Silicon Valley Real Estate Trends

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!

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.

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.

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.

May Silicon Valley Real Estate Market Comments

Here are my observations of the most recent April 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 and have actually turned back down! At this time of the year, normal market activity would be an increasing inventory.  As buyers enter the market, they have fewer choices and we see many instances of multiple offer situations with sale prices much higher than list prices. This has created a seller's market situation in most areas in both counties. The market is more brisk in Santa Clara County than San Mateo County at present, no change from recent past.

Where Have All the Regular Sellers Gone? -- Part 2 -- I make recommendations to sellers contemplating a sale of a home or property that they've owned a long time to get counsel from their professional tax preparer or CPA.  If new legislation is not enacted before the end of 2012 to either extend the current capital gains tax rates or substantially modify them, the capital gains tax rates will about double next year. Definitely, something that must enter into any discussions BEFORE deciding on a timeline for a sale.  Of course, you can also gamble that Congress will act just in time!

Want to Be First Time Buyers? --  If you or someone you know are complaining about a recent large rent increase, it may be actually cheaper to own than to rent!  Mortgage rates at virtually at 60-year lows and about 85% of borrowers choose a fixed rate loan product - smart to lock in the low rates providing you have a reasonable time horizon.

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 April, Santa Clara County's median price for single family residences, half above and half below or the middle transaction, increased to $635,500, up 9.9% from $578,000 in April 2011. San Mateo County's median price stood at $725,000, up 3.6% from $700,000 the same month a year ago.

For condos/townhouses, Santa Clara County's median price was $347,500 in April versus $282,250 the same month a year ago, representing a 23.1% increase. For San Mateo County, the median stood at $405,000, up 3.2% from $392,500 in April 2011.

Lender Controlled Transaction Update -- A lender controlled transaction is either a short sale (pre foreclosure) or a bank-owned (REO or real estate owned by a bank). The range in Santa Clara County was 3% in Cupertino/Sunnyvale/Los Altos/Palo Alto area to a high in South County (Morgan Hill/San Martin/Gilroy of 62%. For San Mateo County the range was a low of 13% in Foster City/Redwood Shores to a high of 24% in the Coastal areas.


Days of Unsold Inventory (DUI) continues steady drop in each county/area -- For Santa Clara County, the lowest DUI (fastest market) was 28 days in the Santa Clara/Willow Glen/Cambrian/Campbell area whereas the highest DUI was 75 days in Los Gatos/Monte Sereno/Saratoga area. San Mateo County had a DUI of 27 days in Foster City/Redwood Shores to a high of 133 in the expensive areas of Hillsborough/Portola Valley/Woodside/Atherton. See your Realtor for information on a particular area or neighborhood market condition.

Sale Price to List Price Ratio (single family residences) -- For Santa Clara County, this ratio is running about 40% or about two in five closings had a sale price above list price. The range was a low of 29% in South County (Morgan Hill, San Martin, Gilroy) to a high of 60% in Los Altos/Palo Alto with the Cupertino/Sunnyvale area coming in at 52%. For San Mateo County, the ratio stood at about 35% or about one in three. The range was a low of 16% in Coastal (Half Moon Bay) to a high of 44% in Foster City/Redwood Shores.


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.

March Silicon Valley Real Estate Market Comments

Here are my observations of the most recent February 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 and have actually turned back down! As buyers enter the market, they have fewer choices and we see many instances of multiple offer situations with sale prices much higher than list prices.

First Time Buyers - What to Buy a Home with a 3 1/2% Down Payment? -- You can! These FHA loans have current rates of 3.875% with no points! The downside -- they are increasing their mortgage insurance premiums next month.

For February, Santa Clara County's median price for single family residences, half above and half below or the middle transaction, increased to $530,000, up 1.9% from $520,200 in February 2011. San Mateo County's median price stood at $580,000, down 2.5% from $595,000 the same month a year ago.

For condos/townhouses, Santa Clara County's median price was $310,000 in February versus $295,000 the same month a year ago, representing a 5.1% increase. For San Mateo County, the median stood at $376,000, down 3.3% from $389,000 in February 2011.

Sales (my definition is closed transactions), increased in each county. For Santa Clara County, closings increased 35% for single family residences to 918 from 679 the same month a year ago and increased 32% for condos/townhouses to 413 from 313 in February 2011. In San Mateo County, closings increased 46% for single family residences to 370 from 252 in February 2011 and increased 44% for condos/townhouses to 117 from 81 in February 2011.




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.

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.

January Silicon Valley Real Estate Market Comments

Here are my observations of the most recent December 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 continued their downwards trend in December. 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. Inventory, or the number of homes available for sale (supply) resembles what it was in December 2005. Many of will recall that the real estate market was super active then with almost no lender-controlled listings.

Still the case is a bifurcated market condition. Homes available for sale have a median days on market of about 70 days whereas those homes that closed escrow have a median days on market of less than 35 days. Homes priced well and in good condition, sell quickly and get the most activity (i.e., higher prices, quicker sale). Overpriced homes or those in poor locations or in poor condition (bank-owned or short sale homes are mainly in this category) stay on the market far longer.

Mortgage rates remain very favorable for buyers in the range in the high 3% to low 4% area. 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. Even with lowered sales figures, escrow companies seem to be busy with loan refinance or refi activity. I've advised those buyers who purchased last year to refinance their "low" 4 3/4% loans and lock in a high-3% loan rate for the long haul.

For December, median price for single family residences, half above and half below or the middle transaction, stood at $530,000, a slight decrease from November and down about 1% from December 2010. Not too much you can make of this as the mix of homes is in constant change mode. Better to look at a smaller area or even neighborhood to get an idea of the price trends. When you do this analysis of various areas, we find prices actually increased a bit in a range of 4-8%!

Got that "love" note from your landlord or property manager yet? Rents have been impacted by demand from those who lost homes to foreclosure, new family formations and an improved employment picture in Silicon Valley. So much so that rents have increased about 12-15% from last year. Any end in sight? I don't think so as available homes to rent which has been steady in recent times will go up a bit as there are some developments of apartments going. The amount is insufficient to offset the increased demand that has and is taking place. Time for investors? That's what I've been saying for a while now.


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.

November Silicon Valley Real Estate Market Comments

Here are my observations of the most recent October 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 as well as the number of homes available for sale have decreased these past few months in both counties. Inventory, or the number of single family homes available for sale (supply) has stood at 2,200 in Santa Clara and 1,203 in San Mateo County. These figures are substantially less than those in the year prior. 73% of the inventory in Santa Clara County are traditional and the balance are lender-controlled (short sales 19%; bank-owned/REO's 8%); San Mateo County saw these figures at 77% for traditional, 16% for short sales and 7% for bank-owned/REO's.

Much different with condos/townhouses where 55% in Santa Clara County and 48% in San Mateo County are lender-controlled. Demand continues to point to single family residences (SFR) and away from condos/townhouses so my advice for buyers: if you prefer the life-style of a condo or townhouse, there are better buys possible. Yes, they have homeowner association dues but those often cover additional ownership features and benefits (e.g., some utilities, pool/spa, exercise rooms, and the like). One thing about it is that the owner doesn't have to worry about these items.

As for the available homes for sale -- we're seeing a bifurcated market. How I can tell is that homes available for sale have a median days on market of 69 whereas those homes that closed escrow have a median days on market of just 31. Homes priced well and in good condition, sell quickly and get the most activity (i.e., higher prices, quicker sale). Overpriced homes or those in poor locations or in poor condition (bank-owned or short sale homes are mainly in this category) stay on the market far longer.

Days of unsold inventory (DUI) for Santa Clara County stands at 57 for SFR's, 48 for condos/townhouses. San Mateo County stands at 83 for SFR's and 72 for condos/townhouses.

Days of Unsold Inventory is a calculation I use to gauge whether the market is a Buyer's market, Seller's market or what we call a Balanced market and is the intersection of supply and demand. In Santa Clara County, the Buyer's market exists for those areas above 90 DUI, a Seller's market would have a DUI reading under 45 and a Balanced market exists in between those numbers.

Mortgage rates remain very favorable in the range in the low 4% area. 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. Even with lowered sales figures, escrow companies seem to be busy with loan refinance or refi activity.

For October, SFR median prices, half above and half below, stood at $550,000 and $675,000 for Santa Clara and San Mateo counties, respectively. Condos/townhouses stood at $316,500 and $355,000, respectively.

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.

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.

May Silicon Valley Real Estate Market Comments

Here are my observations of the most recent April 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 at www.thomasmcevoy.com .

> General Market Observations and Comments -- Closings increased a bit more in April than in March, indicating continued strength in the various real estate markets in Silicon Valley. Inventory, or the number of homes available for sale (supply) has increased but it continues to grow at a slower rate than the average of the past ten years.

Demand continues to point to single family residences (SFR) and away from condos/townhouses. My advice for buyers: if you prefer the life-style of a condo or townhouse, there are better buys possible. Yes, they have homeowner association dues 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 it.

As for the available homes for sale -- we're seeing a bipolar market. Homes priced well and in good condition, sell quickly and get the most activity (i.e., higher prices, quicker sale). Overpriced homes or those in poor locations or in poor condition stay on the market far longer and eventually sell with lower prices or as "fixer uppers" or "fix and flips".

Last month, I stated that one of the hot markets was the area comprising the cities of Mountain View, Los Altos and Palo Alto. For April, this continued to occur but the market with the fewest days of unsold inventory was Sunnyvale and Cupertino. The DUI reading was only 34, clearly a Seller's market! My most recent Sunnyvale listing in the Cupertino Schools attendance area garnered about 200 people in a single weekend of open houses and sold in six days, above list price. This home listed above $1 million.

Days of unsold inventory (DUI) by price range is interesting. The DUI for homes priced under $450,000 was just 32 days; those priced from $450,000-600,000 was 56 days; those priced from $600,000-750,000 was 75 days; from $750,000 to $1 million was 67 days; from $1.0 million to $2.5 million was 73 days; from $2.5 million to $5.0 million jumped to 325 days and finally, those priced above $5.0 million was 443 days. Clearly, the higher priced homes may have to undergo more aggressive price concessions to move in this bipolar market environment.

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 in a very favorable range in the high 4's, actually decreased from last month. Since most buyers need a loan to purchase a home, mortgage rates are a major consideration in the decision and ability of the buyers.

Since there were continued problems obtaining accurate detailed statistical information on April transactions, I thought to at least provide you some of my observations. I'm available for consultation if you are seeking marketing intelligence and strategies as you firm up your real estate plans.

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.

April Silicon Valley Real Estate Market Comments

Here are my observations of the most recent March 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 turned up sharply in March, indicating much stronger markets in Silicon Valley. Additionally, the amount of homes available for sale (supply) has increased as it usually does in the last winter, early spring. However, what's different is that the rate of increase is lower than the average over the last ten years.

Demand continues to point to single family residences (SFR) and away from condos/townhouses. My advice for buyers: if you prefer the life-style of a condo or townhouse, there are better buys possible. Yes, they have homeowner association dues 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 it.

As for the available homes for sale -- we're seeing a bipolar market. Homes priced well and in good condition, sell quickly and get the most activity (i.e., higher prices, quicker sale). Overpriced homes or those in poor locations or in poor condition stay on the market far longer and eventually sell with lower prices or as "fixer uppers" or "fix and flips".

Last month, I stated that one of the hot markets was the area comprising the cities of Mountain View, Los Altos and Palo Alto. This continues to occur but has spilled out to include some adjacent areas. One case involves Sunnyvale, where homes in the Cupertino school attendance area are selling rather quickly with multiple offers if they are good values and in good condition. These include those with list prices above $1 million.

Mortgage rates remain in the high 4 to low 5% range. Certainly this is positive inducement for buyer's home affordability. If rates go to 5 1/2%, that would be equivalent to a 10% increase in the price in terms of affordability. Those buyers needing financing could be forced to "buy down" or not buy at all if rates should seek higher ground.

Since there were problems obtaining accurate statistical information on March transactions, I thought to at least provide you some of my observations. I'm available for consultation if you are seeking marketing intelligence and strategies as you gel your real estate plans.

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.

March Silicon Valley Real Estate Market Highlights

Here are the highlights of February transactions and market comments 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.

> Market Overview -- The decrease in the amount of closed sales in both counties continues, an indicator of slowing markets. Closings of single family residences (SFR) in Santa Clara County decreased slightly from last month to 632 at match the level of the same month a year ago. For San Mateo County, SFR closings were 221, down from 234 last month and down from 230 from the same month a year ago. My analysis of the transactional information reveals:

* The supply of single family residences available for sale (inventory) in Santa Clara County, increased to 2,417 from 2,335 and is 10.1% higher than the same month a year ago. Similarly, we saw San Mateo County's inventory jump to 1,158 from 1,088 last month and was 18.2% higher than the same month a year ago. Keep in mind that many sellers remove their homes from the marketplace at the end of the year so this is not unexpected to see an increase into the first part of a year. The rate of increase is not too steep so that portends a more positive market environment. Generally, inventory is about on track with the ten-year average -- not too high or not too low. Against this backdrop, the market continues more positive in Santa Clara County than in San Mateo County.

* 46.5% of sellers in Santa Clara County get at least list price for their homes! In San Mateo County, the corresponding percentage is 43.9%. This is another indicator that the overall market remains stronger in Santa Clara County. Also, these indicators have perked up a bit in each county.

* Days of Unsold Inventory (DUI), continues to move lower making for a more positive market in both counties. We watch this important indicator closely to provide insight into how the market is handling demand and supply. DUI is a calculation using both supply and demand so is not an opinion. A higher figure for DUI, then, means the market is becoming weaker. For February, Santa Clara County had a DUI of 56 for SFR's, down from 62, 58 for condos/townhouses, down from 64 and 99 for multi-unit properties, up slightly from 95. San Mateo County had a DUI for SFR's of 71 down from 85 last month, 87 for condos/townhouses down from 103. Once again, all readings continue to point to a more positive market for Santa Clara County.

> Seller Markets? -- For Santa Clara County the hottest (seller) market areas are Santa Teresa, South San Jose, and East Valley portions of San Jose followed by the market area comprising Mountain View, Los Altos and Palo Alto. For San Mateo County, there were again NO hot markets! A seller's market has characteristics of a shorter time on the market, fewer number of homes available for sale, higher demand by buyers along with a tendency for multiple offers and sale prices generally exceeding list prices. A seller's market area has a potential of price appreciation.

> Buyer's Markets? -- For Santa Clara County, we see buyer's markets in the Willow Glen area of San Jose and Campbell. Willow Glen is currently my "Best Buy" area in the county. For San Mateo County, we see buyer's markets in Foster City/Redwood Shores and especially the San Mateo Coast cities. The "Bay Cities" of San Mateo County like San Mateo, Redwood City, etc. are a bit cool. What makes a buyer's market is the relationship of supply to demand -- simply put as higher supply relative to demand, the area will have the characteristics of a longer time on the market, higher number of homes available for sale, lower demand by buyers which translates into a lower probability of multiple offers and a tendency for price stabilization or even price depreciation. We see buyer's market areas have price reductions before a buyer makes an offer.

Where do I get "Seller's" and "Buyer's" market information? This is not based on price levels but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI).

> Median prices have moved lower in Santa Clara County but increased in San Mateo County -- The median price for SFR's in Santa Clara County has decreased for the last several months. It now stands at $530,000, versus $532,000, or a 0.4% decrease from last month and a decrease of 4.0% from the same month a year ago. The median price for condos/townhouses was unavailable due to incomplete data. San Mateo County's median price for SFR's was $640,000, up 8.5% from $590,000 last month and down 2.3% from the same month a year ago. The median price for San Mateo County condo/townhouses was $372,500, up 1.4% from $367,500 last month and down 1.7% from the same month a year ago. I continue to advise my clients NOT to use an entire county's median price level to decide whether to buy or sell or time the market as market areas within each county differ. For instance, I see divergencies in the different market areas in each county so these are general statements. Ask me to provide you with how your area compares.

> $5+ million sales return! -- More rare is the fact that there are now some high end transactions that have taken place in Santa Clara and San Mateo counties. Matter of fact, there were 7 sales in each county last month. I use this as a leading indicator of market conditions which have swung to positive in other price ranges as well.

Need help with understanding the market in your area? For instance, how can there be a difference between the relatively hot market conditions in Los Altos and Palo Alto but very cool market conditions in Campbell? Give me a call or email me for a no-obligation consultation and research to arm you with market intelligence to help you make a better, more-informed decision.


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.

September Silicon Valley Real Estate Market Highlights

Here are the highlights of August transactions and market comments for Santa Clara and San Mateo counties. 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. You may leave comments here, or contact me through my website.

> Market Overview -- Since the March-April 2009, we've seen a general improvement in market conditions but lately the market has slowed. Closings of single family residences (SFR) in Santa Clara County decreased to 864 from 1,008 last month and was down 11.7% from the same month a year ago. San Mateo County saw a slightly higher SFR closings level of 395 versus 387 last month and up 8.2% from the same month a year ago. My analysis of the transactional information reveals:

* The supply of homes available for sale (inventory) is trending upwards in both counties these past six months which is usual for this time of the year. However, the rate of increase has slowed significantly. Inventory in both counties are higher than the same month a year ago.

* 48.7% of sellers in Santa Clara County get at least list price for their homes! In San Mateo County, the corresponding percentage is 41.3%. This is an indicator that the overall market remains stronger in Santa Clara County. Also, these indicators have drifted lower and underscore a slowing market in both counties.

* Days of Unsold Inventory (DUI) continues an upward trend translating into a slowing market. DUI is conceptually the inverse of inventory turns ratio and represents a calculation using both supply and demand. A higher figure for DUI, then, means the market is becoming weaker. For August, Santa Clara County had a DUI of 81 for SFR, 87 for condos/townhouses and 176 for multi-unit properties. San Mateo County had a DUI reading of 106 for SFR's and 133 for condos/townhouses. Notice that all readings were more positive for Santa Clara County.

> Seller Markets? -- For Santa Clara County the hottest (seller) market areas are South San Jose and Santa Teresa parts of San Jose, Cupertino, and East Valley and Evergreen Valley parts of San Jose. A seller's market has shorter time on the market, fewer number of homes available for sale, higher demand by buyers with a tendency to have multiple offers and sale prices generally exceeding list prices with a potential of price appreciation.

> Buyer's Markets? -- For Santa Clara County, we see buyer's markets in Almaden Valley, Willow Glen, Campbell and Cambrian. Willow Glen, Campbell and Cambrian are my current "Best Buy" areas in the county. What makes a "buyers" market is the relationship of supply to demand -- simply put as higher supply and lower demand. The characteristics of a buyer's market is a longer time on the market, higher number of homes available for sale, lower demand by buyers which translates into a lower probability of multiple offers and a tendency for price stabilization or even price depreciation.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion or based on price levels but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI).

> Median prices flatten out -- Santa Clara County median price for SFR's increased 12.4% to $629,500 from $560,000 in August 2009. The median price for condos/townhouses was $347,500 or 5.3% higher than the same month a year ago. San Mateo County's median price for SFR's was $790,000, 15.3% higher than the same month a year ago, whereas condos/townhouses was $443,750, 8.5% lower. Notice that with prices I don't use month to month changes but year over year. This eliminates seasonal fluctuations and is something that newspapers and most online pricing sources haven't figured out yet! Or, perhaps they use this intentionally to scare folks so that they can sell more newspapers! However, I advise my clients NOT to use an entire county's median price level to decide whether to buy or sell or time the market but use the trend information in a general manner. To formulate an effective strategy, I use analysis of the supply-demand characteristics of the neighborhood under consideration and advise my clients of the appropriate strategy they should employ to maximize their dollars if they are selling and maximize their house if they are buying.

> Boo! Buyers get ready -- Historically, a good time to buy is approximately at the time of Halloween. I don't see it any different this year. I recommend sellers sell now and buyers buy later in the fall.

Need help with understanding the market in your area? Give me a call or email me for a no-obligation consultation and research to arm you with market intelligence to help you make a better, more-informed decision.


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.

April Silicon Valley Real Estate Market Highlights

Here are the highlights of March's transactions and market comments for Santa Clara and San Mateo counties. Your comments and questions are welcome. If you have an update as to what you are witnessing in your neighborhood, please don't hesitate to share with us. You may leave comments here, or contact me through my website.

> Market Overview -- It's been a year since we saw the bottom of the real estate market in Santa Clara County. Since then we've seen pretty much a steady improvement in market conditions and this is more apparent in Santa Clara County than San Mateo County. Closings of single family residences (SFR) in Santa Clara County were 917 versus 633 last month and 721 in March 2009. San Mateo County also saw higher SFR closings at 322 compared to 250 in the same month a year ago. Higher activity levels and more buyers willing to make the decision to purchase is what we're finding. Buyers seeking low prices AND a chance to garner a tax credit or two are a little late to the scene. My analysis of the transactional information reveals:

* The supply of homes available for sale (inventory) has turned upwards after more than a year of continual decline. This is taking place in both counties. However, the levels are still substantially below the year ago levels. Santa Clara County inventory of available SFR's increased 8% from last month and San Mateo County's inventory increased 12%.

* Headline you don't see in the San Jose Mercury News -- "HALF OF HOME SELLERS GET MORE THAN LIST PRICE FOR THEIR HOMES!" The sale price to list price ratio continues above 100% and stands at 100.9% in Santa Clara County and increased a bit to 99.6% for San Mateo County. Big news continues in the percent of closings where sale price exceeded list price -- Santa Clara County was 49.7% and San Mateo County was 39.9%. This indicates the overall market is stronger in Santa Clara County.

* The Days of Unsold Inventory (DUI) continues to show improvement -- as readers will remember that a lowering of this number translates into a faster market. DUI is conceptually the inverse of inventory turns ratio, where a higher number means improvement. A lower figure for DUI means improvement. For March, Santa Clara County had a DUI of 44 for SFR, 41 for condos/townhouses and 68 for multi-unit properties. San Mateo County had a DUI reading of 45 for SFR's, 45 for condos/townhouses and 105 for multi-unit properties.

> HOT Markets? -- You bet and there are more of them, too! For Santa Clara County the hottest (seller) market areas are South San Jose, East Valley, Evergreen, North Valley, and Milpitas with Cupertino not far behind. For San Mateo County, the hottest markets are those bay-side cities of Belmont, San Carlos, Redwood City and San Mateo, followed by more expensive areas of Menlo Park, Woodside, and Portola Valley. The characteristics of a seller's market are shorter time on the market, fewer number of homes available for sale, higher demand by buyers which translates into a higher probability of multiple offers, sale prices generally exceeding list prices and a tendency towards price appreciation.

> Cool Markets? -- Yes, but there is fewer of them. For Santa Clara County, we see buyer's markets in Los Gatos Mountains and Los Gatos/Monte Sereno. Los Gatos is my current "Best Buy" area in the county. In San Mateo County, besides the more expensive areas, there are buyer's markets in the coastal communities. To refresh you, characteristics of a buyer's market are longer time on the market, higher number of homes available for sale, lower demand by buyers which translates into a lower probability of multiple offers and a tendency for price stabilization or even depreciation.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI). Additionally, this is not based on price levels or my opinion but a supply-demand relationship.

> Median prices jump in Santa Clara and San Mateo Counties -- Santa Clara County median price for SFR's jumped to $600,000 versus $450,000 or 33% increase from March 2009. The median price for condos/townhouses was $375,000 or 57% higher than the same month a year ago. San Mateo County's median price for SFR's reached $800,000, 38% higher than the same month a year ago. Notice that with prices I don't use month to month changes but year over year. This eliminates seasonal fluctuations and is something that newspapers and most online pricing sources haven't figured out yet! Or, perhaps they use this intentionally to scare folks to sell newspapers! I advice my clients NOT to use an entire county's median price level to decide whether to buy or sell but use the trend information in a general manner. To formulate an effective strategy, I use analysis of the supply-demand characteristics of the neighborhood under consideration and advise my clients of the appropriate strategy to employ to maximize their dollars if they are selling and maximize their house if they are buying.

Need help with understanding the market in your area? Contact me at Tom.McEvoy@remax.net for a no-obligation consultation and research to help you make a better decision.


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

September Silicon Valley Real Estate Market Highlights

Here are my observations of August's transactions and market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood or area.

> Market continues showing improvment -- Market activity continues to display improvement, something that we've been saying for the past four months. For instance, in Santa Clara County, July saw a 38% increase in closings over the same month last year. My analysis of the transactional information reveals:

• Buyers continue to trip over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties. Many offers submitted are for all cash or have substantial down payments. There are still only 20 days of unsold inventory on single family residences in Santa Clara County with a price of under $450,000.
  
• The supply of homes available for sale (inventory) continues to trend lower in each of the four counties without exception. The lower trend is more pronounced in Santa Clara and Monterey counties.
  
• The number of closings have turned are now lower in each county as the seasonality takes hold as we see less closings in the late summer after a peak around Memorial Day.
  
• The Days of Unsold Inventory (DUI) continues to improve generally in each county for single family residences and condos/townhouses, respectively. Santa Clara's DUI stands at 51 and 42, San Mateo's DUI is 74 and 70, Santa Cruz's DUI is 97 and 105 and Monterey's DUI is 65 and 80.

> Seller's Markets? -- Superheated Santa Clara County seller's markets are located in Santa Teresa, Blossom Valley, South San Jose, North Valley, Milpitas, East Valley, Santa Clara, Evergreen, Almaden Valley, Sunnyvale and Downtown San Jose. To refresh you, characteristics of a seller's market are shorter time on the market, fewer number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and a tendency towards price appreciation.

> Buyer's Markets? -- Far fewer than in the past, there are some buyer's markets located in Santa Clara County in Saratoga, Los Gatos and Los Gatos Mountains. To refresh you, characteristics of a buyer's market are longer time on the market, higher number of homes available for sale, lower probability of multiple offers or even an offer with most sale prices below list price. The tendency is to have price depreciation under this market condition.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI).

> Median prices. Up sharply since March but declined from $590,000 last month, it stands at $560,000 for Santa Clara County, $685,000 for San Mateo County. These are down 14% from the same month a year ago in each county. An entire county's median price level should not be used to decide on whether to buy or sell. I recommend your real estate advisor complete an analysis on a much smaller area (as small as a neighborhood!) to form the basis of a strategy.

> Tale of Two Markets -- Sales of affordable homes in Santa Clara County less than $450,000 level have gotten even hotter than the past few months. There are just 20 days of unsold inventory for single family residences below $450,000 and 39 for homes with prices from $450,000 to $600,000. As the price ranges increase, the DUI increases. For Santa Clara County, high-priced homes in the $2,500,000 to $5,000,000 range ended with a DUI of 359 or almost one year of inventory whereas in San Mateo County ended with a DUI of 222!

However, sales of higher-priced homes (above $1,000,000) are sluggish at best. For instance, we continue to have no sales of $5+ million homes in the last five weeks in Santa Clara County and just six in San Mateo County.

> Sellers Be Sooner -- I continue to maintain my recommendation for sellers of higher-priced homes that they should consider selling sooner and having an initially more-aggressive list price as the market usually softens when we go deeper into the late summer and into fall. In any case, check with a Realtor knowledgeable about the technical aspects of the market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market. .

For those considering a purchase of a home in an expensive area like Los Altos Hills, Los Gatos/Monte Sereno, Saratoga, your time is getting closer! Be ready but I think we'll see list prices reduced and sale prices dropping as we get closer to the holiday season this year.

> Investor's Corner -- Activity continues to trend upwards as more and more investors reenter the market. For Santa Clara County, there were 71 sales during the month with 40 of them in the less than $600,000 price range as that price range had a DUI of just 59 whereas the DUI for residential investment properties above $1,000,000 showed more than one and a half years supply at current sales demand.


Thanks for reading Tom McEvoy's Blog -- what are your thoughts, comments, questions, observations?

March Real Estate Market Highlights

Here are my observations of the recent market action in Santa Clara, Santa Cruz, San Mateo and Monterey counties. You are encouraged to leave your comments and questions. Feel free to update us on what you are witnessing in your neighborhood.

> Increased Sales or Is It? -- Santa Clara County had higher single family residence closings in December than in November because of the calendar. Since the first of the year, closings have dropped into the higher 500 area with January at 568 and February at 579. Now the media states that sales increased 35% over the last year but that number is deceiving as it blends both single family and condos. First, single family residence sales increased by 37% and condos and townhouses increased by only 30%. This is significant in that it blurs the major shift towards single family residences. Second, the increase, though appreciated by some real estate agents, came off the slowest month since 2001. And third, while we're on this, a much higher level of transactions failed to close escrow than before. For these transactions we call "TFT's" for transactions fallen through, this means that all the paperwork entering escrow in these didn't fly!

> Auctions may cost you more! Many folks think that working with a Realtor as their buyer's agent will cost them money out of their pocket. In actuality, buyer's agents are paid out of the seller's proceeds at close of escrow. The gross commissions earned by the buyer broker and agent do not add to the sales price. Auctions, on the other hand, advertise that they'll sell you a home at 40-50% under market. The homes they sell have NEVER sold at that higher price they compare to, so there is absolutely no comparison! Furthermore, to add insult to injury, many auction houses ADD their fees to the price paid by the buyer. This can be as much as 10% or more. What a deal!

Last year, I represented a buyer interested in bidding on a condo at an auction in San Mateo County. I made sure that my buyer wouldn't have to pay the auction house extra and that I might be able to earn a small fee representing her, of course, paid out of the seller's proceeds. With that cleared up front, she was successful in her bid and purchased the condo she wanted. By the way, my wife doesn't allow me to work for free! Something like "we've got two kids in college on the Mom & Dad Scholarship Program".

> Property tax reviews -- Santa Clara County Tax Assessor, Larry Stone, stated that about 200,000 parcels (single family, condos, townhouses, multi-unit residential) will be reviewed for possible adjustments in their fair market values for property tax purposes. Well, with about 432,000 parcels in the county, that's nearly 50%! The estimated amount of these parcels which will actually be reduced is about 50% or about 100,000. Last year about 44,000 properties were adjusted.

> Free is better than well, not free -- Who wouldn't want to obtain a property tax adjustment? But, why pay extra for something that is essentially free. The county charges a standard filing fee of $30. I'm reminding you that some firms are charging $179 for something that you can do for the county standard filing fee of $30! When you receive a card from the county tax assessor in a few months and think the assessment is too high, go to the Santa Clara County Tax Assessor's website. You can click on Assessment Appeals under Quicklinks to read how to apply, important dates for homeowners, etc. You must file during the open period to qualify otherwise it's tough luck.

> The median prices for single family residences in the affordable areas of Santa Clara County are now below that of the median prices for condos and townhouses in the moderate price areas. If you don't like to mow lawns, in my professional opinion, there are currently better deals in condos/townhouses. Case in point, I just closed a transaction where my buyers purchased a San Jose bank-owned or REO condo for $377,000 which was under the list price even after it had been reduced. This same three-year old condo sold brand new in 2006 for $565,000.

> Buyers wait for sellers to reduce list price. One of the indicators I follow constantly is the average sales price to list price ratio. This ratio, currently standing at 97.8%, means that the average transaction sells at only a 2.2% discount to list price. For the most part, buyers will wait until sellers adjust their list prices rather than put in ridiculous offers. High list prices, relative to the current market, on some homes are one big reason that some buyers wait, and wait, and wait!

> Median prices, revisited. The calculation of median prices used to be a reliable "read" of the market. Not so since the sub-prime loan problems hit during summer 2007. Before, market mix (percent of total for different price levels) didn't vary much. Now we have a much higher percentage of low-priced homes closing as a percent of total closings. But just for the record, the Santa Clara County single family residence median price in February 2008 was $785,000 whereas the median for February 2009 was $450,000, a decrease of 42.7%. This does not mean ALL homes went down this much! Median price is the middle transaction and represents the level of those that closed during the month.

> Another revisit? Can't sell your $5,000,000+ home? There have been NO sales of any homes in Santa Clara County priced above $5,000,000 reported through the MLS since early November! There are 34 of them on the market as of 3/11/09. In San Mateo County, one sale has taken place in the same price range. We'll see if it closes escrow!

> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price now stands at 33.0%. This means that one out of three sellers received more than their asking price. Oh, and 7.5% of sellers received exactly list price.

> What happened, Foster City? -- With 57 homes available to sell and only two sold during February that means the calculation of days of unsold inventory (DUI) exploded to 998! This means that it would take 998 days to sell the existing inventory in Foster City. The calculation is theoretical but it tells me there's no demand from buyers. This could change quickly but if it doesn't, I see lower prices ahead.

> Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 26 closings in February. Tougher lender requirements have contributed to this situation and probably can't leave out the stock market, too! I look at activity in this arena as it is an indicator of investor confidence in the future.

> Go, Monterey, go! Monterey County continues to see more closings than San Mateo County. Most of the transactions in Monterey County are bank-owned or REO's after a flurry of affordable home building in the county a few years ago caused a tremendous over-supply. This has not occurred in Santa Clara, Santa Cruz or San Mateo counties. For Monterey County, the days of unsold inventory (DUI) stands at 89, close to the level we can start to see price appreciation. Shock! Actually, the price levels below $450,000 have already reached the point where we can see price appreciation with a DUI reading of 54! Multiple offers are common for homes priced in this range with final sales prices often going above the list price. Double shock!

Thanks for reading -- what are your thoughts?

To Stage... or Not to Stage

That is a question that many sellers will ask. After reviewing television shows that tout that staging can make all the difference, they believe that this is always the way to go. But, here are a few thoughts I want to share with you on the topic.

A furnished house can be cleaned, de-cluttered and “spruced up” with plants, new matching towels, a few well-placed accessories, etc. Similarly, curb appeal can be made more attractive adding a few new flowering plants, mulch over dirt areas, and even a color bowl and new door mat on the front porch after, of course, taking care of the yard by trimming trees and bushes, mowing and edging the lawn, and yes, even power-washing the walkway and driveway to remove dirt, stains and moss.

An empty house is not very appealing to anyone unless a person has great visualization skills and can picture their belongings placed in the home. This is where staging can be helpful. However, it is not cost effective to stage every empty home. Staging may make sense for larger, more expensive homes because they can be filled with furniture and accessories without making it look too crowded. I’ve observed that smaller homes and condos that are staged are frequently done so with smaller furniture pieces, smaller beds as well as fewer pieces of it. These situations look like people would not or could not live with only the furniture used in staging (smaller beds, downsized hard-case furniture like small desks, dressers and the like). An experienced agent will point this out to their buyers and ask them to visualize their furnishings in the space. I suggest to my buyer clients that they even measure room sizes to make sure they’re not committing themselves to a major replacement of furniture for their new home.

As an advisor, it comes down to return – whether or not the projected increase in selling price will at least offset the cost of the staging. It makes more sense to either stage or partially stage a more expense home or condo than sinking some big bucks in a lower priced home. I’ve seen many homes where the amount of staging was “over the top” and cost would have, in my opinion, been a waste.

While partial or full staging can be quite expensive, I offer my clients a sensible, complimentary way to take the edge off of their empty home and that is to accessorize key areas: kitchen, baths, fireplace mantel, etc. This, in addition to a thorough cleaning, can help to make an appealing difference and help prospective buyers project themselves into the home. Conversely, accessorizing a large home is meaningless as the house just overwhelms the accessories and the accessories are lost in the space.

If you are thinking of selling and have not made a decision to work with a certain agent and would like an assessment of what things are necessary to prep the home for the market, please give me a call. I’ll arrange to stop by and offer my suggestions and advice on a complimentary basis. If we later end up working together, that’s fine. If not, that’s OK too because either way, you’ll end up with information that will help you sell your home faster.

To illustrate some of my concepts, I have included before and after photos of a master bath in a Gilroy townhouse that I sold last year.


Thanks for reading!