Today I spent a little time gathering the month over month and year over year median sales price changes in Sunnyvale from my Santa Clara County ReReport (you can do it too, it just takes time). Sunnyvale has felt like a bubble in that the appreciation has been too steep, too long for it to be sustainable.
Is it a bubble? The market is calming down or leveling out a bit in many places – but how about Sunnyvale?. Jobs are strong. Many firms are hiring. There remains a housing shortage. But the rate of appreciation has been crazy high. Rather than speculate about how good (sellers) or bad (buyers) it is, let’s see how strong the change has been.
The image below shows the increase or decrease of the median sales price for single family homes in Sunnyvale, first month over month, and then year over year from May 2011 to May 2013. The the last 12 months, the year over year average change to the median sales price has been a whopping 22%. One month it was 60%! (It was when that was happening that I screamed “bubble” on this blog.)
Clearly, these numbers hint that things are a little out of whack. But the median sales price isn’t the whole story. Let’s look at the median sale price to list price ratio and also the days to sell for this same city and timeframe. This info I pulled from MLSListings.com.
We are hearing about things calming down, but June closings (reflected in the last green bar on the right) are averaging 10 days to sell. (It’s like the limbo dance. How low can it go?) But a word of caution – please remember that these June closings were sales in May. By the time we see it, it’s old news. So perhaps the slowdown or leveling out we hear about anecdotally now will show up only in July’s numbers.
Back to the comparison and whether or not this is a bubble – during the 2007 peak, the lowest days to sell were 17 (in May, June, and Aug 2007); now the lowest is 10 and 11 days. The highest sale price to list price ratio at the 2007 peak was 104.6% in April 2007. Now we’re looking at 112%. Are these reasons to be concerned? Absolutely.
Finally, what about the actual cost of purchasing a 3 – 4 bedroom house in Sunnyvale? To check the year over year appreciation, I ran the numbers on MLSListings for homes with this criteria:
1500-2500 square feet
Sold (closed escrow) in May 2013 and May 2012
Here’s how they stacked up:
|Days on Market||29||8|
|Price per SF||$517.34||$618.35|
|Av Lot Size||6726||6621|
|Av List Price||$908,547||$991,842|
|Av Sale Price||$959,951||$1,130,287|
Perhaps the easiest way of discussing what’s happened is to focus on the real cost of purchasing (though of course it’s always price and terms, and we don’t have data on terms such as free rent backs). The same type of 3-4 bedroom house cost an average of $959,951 in May 2012 and jumped to $1,130,287 by May 2013. That’s a difference of $170,336 or an 18% increase in home prices. (By comparison, the year over year median was up 18.6% for all houses in Sunnyvale and the year over year rise for the average sales price was up 27.3%.) Different schools and price points will have different results. But to have the cost of a house vault upwards by 18% is really staggering.
Viewed another way, what was lost in that same year was the lion’s share of the down payment. Many people got priced out of the market because the money they saved was essentially overwhelmed by the steep appreciation.
$998,000 : 611 Lakehaven TER, SUNNYVALE2 beds, 2 baths
$1,490,000 : 855 Maria LN, SUNNYVALE3 beds, 3 baths
$1,188,800 : 315 Stowell AVE, SUNNYVALE2 beds, 1 bath
$928,000 : 1098 Michelangelo DR, SUNNYVALE2 beds, 1 bath
$949,900 : 250 Santa Fe TER 308, SUNNYVALE2 beds, 2 baths
$898,000 : 990 Alpine TER 2, SUNNYVALE2 beds, 2 baths
$1,399,000 : 144 Holly TER, SUNNYVALE3 beds, 3 baths
$1,788,000 : 1636 Waxwing AVE, SUNNYVALE3 beds, 2 baths
$339,900 : 1220 Vienna 714, SUNNYVALE3 beds, 2 baths
$1,350,000 : 965 Lakebird DR, SUNNYVALE6 beds, 4 baths
See all Real estate in the city of Sunnyvale.
(all data current as of 6/17/2018)
Listing information deemed reliable but not guaranteed. Read full disclaimer.