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!

October Silicon Valley Real Estate Market Update

Here are my observations of the most recent September 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 to drift lower, continuing to advantage sellers. Levels reached are among the lowest in the last 12 years! Most areas in both counties have the characteristics of a seller's market with more than half of the closings during September had a sales price greater than a list price (59% in Santa Clara County and 50% in San Mateo County). That said, a well-priced listing has a tendency to attract more activity and multiple offers.

Which Half Are You? --  In September, it took just 13 days to sell half of the homes in Santa Clara County and only 16 days in San Mateo County! If you know of a home that has been on the market longer than the median days on market then there must be something wrong no only with the marketing strategy employed but with its condition, location, and oh yes, maybe the price.  These are countywide averages. 

In Santa Clara County, the fastest market is the Cupertino and Sunnyvale (zip codes 95014, 94086, 94087) market area with a median days on market of just 9 whereas the slowest is Los Gatos and Saratoga with a median days on market of 30 for those that closed escrow during the month. For San Mateo County, the fastest market area comprises the Bay Cities of Belmont, Burlingame, Millbrae, San Carlos and San Mateo with 13 and the slowest is the Coastal area of Half Moon Bay, El Granada, Moss Beach and Montara with 68.

Median Prices Increase -- Median prices of single family, condo and townhouse homes continue to march upward. For September, Santa Clara County's median price for single family residences, half above and half below or the middle transaction, increased to $649,000, compared to $598,000 the same month a year ago representing an increase of 16.2%. The median sales price for San Mateo County was $790,000.

Inventory of Available Homes for Sale Continue at Low Levels -- There were just 1,211 single family residences for sale and 257 condos/townhouse in Santa Clara County and just 598 single family residences in San Mateo County. Not record lows but each are about 55% lower than the same month a year ago.

Yahoo! HQ, Sunnyvale, CA

 What's HOT and What's NOT -- In Santa Clara County, the hottest market area is Cupertino and Sunnyvale with a Days of Unsold Inventory (DUI) of 19. In San Mateo County, the hottest area is Foster City/Redwood Shores with a DUI of 20. What's not is Los Gatos/Saratoga in Santa Clara County with a DUI of 99 and the expensive areas of Menlo Park, Atherton, Portola Valley, Hillsborough and Woodside in San Mateo County with a DUI of 137.

History Repeats Itself? -- Median prices in some areas have either met or closely approached their all-time highs! Yes, you read that right. Median prices in Santa Clara County saw a bottom in place in the Spring of 2009 and have trended up since. When analyzing the different market areas in the county, we find that two fall into this category. They are: the Los Altos/Palo Alto (median price of $1,834,000) and the Cupertino/Sunnyvale (zip codes 95014, 94086 and 94087; median price of $1,049,000) market areas.

Thanks for reading! 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.