With continued low inventory levels and higher demand from buyers, the April median price in the Silicon Valley real estate market jumped to their highest level since 2007 to $800,000 for a single family residence -- up 24% from the same month a year ago.
Similarly, the median price in April for condos and townhouses in Santa Clara County was $510,000, compared to $349,000 the same month a year ago which was a phenomenal 46% change.
For San Mateo County, the San Mateo real estate trends showed the April median price at $956,000, compared to $760,000, last year or a 25.8% increase.
As you know, a median price figure is the middle transaction so this statistical calculation won't necessarily translate into an across the board increase for each and every home. What it does indicate is a strong market pressure and an upward trend for the Silicon Valley real estate market.
The frequency of the sale prices exceeding list prices is 73% in Santa Clara County and 68% in San Mateo County. An indicator of the magnitude shows that the sale price to list price ratio averages 106.1% and 105.8% in Santa Clara County and San Mateo County, respectively.
An indicator I track closely in addition to the above ones, is the median days on market. This represents how long it takes for one-half of the listings to sell. In Santa Clara County, it is 10 days but just 9 in the Cupertino and Sunnyvale market area (hottest area in the county with a median sale price of $1,223,000) to 17 in the South County area which comprises Morgan Hill to Gilroy with a median sale price of $629,000. For the current San Mateo real estate trends, it is but 11 days.
If a listing lingers on the market significantly longer than the median, well then it is a candidate for an analysis to determine the possible cause(s) including price, condition, marketing, etc.
As the old Meat Loaf song went, "two out of three ain't bad". The last three buyers I helped recently, two strategies out of the three were successful. In the first one, with multiple offers, my advice to my buyers was to offer in a range above list price and doing so beat out the second-place offer by just $1,000 with eight offers and a sale price over $800,000. In the second transaction, the strategy devised by and used by my buyers failed. They calculated a dollars per square foot against comparable homes. For residential, this approach only works when you get lucky as in winning the lotto but I use this in addition to other aspects in my commercial transactions. Their offer came in tenth out of ten and they missed purchasing a beautiful home by over $100,000. For the third one, my buyer listened and followed my advice to offer in a range above list price and even though he didn't have the highest priced offer, the seller did accept his offer and closed recently. For this one, there was more to my strategy than just price so on that basis, he won. In the two successes, I not only gave advice on the minimum but on the maximum to pay for the home. By the way, my long-term average performance is a success rate of 60% so these last three upped my average slightly!
In the last few weeks, I've noticed a change in the market in the favor of the buyers! Many homes have generated multiple offers but not to the extent that we saw in the early part of the year. This is in keeping with the historical tendency as we near Memorial Day weekend that buyers decide they have other things to do -- e.g., graduations, weddings, anniversaries, planning for vacation when school gets out, etc. Also noted is that the inventory levels or those homes available to purchase have risen lately, affording more choices for buyers. For single family residences, the highest inventory in seven months and for condos and townhouses, the highest level in eleven months!
Notwithstanding my prior comments about the market conditions during April, buyers that have pulled back from actively looking for a home for whatever reason, now stand a much better chance of being able to buy with less competition than in the recent past. Mortgage rates still remain favorable but have nudged up a bit but still in artificially low levels as the Feds continue to purchase a mixture of U.S. Treasury and mortgage-backed securities to the tune of about $85 billion per month! Their most recent comments contain a lot of double-speak thus raising the risk of a change in their programs -- e.g., less buying and the risk of higher mortgage rates. In following the money, a lot of the funds created in the banking system have gone into asset categories like stocks and real estate (Google recently hit $900 and LinkedIn $200). This is the "new" way the government prints money.
Please leave a comment or question if there is something you'd like to hear more about or would like information about the market in your neighborhood or contact me through my website or send me an email. Thank you for reading!
Showing posts with label single family residence. Show all posts
Showing posts with label single family residence. Show all posts
Friday, May 24, 2013
Thursday, June 14, 2012
June Silicon Valley Real Estate Market Comments
Here are my observations of the most recent May 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 continue at lower levels continuing the pattern of most of the year thus far. Normally, inventory levels start their climb in early spring and peak by mid-year but not this time. Since there have been a good amount of buyer demand, this condition has set up many areas as seller's markets -- many buyers chasing relatively few properties with its tendency toward multiple offer situations. This condition is occurring in both counties but certainly not in every area. The market continues to be more brisk in Santa Clara County than San Mateo County at present.
Want to Be First Time Buyers? Part 2 -- If rents going up are getting you down, and you expect to live in the area for a reasonable period, it may be advantageous to own than to rent! Mortgage rates continue at virtual cartoon-like levels with about 85% of borrowers choosing a fixed rate loan product.
Median Prices Increase -- Beware of the month to month numbers you read in the press or see on the internet -- they don't mean much! Year over year is much more meaningful as it eliminates the seasonality of the market. For May, Santa Clara County's median price for single family residences, half above and half below or the middle transaction, increased to $640,000, as more and more lower priced homes have been scooped up.
14 will get you 51 -- Some real estate practitioners are mentioning that it takes about eight weeks (51 days) to sell a home and they consider that good. However, most seller's 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 14 days to sell half of the homes. That is the median days on market. The 51 figure is the average. The difference is that those homes that have issues or are grossly overpriced 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.
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!
According to a City of Sunnyvale press release, the city now reports the highest rate of construction and permitting in its history! Included in the issuance was a permit for a 75,000 square foot building that will house LinkedIn. The presser went on to say "construction activity in Sunnyvale has significantly increased in the past 18 months. Development activity is led by new office and R&D construction, both new building construction and tenant improvements, and residential development
is also experiencing a resurgence of interest."
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.
General Market Observations and Comments -- The amount of homes (single family and condos and townhouses) available for sale continue at lower levels continuing the pattern of most of the year thus far. Normally, inventory levels start their climb in early spring and peak by mid-year but not this time. Since there have been a good amount of buyer demand, this condition has set up many areas as seller's markets -- many buyers chasing relatively few properties with its tendency toward multiple offer situations. This condition is occurring in both counties but certainly not in every area. The market continues to be more brisk in Santa Clara County than San Mateo County at present.
Want to Be First Time Buyers? Part 2 -- If rents going up are getting you down, and you expect to live in the area for a reasonable period, it may be advantageous to own than to rent! Mortgage rates continue at virtual cartoon-like levels with about 85% of borrowers choosing a fixed rate loan product.
Median Prices Increase -- Beware of the month to month numbers you read in the press or see on the internet -- they don't mean much! Year over year is much more meaningful as it eliminates the seasonality of the market. For May, Santa Clara County's median price for single family residences, half above and half below or the middle transaction, increased to $640,000, as more and more lower priced homes have been scooped up.
14 will get you 51 -- Some real estate practitioners are mentioning that it takes about eight weeks (51 days) to sell a home and they consider that good. However, most seller's 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 14 days to sell half of the homes. That is the median days on market. The 51 figure is the average. The difference is that those homes that have issues or are grossly overpriced 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.
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!
According to a City of Sunnyvale press release, the city now reports the highest rate of construction and permitting in its history! Included in the issuance was a permit for a 75,000 square foot building that will house LinkedIn. The presser went on to say "construction activity in Sunnyvale has significantly increased in the past 18 months. Development activity is led by new office and R&D construction, both new building construction and tenant improvements, and residential development
is also experiencing a resurgence of interest."
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.
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