Happy New Year! Today I am re-publishing an article originally posted on this site in May of 2010 because inventory is at a 10 or 20 year low and I am sensing that some of my buyer clients are beyond frustrated and are trying to think of alternative ways of purchasing a home here in highly competitive Silicon Valley. Do you want to find homes that are not listed in the MLS? Then please read on!
In many parts of the U.S., buyer broker agreements are normally used between home buyers and their real estate agents, much like listing agreements are used between sellers and theirs. It’s not so common in Silicon Valley, though. Often home buyers are a little spooked at the prospect of signing a contract for buyer representation & compensation.
My Realtor colleague and blogosphere friend, Elizabeth Weintraub, has a great article on this topic on About.com, Buyer’s Broker Agreements & Buyer’s Broker Contracts, in which she explains the various types of buyer contracts and agreements which are commonly found around the country. The one which is used the most, if one is used at all, is the “exclusive representation” (which again is similar to a listing agreement, which is also usually an “exclusive representation agreement”).
Why would anyone want to use a buyer contract? Whether you’re the consumer or the agent, the answer is pretty much the same: to have options. In my real estate practice, I do not request nor require a buyer contract as long as my buyer client is willing to purchase something from the selection available on the multiple listing service (MLS). If that isn’t enough, though, then we chat about the buyer’s options.
Gilroy is a scenic area well known for wineries, farmland and fruit stands. More than anything, it’s most iconic produce is garlic, which is celebrated late each July with the annual Garlic Festival, which began yesterday and continues through the weekend. If you’ve never been, I highly recommend it! Go early and bring your appetite! There’s more than just eating to be enjoyed, but eating is surely high up on the list of priorities! Click on the link above to see what’s on the schedule this weekend. (Be sure to wear sunscreen and a hat. It is very hot…so drink a lot of water…)
In the days and weeks leading up to this fun food festival, the scent of garlic fills the early morning air and blows north along the coastal foothills so that those of us in Silicon Valley get a healthy nose full when grabbing our morning paper off the driveway. This has been my experience since I was a small child and I’m happy that all the progress of the last 40 or 50 years hasn’t changed the smell of garlic heralding mid-summer.
Garlic is king in Gilroy, but it’s not all that’s happening there
A nice easy, and fairly fast trip by car will bring you to South County and to Gilroy. It’s a wonderful day trip to explore the backyard of Silicon Valley, or better, take a whole weekend to get to know the area. There’s a nice downtown area where you can do some shopping and dining. Go out a bit and there are a number of fabulous wineries to check out. And lest we forget, Gilroy is a local epicenter of bargain shopping.
At the intersection of highways 101 and 152, the Gilroy Premium Outlet Mall is found. Go with the intention of spending money, because resistance is futile once you park your car. This afternoon I spent a few hours there with my daughter and we found some especially good pricing on clothes – perhaps because of the Garlic Festival and the anticipated crowds.
Many will attest that cars are found for a better price there, too.
Condominiums and townhouses in Santa Clara County have enjoyed rapid appreciation and almost perfectly steady improvement in the market in the last 18 months or so. Today we’ll take a snapshot view of it with a few graphs. First, let’s consider the average Days on Market (DOM) and the sale price to list price ratio for condos and townhouses in Santa Clara County.
The chart above shows some calming down in the Santa Clara County condo market. First, it appears that the sale price to list price ratio stopped its wild ascent and has reversed itself some in June 2013. But also, it seems that the days to sell leveled out (and stopped its decline). Just to check on the apparent trend, I went to MLSListings and ran the numbers for the closed sales just yesterday and today (July closings). The average sale price to list price was 106%, a tad lower than what we saw in June.
What about new inventory vs sold homes? In the chart below, we see that the gap between them widened in June: more inventory, fewer sales (of course the June sales were contracts ratified in May, in most cases). This also suggests a loosening in the condo market here. It’s not suddenly a buyer’s market, but perhaps we are seeing the beginning of a trend reversal? Have a look at the chart: Continue reading
Residential real estate prices in Santa Clara County rose in February 2013 by 34.5%. That’s the 5th month in a row that the median sales price has been higher than the year before by more than 20%. This is why we are saying it could be a bubble. The median price for single-family, re-sale homes is up 53% from the lowest part of the market, which happened n March 2009. Santa Clara County as a whole is still 21% below the peak which occurred in June 2007. That said, some areas area already back to peak pricing, including the hotbed areas of Cupertino, Sunnyvale, Mountain View and Palo Alto.
FEBRUARY SINGLE FAMILY HOME MARKET STATISTICS FOR SANTA CLARA COUNTY
Sales of single-family, re-sale homes were down 21.4% year-over-year (due to lack of inventory, not lack of interest by buyers). There were 585 homes sold last month in Santa Clara County. The median price for homes jumped 34.5% yea-rover- year. The median price has been higher than the year before for the past thirteen months. The sales price to list price ratio has been over 100% for the past twelve months. It was 103.8% for February 2013. That is the highest the ratio has been since April 2005.
The average price for homes was up 25.8% year-over-year. Pending home sales were down 33.5% yearover- year. That’s the fourth month in a row pending sales have been down, portending a slow first quarter in 2013.
Next let’s see the median and average home prices over time along with the number of sales. Note how sharply the number of sales is falling off while prices are rising. This is a factor of critically low inventory. 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.).
$899,888 : 3488 Gavota AVE, SAN JOSE3 beds, 2 baths
$950,000 : 1651 Hyacinth LN, SAN JOSE3 beds, 2 baths
$1,968,000 : 2307 Faircrest DR, SAN JOSE5 beds, 3 baths
$1,150,000 : 1798 Rosswood DR, SAN JOSE4 beds, 3 baths
$1,649,000 : 15048 Esther DR, SAN JOSE4 beds, 3 baths
$1,249,000 : 1785 Marcy Lynn CT, SAN JOSE4 beds, 3 baths
$1,289,000 : 3539 May LN, SAN JOSE4 beds, 2 baths
$675,000 : 4838 Lakebird PL, SAN JOSE2 beds, 2 baths
$2,350,000 : 14920 Sutton DR, SAN JOSE5 beds, 4 baths
$895,000 : 2029 Los Gatos Almaden RD, SAN JOSE3 beds, 3 baths
See all Real estate in the Cambrian community.
(all data current as of 9/19/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.