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?
Wednesday, March 11, 2009
Friday, February 13, 2009
World class chocolates in the Valley of Hearts Delight
You've made dinner reservations at a romantic restaurant (I did at Pezzella's Italian Restaurant in Sunnyvale, CA) and you might have picked up a little something for her at her favorite store (I did that too. How about a beautiful orchid plant.) but then there's always sweets for your sweets for Valentine's Day.
Here are some world class chocolatiers from Silicon Valley to Santa Cruz:
Chocolate Dream Box
39 N. Santa Cruz Avenue, Los Gatos. 408-354-3574
Pictured are selected handmade chocolates from Fleur de Cocoa
Saratoga Chocolates
Schurra's Fine Confections
Shokolaat
Pictured is Dark Chocolate Ganache Truffle from Sugar Butter Flour
Testarossa Vineyards
Why mention a winery? Because they're hosting a wine and chocolate pairing event on Saturday, February 14th from 11:00am to 4:00pm. Five of their award-winning wines will be paired with delectable chocolates. Nominal tasting cost is refunded upon a purchase of Testarossa wines. They're located in the historic Novitiate Winery in Los Gatos. It happens to be the oldest continuously operated winery in the Bay Area dating from 1888. And, I just happen to own a bottle of Novitiate Cabernet from about 1970!
Happy Valentine's Day!
Thanks for reading! What do you do for Valentine's Day?
Here are some world class chocolatiers from Silicon Valley to Santa Cruz:
Chocolate Dream Box
- 710 Blossom Hill Road, Los Gatos. 408-356-2626
Fleur e Cocoa Patisserie Chocolaterie
39 N. Santa Cruz Avenue, Los Gatos. 408-354-3574
Pictured are selected handmade chocolates from Fleur de Cocoa
- 1509 Mission Street, Santa Cruz. 888-685-1871
Saratoga Chocolates
- 14572-B Big Basin Way, Saratoga. 408-872-1431
Schurra's Fine Confections
Shokolaat
- 516 University Avenue, Palo Alto. 650-289-0719
- 669 S. Bernardo Avenue, Sunnyvale. 408-732-8597
Pictured is Dark Chocolate Ganache Truffle from Sugar Butter Flour
Testarossa Vineyards
Why mention a winery? Because they're hosting a wine and chocolate pairing event on Saturday, February 14th from 11:00am to 4:00pm. Five of their award-winning wines will be paired with delectable chocolates. Nominal tasting cost is refunded upon a purchase of Testarossa wines. They're located in the historic Novitiate Winery in Los Gatos. It happens to be the oldest continuously operated winery in the Bay Area dating from 1888. And, I just happen to own a bottle of Novitiate Cabernet from about 1970!
Happy Valentine's Day!
Thanks for reading! What do you do for Valentine's Day?
Thursday, February 12, 2009
February 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 or even update us on what you are witnessing in your neighborhood.
> Blame it on November -- Remember I said last month that "The market activity is turning around." There is a theory that we experienced higher closings in December because of the calendar. In looking at November, we didn't have any time to close transactions after Thanksgiving Day as county workers are still stuffed after the holiday. Whereas, there was a full week after Thanksgiving Day 2007. Everybody knows that Thanksgiving Day falls on the fourth Thursday of the month, right?
Can we also blame the calendar for less Christmas and Holiday sales? Maybe. Just think of this. In 2007, there were 32 days between Thanksgiving Day and Christmas. Last year, there were only 27! That's more than 15% fewer selling days.
> Sucked in by the touts you've heard that you can make a killing in real estate by buying property 40-50% under market? There are free seminars you can attend that "teach" you to do this. The catch -- you'll have to sign up for their $3,000 course because, of course, there's too much to provide you in the seminar. Folks, prices have already adjusted in many areas by 40% or more from their recent highs. What a willing, able buyer pays IS the market price!
> Want a property tax adjustment? Well, who doesn't! But, hold the phone. There are now firms that will charge you a fee of up to $179 for something that you can do for the county standard filing fee of $30! Santa Clara County is one of only a few counties out of 58 in California that are proactive when it comes to adjusting fair market values so they make the property tax rolls as accurate as possible. You'll receive a card from the county in a few months and if you 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.
> Closings of condos and townhouses continue to take a beating due to the improved affordability (read -- lower prices) of single family residences. January saw increased closings of single family residences of 68% over the same month a year ago. Condo and townhouse closings were up a mere 7%. If you don't like to mow lawns, in my professional opinion, there are currently better deals in condos/townhouses.
> 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 98.7%, means that the average transaction sells at only a 1.3% discount to list price. 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!
> Market mix plays with median prices, revisited. As we said last month, market mix has helped to bring down median prices due to more low-priced homes closing as a percent of total closings. For instance, closings in East, Central and South San Jose (the more affordable areas in Santa Clara County) made up 12% of the total a year ago compared to 32% in January 2008. What would have occurred if we were to adjust for this significant change in mix? Well, the median price would have decreased about $200,000 due to this factor alone and real price depreciation would have accounted for the other $100,000 of the decrease. For the record, the median price in January 2008 was $743,500 whereas the median for January 2009 was $450,000.
> Another revisit? Can't sell your $5,000,000+ home? With the risk of bringing up another point raised last month, there have been no sales of any homes above $5,000,000 in now over nine weeks! There are 35 of them on the market as of 2/11/09, up from 27 the month before.
> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price increases again and now stands at 37.4%. This means that more than one out of three sellers received more than their asking price. Oh, and 8.3% of sellers received list price.
> Record of sorts. Homes that closed in January had a median days on market (DOM) figure of 67, a record high. Compare that to those that were available to purchase having a median DOM of 100! This means that homes priced aggressively, well, sell.
> Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 20 closings in January. Tougher lender requirements have contributed to this situation and probably can't leave out the stock market, too!
> Go, Monterey, go! Monterey County has seen way more closings than San Mateo County and again set another record high. 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. Still, this means that there are buyers, buyers with money and buyers with money who can get loans!
Thanks for reading -- what are your thoughts?
> Blame it on November -- Remember I said last month that "The market activity is turning around." There is a theory that we experienced higher closings in December because of the calendar. In looking at November, we didn't have any time to close transactions after Thanksgiving Day as county workers are still stuffed after the holiday. Whereas, there was a full week after Thanksgiving Day 2007. Everybody knows that Thanksgiving Day falls on the fourth Thursday of the month, right?
Can we also blame the calendar for less Christmas and Holiday sales? Maybe. Just think of this. In 2007, there were 32 days between Thanksgiving Day and Christmas. Last year, there were only 27! That's more than 15% fewer selling days.
> Sucked in by the touts you've heard that you can make a killing in real estate by buying property 40-50% under market? There are free seminars you can attend that "teach" you to do this. The catch -- you'll have to sign up for their $3,000 course because, of course, there's too much to provide you in the seminar. Folks, prices have already adjusted in many areas by 40% or more from their recent highs. What a willing, able buyer pays IS the market price!
> Want a property tax adjustment? Well, who doesn't! But, hold the phone. There are now firms that will charge you a fee of up to $179 for something that you can do for the county standard filing fee of $30! Santa Clara County is one of only a few counties out of 58 in California that are proactive when it comes to adjusting fair market values so they make the property tax rolls as accurate as possible. You'll receive a card from the county in a few months and if you 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.
> Closings of condos and townhouses continue to take a beating due to the improved affordability (read -- lower prices) of single family residences. January saw increased closings of single family residences of 68% over the same month a year ago. Condo and townhouse closings were up a mere 7%. If you don't like to mow lawns, in my professional opinion, there are currently better deals in condos/townhouses.
> 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 98.7%, means that the average transaction sells at only a 1.3% discount to list price. 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!
> Market mix plays with median prices, revisited. As we said last month, market mix has helped to bring down median prices due to more low-priced homes closing as a percent of total closings. For instance, closings in East, Central and South San Jose (the more affordable areas in Santa Clara County) made up 12% of the total a year ago compared to 32% in January 2008. What would have occurred if we were to adjust for this significant change in mix? Well, the median price would have decreased about $200,000 due to this factor alone and real price depreciation would have accounted for the other $100,000 of the decrease. For the record, the median price in January 2008 was $743,500 whereas the median for January 2009 was $450,000.
> Another revisit? Can't sell your $5,000,000+ home? With the risk of bringing up another point raised last month, there have been no sales of any homes above $5,000,000 in now over nine weeks! There are 35 of them on the market as of 2/11/09, up from 27 the month before.
> Want to sell with multiple offers? The percent of completed sales or closings with a sold price greater than list price increases again and now stands at 37.4%. This means that more than one out of three sellers received more than their asking price. Oh, and 8.3% of sellers received list price.
> Record of sorts. Homes that closed in January had a median days on market (DOM) figure of 67, a record high. Compare that to those that were available to purchase having a median DOM of 100! This means that homes priced aggressively, well, sell.
> Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 20 closings in January. Tougher lender requirements have contributed to this situation and probably can't leave out the stock market, too!
> Go, Monterey, go! Monterey County has seen way more closings than San Mateo County and again set another record high. 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. Still, this means that there are buyers, buyers with money and buyers with money who can get loans!
Thanks for reading -- what are your thoughts?
Saturday, February 7, 2009
Client Appreciation Dinner Party - 2009
This past week, I held my annual, private Client Appreciation Dinner Party. To be invited to the party, invitees must have either referred me to a prospective client (closed transaction or not) or have been a recent client that I represented on a purchase or sale that closed escrow. So, you too, can be invited by referring someone you care about for expert advice on the purchase or sale of residential or commercial real estate.
As in the past, we had a dinner party at Midori Japanese Restaurant (1066 E. El Camino Real, Sunnyvale, CA 94087; 408-985-1000) in Sunnyvale. The manager of the restaurant, Jeff, made sure we wouldn't go about disturbing other patrons and specially-reserved their tatami room. Food was excellent and included a selection of tasty sushi and sashimi appetizers, soup, salad with miso dressing, a wide variety of entree combinations, dessert and beverages (including adult beverages). Nobody went away hungry!
Each invitee was allowed to bring an adult guest and received a gift bag with a wonderful bottle of Beaulieu Vineyards BV Cabernet Sauvignon wine, bag of chocolate truffles from Harry and David's and a gift card to use on their next visit to Elephant Bar Restaurant (19780 Stevens Creek Blvd., Cupertino, CA 95014; 408-865-0701). Each invitee was eligible for drawings of wonderful gifts from Crate & Barrel that were specially chosen and wrapped by my lovely wife, Carol.
Some of the invitees were attending their second or even third Client Appreciation Party!
The variety of invitees ran the gamut from first time home buyers to those referring prospective clients and came from as far away as San Ramon and included such occupations as a financial planning firm officer, acupuncturist, in-home design consultant, sales executive, telecommunications technician, attorney, wholesale merchandiser, window and door company general manager, educational counselor along with my sons, David and Kevin and wife, Carol, COO - Chief Organizing Officer. There were multiple conversations going on up and down the table on a variety of topics.
Oh, I almost forgot! Everybody had FUN! I know this because absolutely nobody complained!
I can't wait to have another Client Appreciation Party because I get to thank some of those that are the heart of my business. And, getting close to Valentine's Day, it makes perfect sense!
Thanks for reading!
Tuesday, January 27, 2009
Got Granite? Got Radon?
Just in time for January, I learn that this month is Radon Action Month. Governor Schwarzenegger has urged all Californians to test their home for radon gas. Why this month? The coldest months, when people keep their homes buttoned up, are when indoor radon concentrations are highest. Here in Santa Clara County, we have a county-wide average of "moderate" levels of radon but they can vary tremendously by area and depending upon the types of granite counter tops that may be in the home.
Low cost radon test kits are available from the California Department of Health.
Non-scientifically, most radon is emitted from the soil under a home. However, some granite counter tops emit substantial radon and gamma radiation. Red granite seems to be a culprit but testing in the only way to make sure.
For an Industrial Hygienist resource, check out Indoor Air Answers. An industrial hygienist can quickly determine whether granite is radioactive and likely the source of the radon.
For home test kits, you can expect results in a couple of weeks.
Free testing? Yes, there is but for only certain types of granite (Jupurana Bordeaux, Niagara Gold, Four Seasons granite). If you have one of these types of granite, the Free Testing resource can be used.
Hope this helps. Let me know what your thoughts are. Thanks for reading!
Low cost radon test kits are available from the California Department of Health.
Non-scientifically, most radon is emitted from the soil under a home. However, some granite counter tops emit substantial radon and gamma radiation. Red granite seems to be a culprit but testing in the only way to make sure.
For an Industrial Hygienist resource, check out Indoor Air Answers. An industrial hygienist can quickly determine whether granite is radioactive and likely the source of the radon.
For home test kits, you can expect results in a couple of weeks.
Free testing? Yes, there is but for only certain types of granite (Jupurana Bordeaux, Niagara Gold, Four Seasons granite). If you have one of these types of granite, the Free Testing resource can be used.
Hope this helps. Let me know what your thoughts are. Thanks for reading!
Tuesday, January 20, 2009
Real Eats -- La Paloma Restaurante, Santa Clara, CA
Have you ever wondered why you gravitate back to certain restaurants? Well, that's just what happened last weekend when my wife and I were hungry for La Paloma in Santa Clara. Patrons for more than 25 years, we enjoy the good value, authenticity as well as the great taste.
We usually start off with a simple side salad instead of appetizers as their chips and salsa are very good! Next -- what to have for dinner?
Since we're eating lighter, we opted for fish. My wife chose the Grilled Salmon Filet off of their regular menu. At $13.50, it included a fresh salmon filet that was char-grilled and served with your choice of our tangy tomatillo avocado salsa, or topped with their fresh mango salsa. Carol chose the mango salsa which she said was excellent. The dinner also included grilled garden vegetables, rice, and jalapeño tartar sauce.
For my dinner, I ordered the Char-grilled Red Snapper off of their specials menu. It too was $13.50, and was served over a tomatillo-avocado salsa and came with rice and beans which I asked to switch the beans with grilled garden veggies. The fish was perfectly flaked done and tasted wonderfully with the salsa and accompaniments. I chose one of their margaritas to top off the dinner. The margarita, I prefer them frozen and with salt, tasted great and was of great value.
Dessert -- who has room for any dessert? We passed on dessert as the dinner with the salad, chips and salsa was more than ample! Highly recommended.
La Paloma Restaurante
2280 El Camino Real
Santa Clara, CA 95050
(408) 247-0990
If you'd like to enjoy great food and service at fine restaurants and obtain a discount in the process, please give me a call and I'll let you know how you can get a complimentary Passport Unlimited card.
I encourage you to leave a comment. Be sure to mention what your favorite restaurants are. Thanks for reading!
Monday, January 19, 2009
January Real Estate Market Tidbits
As a kind of executive summary of my observations of the recent market action in Santa Clara County, I've assembled a list of tidbits for you. I encourage you to make comments, ask questions or even update us on what you are witnessing in your neighborhood.
> The market activity is turning around. Closings in December was higher than November, something that hasn't happened since 2001. Could this be an early sign of a bottom in this market? We'll see.
> Sell thrice, close once! With all the bank-owned and short sale homes on the market, most of them are in the lower-price ranges. Many of these homes sell multiple times but only close once! This is due to issues with either the property or the buyer's financial readiness or loan situation.
> Condos and townhouses sales volume continues to take a beating due to the improved affordability (read -- lower prices) of single family residences.
> Inventory back up. The inventory of available single family residences started upwards on January 3, 2009. All-time high levels were reached last April and after a couple of blips upwards in September and October, the trend has been lower until now. Sellers take note -- 2009 likely will be another soft year. Sellers will need to sell sooner this year and be more aggressively-priced to avoid a home languishing on the market.
> Market mix plays with median prices. Market mix is bringing down median due to more low-priced homes selling as a percent of total sales volume. Remember, we had just the opposite situation a couple of years ago with high-priced homes selling and few lower-priced homes when the sub-prime loan issues hit in the Summer of 2007. You want proof? Try this: the median prices for the 10th percentile dropped 45% while the median (50th percentile) has dropped 36% and the 90th percentile has dropped only 27%. For additional information on this, please click on my recent post on this topic Beware the Median Price Deception.
> Can't sell your $5,000,000+ home? There have been no sales of any homes above $5,000,000 in over five weeks!
> Want to sell with multiple offers? The percent of completed sales with a sold price greater than list price stands at 35% which means that more than one out of three sellers receive more than their asking price. This is attributable to sellers aggressively pricing their home in a slowing market.
> Homes that closed in December had a median days on market (DOM) of 55. Those that stayed on the market had a median DOM of almost double -- 106! This is a bigger disparancy than before as homes priced aggressively sell.
> Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 29 closings in December, far lower than the record monthly closings of 94 a couple of years ago. Tougher lender requirements have contributed to this situation and probably can't leave out the stock market, too!
> Go, Monterey, go! Monterey County has seen more closings than San Mateo County and are at record highs. 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 a more detailed analysis of the market, please click on my January Silicon Valley Real Estate Market Update.
Thanks for reading -- what are your thoughts?
> The market activity is turning around. Closings in December was higher than November, something that hasn't happened since 2001. Could this be an early sign of a bottom in this market? We'll see.
> Sell thrice, close once! With all the bank-owned and short sale homes on the market, most of them are in the lower-price ranges. Many of these homes sell multiple times but only close once! This is due to issues with either the property or the buyer's financial readiness or loan situation.
> Condos and townhouses sales volume continues to take a beating due to the improved affordability (read -- lower prices) of single family residences.
> Inventory back up. The inventory of available single family residences started upwards on January 3, 2009. All-time high levels were reached last April and after a couple of blips upwards in September and October, the trend has been lower until now. Sellers take note -- 2009 likely will be another soft year. Sellers will need to sell sooner this year and be more aggressively-priced to avoid a home languishing on the market.
> Market mix plays with median prices. Market mix is bringing down median due to more low-priced homes selling as a percent of total sales volume. Remember, we had just the opposite situation a couple of years ago with high-priced homes selling and few lower-priced homes when the sub-prime loan issues hit in the Summer of 2007. You want proof? Try this: the median prices for the 10th percentile dropped 45% while the median (50th percentile) has dropped 36% and the 90th percentile has dropped only 27%. For additional information on this, please click on my recent post on this topic Beware the Median Price Deception.
> Can't sell your $5,000,000+ home? There have been no sales of any homes above $5,000,000 in over five weeks!
> Want to sell with multiple offers? The percent of completed sales with a sold price greater than list price stands at 35% which means that more than one out of three sellers receive more than their asking price. This is attributable to sellers aggressively pricing their home in a slowing market.
> Homes that closed in December had a median days on market (DOM) of 55. Those that stayed on the market had a median DOM of almost double -- 106! This is a bigger disparancy than before as homes priced aggressively sell.
> Investors, where are the investors? Multi-unit investor marketplace has had very few transactions with only 29 closings in December, far lower than the record monthly closings of 94 a couple of years ago. Tougher lender requirements have contributed to this situation and probably can't leave out the stock market, too!
> Go, Monterey, go! Monterey County has seen more closings than San Mateo County and are at record highs. 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 a more detailed analysis of the market, please click on my January Silicon Valley Real Estate Market Update.
Thanks for reading -- what are your thoughts?
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