Hearing the real estate market “war stories” about dozens of offers on Silicon Valley properties and overbids ranging from 20 – 55% has convinced me that this is a bubble. At least, this is what a bubble looks like, sounds like, feels like, and acts like. Maybe I’m wrong. Maybe it’s not a bubble. But would I buy property with these conditions? I don’t think so – it would depend on the home, the area, the price point and the level of interest it was generating. Overall, though, when the market is this hot, I get worried that emotions are running the show and common sense has been lost in the dust.
What do the numbers say? I just logged into MLSListings.com and see that right now, in all of Santa Clara County there are 760 single family homes (houses & duet homes) for sale which are truly available and not sale pending or under contract. In the last 30 days, 542 single family homes have sold. That’s 1.4 months of inventory – a red hot seller’s market. In San Mateo County it’s just slightly cooler with 426 for sale and 238 sold in the last 30 days, resulting in 1.8 months of inventory.
It is even worse in the lower price points. For houses/duets listed at $600,000 or less, in SCC the months of inventory is .64 or about 2 1/2 weeks (149 listed, 232 sold/closed in last 30 days). For SMC, it’s about the same, .69 of one month (67 listed now, 97 sold/closed in last 30 days). Less than a month of inventory – a balanced market is 5 or 6 months! Homes are selling faster than new ones are coming onto the market!
It’s one thing to say that one city, town, or school district has a very low months of inventory (or high absorption rate). It is another altogether to say an entire county is that low. This is a major trend, not a tiny blip in the statistics.
How soon we forget that after the outrageously deep seller’s market in 2000, we had a steep drop in 2001. Or that all the crazy buying in the San Jose area (and other places) in 2005-06 lead to the crash of 2007-2009. Continue reading
An extremely popular and consistently desired Los Gatos neighborhood is Blossom Manor, sometimes called The Manor or even Blossom Hill Manor, which is highly regarded for pleasant, curving streets, close proximity to shops and stores, and the prized Los Gatos Schools. Today I spent quite a bit of time on my multiple listing service website, MLSListings.com, to pull the numbers on this lovely area and see what the trends and appreciation look like. I was wondering how the numbers looked at the peak and the trough of the price rollback, whether or not the area has recovered or is close to peak pricing. For the most part, I looked at all of the houses included in the map area, but also took a secondary study of homes just between 2000 and 3000 sf, since some home buyers seek larger square footage.
Please click on the chart below for the historical statistics, by year, for the Blossom Manor neighborhood – it will open into a new window and become a little more than 50% larger. It reflects all homes sold, by year, in the Manor from 1998-2012 (averages, medians, as well as some minimum and maximum price info for each year combined). For this area, the peak of the market, meaning highest sales prices, was in 2007 but both 2006 and 2008 were very close generally, so it was a fairly broad peak. However, the same is not true for the bottom of the market for this same group. Instead, there was one very clear low year – 2009. After that, we see a recovery underway.
Something interesting to note is the increasing size of the houses. The first four years (1998-2001), the average square footage of homes sold was 1778. The most recent 4 years, it’s 2105, a 327 square foot difference, or 18% more than about 11-15 years ago. We see a lot of remodeling and additions, so this is in keeping with what locals would expect – and it’s a trend that is likely to continue. Why does this matter? Upside potential for expansion.
What about homes that are already larger, only those between 2000 and 3000 SF? (There are only a few bigger than 3000 SF in this neighborhood.) Continue reading
A common buyer question right now is whether or not the real estate market in Silicon Valley is overheated, if we are experiencing “another bubble”. If you visit open houses in places like Sunnyvale, Cupertino, and in many parts of the Peninsula, you may see droves of buyers and be convinced that the market is, in fact, overheated.
Silicon Valley encompasses a large area, primarily Santa Clara County and some of San Mateo County, but a few sections of neighboring counties as well. Generalizing about huge regions is tricky. Overall, though, it is a deep seller’s market throughout Silicon Valley. But there is a great deal of variation from one city or town to the next, as well as between ages of homes, quality of schools and neighborhoods, and price point. Today we will focus primarily on a couple of statistics: the ratio of sales price to list price for houses in San Mateo and Santa Clara Counties, and ratio of new listings to sold and closed ones of houses in these counties.
First, though, a look at the two counties combined to show the broadest common real estate trends for Silicon Valley in relation to the sales price to list price ratio and “days to sell”.
The chart above gives a snapshot of the Silicon Valley market, which appears to have had a peak in about October – November 2012. likely reflecting sales 45-60 days earlier, when the days to sell hit a yearlong low. Since that time, though, things appear to have calmed down.
New listings of houses for sale versus sold homes in San Mateo and Santa Clara Counties
A few days ago, before getting the stats for closed sales in January 2013, I wrote about the trends for new listings of houses in relation to the closed sales in Santa Clara County in late fall 2012. What we were seeing was that homes in escrow were closing or finalizing the sales faster than new inventory was coming on the market. The closings in January, though,reflecting sales which began in December, a trend reversal, back to a more normal ratio, in both Santa Clara County and San Mateo County. December is often the softest month of the year, with few listings relative to the rest of the year and sales at lower price points. Looks like this December followed that pattern to a point. Have a look at the charts for both counties and notice the trend reversal, below.
Many of the statistics quoted by news agencies and real estate information analysts refer to the “active” inventory as not just the homes which are truly available, but also those which are sale pending but with contingencies still in place (whether huge contingencies, such as bank approval on a short sale or the normal ones, such as property inspection and loan approval). This often results in a more bloated look at what’s available than what is really the case, and it gives buyers the sense that it’s easier to purchase than it truly is. Let’s look at some statistics to see what’s happening over the last year, when it shifted from being a buyer’s market to a severe seller’s market for houses in Santa Clara County.
Normally there are more homes available (for sale, without a “sale pending” status attached) than there are closed sales each month. But right now, the available properties are being gobbled up much faster than new ones are getting put onto the multiple listing. Let’s view the graph to see the relationship between these two figures for houses listed and sold in Santa Clara County in 2012.
At the beginning of 2012, please note that the new listings (the red line) outpaced the sold and closed properties (green line). The delta between them shrinks over the course of the year, until in the fall they are nearly equal until closed sales far outstrip new listings. That is a complete flip in the market, and it represents a shift in power from the buyer to the seller, too. For those who prefer just the numbers, here they are: Continue reading
A dire shortage of listings combined with the improving Silicon Valley economy and ever-lower interest rates is creating an intense seller’s market, which we have been experiencing since the first week in February, particularly in the high tech hotbeds of Cupertino, Mountain View, Sunnyvale, Palo Alto and nearby areas in both San Mateo and Santa Clara Counties. More demand than inventory fuels rising prices. How bad is it for buyers? Year to date, the median sales price is up a whopping 29% for single family homes in Santa Clara County.
While that statistic is pretty scary for buyers and just as exciting for sellers, it does not mean that all homes have increased in value by 29%. It does indicate strong appreciation. But also it points to more expensive homes selling now. For those of us active in the market on a daily, full time basic, it’s clear to see that both things are happening. How much have prices gone up? That varies by area, school district, price point, sale type and many other factors. Let’s get a quick view of the appreciation since the bottom of the market and also from the peak:
County wide, we have not yet recovered to the peak of the market (though it seems that in Cupertino they have already hit that peak pricing again for houses sold recently). Recovery is underway!
Individual markets are stronger or weaker than the average – let’s look at them next. These stats and graphs care of the RE Report, to which I have a subscription.
Please note that only 2 areas are under 100% for sales price to list price ratio. Palo Alto is at 106%!
And next, for condominiums and townhouses: Continue reading
Mini update for Santa Clara County as a whole as of September 17, 2012 for houses in SCC:
Actives = 1295
Regular sales for sale = 1157 (89%
Short sales for sale = 95 (7%)
Bank owned houses for sale = 43 (3%)
Sold in the last 30 days = 859
Regular sales closed in last 30 days = 675 (79%)
Short sales closed in last 30 days = 151 (18%)
Bank owned houses sold in last 30 days = 33 (4%)
It seems that although short sales are in increasingly smaller part of the inventory of available homes, they are highly desirable and are showing up in the solds at twice their ratio of actives. Put another way, the absorption rate looks to be higher. Let’s check the math on the moths of inventory:
All houses in SCC: 1295/859 = 1.51 months of inventory
Regular sales in the county: 1157/675 = 1.71
Short sales in SCC: 95/151 = .63 moi (63% of one month!)
Bank owned homes: 43/33 = 1.3
All of these numbers are low, low, low – but the short sales are the lowest of all!
POST FROM APRIL 22, 2011:
Yesterday we looked at the types of home sales around Silicon Valley by price point. Not terribly surprising, most of the short sales and bank owned homes were in the lowest price ranges. Today we’ll look at this type of information not by pricing tier but instead by geography – in other words, by either town, city or district of San Jose (area). This post will not cover every area but will be a sampling a few communities, mostly on the west side of the valley (since that’s primarily where I work).
By way of reminder, the small image to the left reflects Santa Clara County’s houses for sale as a whole – all areas and all price points. (You can see the full sized image by clicking on it.) The green area represents “regular home sales” and the brick red and light orange signify distressed properties listed on the MLS for sale (red is short sales and orange is bank owned or REOs). Next let’s see a few regions within the county to see how things are faring geographically.
1. Almaden Valley area of San Jose – homes listed for sale by type – very few distressed properties on the market!
Almaden is a lovely southwest San Jose suburban community (zip code 95120) that grew up initially with the cinnabar or mercury mining activity. Today it’s an upscale area of more expensive homes than most of the county, it enjoys really good schools and scenic views of the coastal range as well as the Santa Teresa Foothills. Housing here is costly but residents love the quality of life. Since the cost of homes for sale here is high, it’s not super surprising, after seeing yesterday’s post, that there are very few distressed homes on the market here. Next we’ll check the other extreme…. Continue reading
Right now, it is pretty easy to sell a house in San Jose. (That of course does not mean it’s easy to get top dollar.) A great indicator is the median days, weeks or months to sell. The local MLS to which I belong, MLSListings, can chart various statistics for us, including this one. So today I ran the figures for medians days to sell for San Jose going back five years. The lower the number, the easier it is to sell; as you can see, right now, it’s at the lowest point in five years: good news for home owners who want to sell!
How do the numbers break down? Visually we can get a good overall sense of the trends, but having the actual data is helpful too.
|Days to Sell, Median|
What I like about seeing the numbers in this format is the ease for comparing the same month in prior years. The most recent completed month is June, so let’s consider this June and those before. In June 2012 it was a fast 13 median days to sell. A year ago it was 34, the year prior to that 24, in 2009 26, 2008 48 (horrible for sellers!) and in 2007 28. The six year average for June, including this year, is 28 days. Homes now in San Jose are at less than half that for median days to sell!
The odds of selling a home are largely about supply and demand. Right now inventory is low and demand is high. The chances are good for success in selling this year if you do everything right (pre-sale preparation, hiring a good agent, marketing, etc.).
$1,485,000 : 4057 Cranford CIR, SAN JOSE5 beds, 3 full baths
$929,888 : 1304 ASHCROFT LN, SAN JOSE3 beds, 2 full baths
$899,900 : 3327 Jarvis, SAN JOSE3 beds, 2 full baths
$985,000 : 1760 Albert AVE, SAN JOSE4 beds, 2 full baths
$950,000 : 5307 Meridian AVE, SAN JOSE5 beds, 3 full baths
$435,000 : 1278 Bouret DR 2, SAN JOSE2 beds, 1 full bath
$1,099,000 : 1550 Trevor DR, SAN JOSE4 beds, 2 full baths
$869,900 : 4440 Jan WAY, SAN JOSE3 beds, 2 full baths
$839,000 : 1581 Tobias DR, SAN JOSE3 beds, 2 full baths
$1,085,000 : 1885 Camden AVE, SAN JOSE0 beds, 0 baths
See all Real estate in the Cambrian community.
(all data current as of 3/26/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.
Right now I’m working with a number of very frustrated home buyers. Silicon Valley real estate inventory is painfully low, and in the lower price ranges especially, that means multiple offers are fairly common. FHA home buyers, in particular, are getting out bid and out negotiated by all cash buyers, many of whom are investors.
How low is the inventory? Let’s have a look at January’s inventory for houses & duet homes (“class 1” or single family homes) over the last ten years in Santa Clara County (San Jose, Los Gatos, Campbell, etc.):
The average January inventory of available houses over the last 10 years is 2,636. At 1,382, January 2012’s available inventory of houses for sale in the San Jose area was just 52% of normal. Continue reading
Multiple offers have returned to many segments of the Silicon Valley real estate market. We are hearing about them in Palo Alto, Cupertino, Mountain View – areas where newly minted IPO money is having an impact – but also in more modest, middle class areas such as San Jose’s Cambrian neighborhood. The trend appears to be spreading.
What Silicon Valley home sellers need to know and do to attract multiple offers
If you’re a Silicon Valley home seller, what do you need to know to try to get multiples on your home? What should you beware of? In short, here’s what needs to happen if you want to attract multiple offers on your home for sale:
- The home must be turnkey, either fully remodeled or close to it – it must look like there’s nothing or very little for a buyer to do. In addition to being turnkey, it must be squeaky clean and well staged! It needs to be comfortable – not too hot, not too cold. You want buyers and their agent to linger longer.
- The price must be at or even under market value. That is, you must be willing to price it aggressively. Think it’s worth $1,050,000? You might list it at $999,999 to get in under a major price threshold and to be the very best, most attractive property for the money. Yes, it might be under priced. Over priced listings get either one offer at best or, more likely, none at all.
- The property must be highly accessible. If it is hard to see, you probably won’t get multiple offers (and may get none at all). (Please see articles on accessibility and on open houses.)
- Finally, the property must be well marketed. This includes a wide range of factors ranging from photographs, text, fliers, signs, and even the commission rate offered to the buyer’s side.
What Silicon Valley home buyers need to know and do to compete with multiple offers
If you’re a Silicon Valley home buyer, how do you win out in multiples without giving away all of your rights or overpaying for your house/home? Continue reading
Homes in Saratoga, CA: real estate market trends and statistics for houses as well as condominiums and townhouses.
The real estate market in Saratoga improved a bit last month. But, as always, it really depends on what subset of the market you’re considering. It will be much different between price points, for instance (as well as between school districts, proximity to town, views, acreage, etc.). Today we’ll review the broad trends in Saratoga 95070 to get a general feel for the conditions but this could be very different for the home you own or want to purchase because real estate is always very local.
Let’s start with the months of inventory, or the absorption rate. I ran the numbers from MLSListings.com, our mls provider, this afternoon. The numbers below reflect all houses (or duet homes) in Saratoga, CA 95070. With months of inventory, the lower the figure the “hotter” the market or the more in the seller’s favor it is. Six months is said to be balanced. For Saratoga as a whole, there are 4.17 months of inventory or MOI right now. That’s not bad. It’s a seller’s market but not strongly so. But what if we look at subsets of the market? Let’s try it by price point.
We could drill this data down by any number of factors to see what the hyper local’s market climate would be like. The mix could include sale type (distressed properties, short sales, bank owned homes vs “regular sales”), various school districts, a “walk to town” location, horse properties, homes with views, newer construction, historic homes. etc.
Schools are always a big deal in terms of market drivers. Saratoga has 3 high school districts and 4 elementary school districts, and understanding those boundaries can make buyers a little crazy. Anyway let’s tease this out just a tad by looking at the MOI for Saratoga by high school district to see what we get.
- Homes feeding to the Los Gatos – Saratoga Joint Union High School District (Saratoga High) have 4.71 months of inventory (a bit cool but still in the seller’s favor)
- Houses which belong to the Campbell Union High School District (Prospect High School) have 3.71 months of inventory
- Properties in the attendance area of the Fremont Union High School District (Cupertino school, Lynbrook High School in Saratoga) enjoy 2.5 months of inventory (a pretty good, strong seller’s market) Continue reading