Pending Home Sales Are Increasing in San Jose and Silicon Valley
Last month we heard that residential real estate sales were off about 25% nationwide year over year (closed sales) and it was just as bad for home sales in San Jose (statistics show that sales were off 34.8% for closed sales of houses but up 5% for pending sales) and in Silicon Valley generally (closed house sales in Santa Clara County down 28.5% and pending sales up 5.3%). Pending sales were up around 10% month over month.
Houses in Silicon Valley are Selling Faster and Faster
Pending house sales are on the rise and it’s now dramatic. At first I thought it was just me: in the last 30 days, I’ve put five sales together of houses and townhouses (one in Livermore, one in Foster City, one in Campbell and two in San Jose – both in the Almaden Winery neighborhood on the Cambrian/Almaden border). But it’s not just this faithful blogger who’s seeing a surge in selling activity and accepted offers. These are clearly trends in the local south bay market.
I just spent a little time on MLSListings.com and checked the numbers of newly pending sales in the city of San Jose:
- Nov 1 to Nov 7, 2010: 159 new pending sales in San Jose
- Nov 8 to Nov 14, 2010: 163 new pending sales in San Jose
- Nov 15 to Nov 21, 2010: 198 new under contract or pending sales in San Jose
If I check sales from 11-1-2010 through 11-22-2010 there were 566 this year but just 386 for the same period last year in San Jose.
Ditto that for all of Santa Clara County: from Nov 1 – 22, 2009 there were 666 pending sales but Nov 1 – 22, 2010 it was 954!
What’s the cause of all this? Most likely it’s the incredibly low interest rates, which are scraping the bottom and are at about 60 year lows. My mortgage broker and mortgage banker friends are insanely busy with sales and refinances.
And what does this mean for you, a home buyer or seller in Silicon Valley? A couple of things:
Silicon Valley Home Sellers: often people pull their homes off the market between Thanksgiving and the New Year or wait until after the holidays to put their home on the market. This year, perhaps you want to rethink that strategy. Homes that have been “just sitting” on the market are in some cases now seeing multiple offers. I have seen this in my own practice.
Silicon Valley Home Buyers: you may not be able to get away with “low balling” homes even if they’ve been on the market awhile because many other buyers who have been watching the market are now jumping in with both feet. Study the comps and write a realistic offer if you want the home!
Tags: Real estate, selling, silicon valley, Silicon Valley real estate, statistics, trends
November 24th, 2010 at 8:16 am
Hi Mary,
Do you find many foreclosures in your area? I assume they go quickly if they are in good condition. Also, are there any stats on homes that are foreclosures and homes in the 400k to 600k range on a monthly or weekly basis? Do you handle foreclosures? We are trying to decide where to live in California and what we can afford. We can afford more than 600k, but wonder how long that home would take to sell if we wanted to downsize in 10 years.Are condos selling more quickly than homes? (In Columbia, MO it is hard to get financing on condos even if the buyers qualify themselves).
Thanks so much!
Cheri
November 25th, 2010 at 8:55 am
Hi Cheri,
Yes, we have plenty of foreclosures here (probably about 10% of the available inventory). For homes priced between $400,000 and $600,000 in Santa Clara County, as of this moment there are 101 bank owned homes for sale, 89 REOs which are sale pending or under contract and 59 which have sold and closed in the last month. Of those solds, the average days on market was 69 but you are correct that the good ones do go much faster than that. I was in contract on one last week in Campbell (inspections were bad so my buyer wisely backed out) and it had 4 offers within about a week of being on the MLS.
You can get a very decent home for under $600k in the San Jose area but as with all REOs, you just won’t know if you really want it until you have spent perhaps a thousand dollars to inspect it….
The condo market is not nearly as strong as the market for houses.
Thanks for asking! Let me know if you want more info.
December 6th, 2010 at 8:33 am
Thanks, Mary .I didn’t realize I had to go back to your blog page to get a reply. It sounds as if we will have a fighting chance to get a home,at least a week to make a decision and some cash to give us an edge… unless most people pay cash. Investors like to pay cash and usually come in and grab small homes and condos (at least here in Columbia) very quickly.Your inspections sound expensive for $1,000. That must include multiple parts:house, fireplace, sewer or lagoon, and a specialty like furnace. Surveys are always done separately here.
What do you call a decent home?I think we want 2,000 sq.ft.,and the usual 3 bedrooms and 2 baths in a nice neighborhood.Are bank owned homes any better there than regular MLS homes on the market? They should be slightly less expensive.
December 9th, 2010 at 9:14 am
Hi Cheri,
The kind of pricing I was suggesting is for a smaller home (perhaps 1300-1500 square feet). Yes, inspections are usually in parts:
a home inspection will usually run around $500 (price is based on size and age of home as well as type – a condo will be less than an old house), a termite/pest inspection will be around $275, a roof inspection around $100 and a chimney inspection another $100. We don’t normal do surveying. Most homes are on sewer, not septic (and I am not sure what you mean about a lagoon – here that’s a type of lake that empties into the ocean or bay – we do not have many properties anywhere near a lagoon).
Bank owned homes are often about 10% less than regular houses (but not always). It really depends. If it’s in turnkey condition and in a great area, it will be highly desired and will go much closer to a normal price.
A 2000 SF house in a good area will likely cost more than $700,000 and probably a good budget is closer to $900,000 if it’s to be fully remodeled etc. A few years ago it would have been $1 mil.
Mary