In Silicon Valley, the housing market is again quite overheated.
- Inventory is down.
- Home sales are down (because inventory is down).
- And home buyer morale is down in the wake of multiple offers, overbids and bidding wars.
Pricing are rising fast. Some folks are now getting priced out of the market and many are just giving up until things calm down. We have seen this before: a Déjà vu.
This is not happening uniformly across Santa Clara County, but is a general trend seen with the most popular properties. These tend to be the most affordable homes in areas close to high tech job centers (such as condos and townhouses in Sunnyvale, Palo Alto, etc.) as well as the least expensive single family homes in areas with good to great schools (think Union Schools area of San Jose’s Cambrian district, homes in west San Jose 95129 with Cupertino schools, plus of course the more expensive areas with outstanding public education too). In general, it’s a seller’s market.
As a frustrated home buyer, what can you do? Besides just throw more cash at the problem, and give away all of your rights?
One approach is to find the segments of the market which are not quite so hot. For instance, there are lovely townhomes and condominiums which are selling a little more slowly because they are on the expensive end of pricing for their zip code. Those properties may not sell so fast because many of the buyers in that range are going to push just a little more to get into a single family home instead.
Another idea is to find homes with fixable problems, defects, or issues. You cannot change location, but it may be possible to take a 3 bed, 1 bath home and add a second bathroom to it. Many houses with pools (where pricing is under $1 million) sell with less bids because of the pool – and it IS possible to remove a pool, often making a home more valuable to most home buyers. So target these homes and there may be less competition than the same house without a pool.
Finally, consider properties which have been on the market awhile. Many buyers won’t take a second look at a house that’s been on the market for 45 or 60 days, but that may be the gem you need. Most of the time, properties that languish on the market are simply overpriced. Sometimes there are odor issues or other things which may require more effort to remediate, but these problems may be an opportunity in disguise.
Related reading:
What is a sharp offer or relative bid?
With dozens of offers on that house, why bother?
Overheated market, overheated emotions
