Are you getting priced out of the market? If so, you’re not alone. In Silicon Valley, the prices of houses are rising dramatically right now. In some cases, homes are selling for 20% or more than list price. In the last week I’ve heard of at least 2-3 homes which sold $400,000 or more over the asking price. This is happening in prices up to $3 million especially, but I’m also hearing it in the luxury tier.
With rapid housing price appreciation in Silicon Valley, home buyers who are “patiently waiting” for more inventory and just the right house to come on the market can end up finding themselves “priced out of the market“.
What does it mean to be “priced out of the market”?
In a nutshell, it means that while a few months before, you could afford the type of house you wanted (more or less), but prices have risen so fast that now you feel that you cannot buy anything at all.
If that’s the case, you feel that it’s no longer worth it to buy – so you continue to rent (or not purchase that investment property).
The waiting strategy may backfire
Have you been patiently waiting for just the right house to come on the market? Let me suggest to you that it may not be forthcoming. What you could afford a year ago is no longer possible today, and we do not see that situation changing anytime soon. In fact, appreciation would appear to be steeper now than it was 12 months ago. Waiting can be very expensive in a market like this one.
Why do buyers wait when they might do better to jump in?
- they may be unrealistic as to what the market will bear (sometimes despite the statistics)
- they are cautious to the point of being unable to move forward
- they are listening to bad advice (at work, from friends etc.)
Want to be a home owner in the San Jose area? Hire a great agent, but then LISTEN to him or her!
Pay attention to the stats (such as popehandy.rereport.com ) but remember that there’s usually a lag time between what’s happening “in the field” and what’s apparent in the statistics. If you find comparable properties to support the price you want to offer, you’ll need to remember that those are yesterday’s sales, and tomorrow’s closed sale prices are highly likely to be higher.
If you need a reality check, ask your agent about office meeting discussions (the meetings are still happening virtually via Google Meet, Zoom, or other platforms). Last Saturday some buyers of mine and I viewed a home in west San Jose. There was a line at the door because the Calendly app had failed and apparently booked 5 of us for the same time slot. I asked the agent about offers and was told, that although it had been on the market just a couple of days, they already had 4 preemptive offers in hand, and that was 2 days before the offer due date. The next day, he let us know that there were 60 disclosure packages out. Today I learned that he got 21 offers. And it sold astronomically high.
This is no time to fiddle and watch Rome burn. If you want to buy a house in Silicon Valley and have been sitting on the fence, this may be the time to get off and dive in. Talk to YOUR trusted Realtor for guidance as it’s not the same in Blossom Valley or South San Jose as it is in Saratoga or Monte Sereno or Los Gatos. It’s a hotter market for homes that look great and are fully remodeled than the ones which need updating.
Will you be priced out of the market? I hope not. Check the stats, but talk with your trusted Realtor for guidance. Looking for a great agent? Give me a call and we can set up a time to chat in person or by phone.