsborough and Woodside in San Mateo County with a DUI of 76.
 
OK, I'm bragging so I'm repeating that Sunnyvale is #7 in the U.S. -- According to the Kiplinger Personal Finance survey, Sunnyvale was named as the 7th greatest city in the United States to raise kids. As a long-time resident of Sunnyvale and where my wife and I have raised our two sons, I'd have to agree! For a glimpse at Kiplinger's write-up of Sunnyvale, here's a link.


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

July Silicon Valley Real Estate Market Comments

Here are my observations of the most recent June 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 -- Closings continue to increase in both counties but the level remains below the average of the past ten Junes. The "market" seems like it is bipolar. There is one portion of well-priced, good condition homes that sell quickly and those others which are over-priced or have other issues like poor condition that linger on the market for a long time. Inventory, or the number of homes available for sale (supply) has increased but it, too, continues to grow at a slower rate than the ten-year average.

Buyer demand continues to point to single family residences (SFR) and away from condos/townhouses. This is especially evident for First Time Buyers as well as Investors. About a third of all transactions are for all cash. I continue to advise buyers that if there is a preference for the life-style of a condo or townhouse, there are better buys possible and buyers can have more advantages than sellers. Yes, condos and townhouses have homeowner association dues, of course, that often cover additional ownership features and benefits (e.g., utilities, pool/spa, exercise rooms, and the like) but the owner doesn't have to worry about mowing the lawn!

Of the 1,128 Santa Clara County single family homes that closed escrow in June, 50% sold in 22 days! One of my closings last month was a Sunnyvale home on the market just six days. It sold comfortably above list price. Another of my closings, a Santa Clara home in a nice neighborhood sold in about a month for 6% under list price.

The northwest quadrant of Santa Clara County continued to be the hottest market area, as was the case last month. The area comprises the cities of Mountain View, Los Altos and Palo Alto. This area had the lowest DUI reading in Santa Clara County of just 37 days, clearly a seller's market. Next door, Sunnyvale and Cupertino had a DUI of 50, balanced to seller's market. Some of us are calling this the "Facebook" effect. By contrast, the DUI for the expensive Los Altos Hills is 153, clearly indicating a buyer's market.

Days of unsold inventory (DUI) for Santa Clara County by price range is interesting. Overall, the DUI reading was 60, up slightly from last month of 58. The DUI for homes priced under $450,000 was just 35 days; those priced from $450,000-600,000 was 59 days; those priced from $600,000-750,000 was 74 days; from $750,000 to $1 million was 66 days; from $1.0 million to $2.5 million was 74 days; from $2.5 million to $5.0 million jumped to 225 days and finally, those priced above $5.0 million was 1,330 days! Clearly, the higher priced homes in both counties may have to undergo more aggressive price concessions to move in this bipolar market environment. One of my clients leased a new, never-been-lived-in Hillsborough home a bit more than two years old that the owner tried to sell ever since he completed the construction. List price was $4.8 million and the home never had a price adjustment during the entire time on the market!

Days of Unsold Inventory is an indicator I use to gauge whether the market is a Buyer's market, Seller's market or what we call a Balanced market. In Santa Clara County, the Buyer's market are for those areas above 90 DUI a Seller's market would have a DUI reading under 45. Balanced markets are those in between.

Mortgage rates remain very favorable in the range in the high 4% to about 5% 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.

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.