The Santa Clara County real estate market in December brought mostly softer buying conditions with lower prices, slower sales, and a lower sales to list price ratio. Inventory shrunk further, though, and the months of inventory moved a bit more toward the sellers’ favor.
- Inventory (measured on the last day of the month) dropped further. The RE Report numbers differ from what I pull directly from the MLS, but the trends shown are very similar.
- On the RE Report, it’s 30.2%% lower than the month before but 140% as compared to a year ago.
- From my multi year stats below (3rd image down), it’s off 32% from November and up 100.2% from a year ago.
- The average and median sale prices for houses fell both from last month and from last year (both sets of numbers).
- The absorption rate (days / weeks / months of inventory) shrunk in December as compared to November but was up substantially compared to a year ago, of course – December 2022 was a raging, white hot sellers’ market.
- Multiple offers are still happening for some well priced homes in more desirable areas. Some of them are selling under list price, though, even with multiple offers.
- The sale to list price ratio fell to under 99%: the RE Report puts it at 98.7% for houses and the MLS numbers I pulled came it in 98.6% for houses
Here’s a quick summary of the Santa Clara County real estate market from our RE Report
Santa Clara County real estate market: data tables from MLS Listings
Here are some data tables that I pulled this morning with data running back to 2016 for a multi year view. These are a little different than the RE Report numbers, but the trends are the same.
Months of Inventory (Absorption Rate)
The absorption rate or months of inventory is one of the best ways to get a quick pulse on the Santa Clara County real estate market. This figure represents the time it would take for all inventory to sell off if no new homes came on the market and if sales continued at the same rate. For most of the U.S., 4 – 6 months of inventory means it’s a balanced market. Here it’s more like 3-4 months.
With my numbers (pulled from the MLS directly) we see that it tightened up in December. If we think in terms of a “rollback in time”, December was similar to February 2022.
How long does it take to sell a home in Silicon Valley right now? It depends on what segment of the real estate market the property is in, and what type it is. Most homes are selling in 3-4 weeks.
How long does it take to sell a home in Santa Clara County?
First, for the success stories, the properties that do sell, what’s the timeframe?
- Houses which have closed escrow averaged 27 days in September 2022 so far
- Also in September, the median days on market is 17 days
- For condos and townhouses, the average days on market so far this month is 38
- The median days on market for condominiums and townhomes is 27
Pending sales – how long were they on the market?
- Pending houses right now average 33 days on market
- Pending condominiums and townhomes average 28 days on the market
It’s interesting to see that the more recent sales were slower for the houses but faster for condos and townhomes as compared to the closed sales.
Active listings and length of time on the market
- Houses for sale in Santa Clara County that are not under contract (and not listed as “Agent Only”) average 52 days on market
- For townhomes and condos, it’s an average of 44 days on market
So it seems that for the homes which DO sell (and not all homes which are listed become sale pending), the average is in the 3-4 week range. What that says, pretty clearly too, is that if your listing is well marketed but doesn’t sell in three to four weeks, you’ve got a problem.
Some types of properties will always take longer (think Santa Cruz Mountains, ultra luxury homes and others), but overall, your home should be seeing 3-5 showings per week and get at least one offer for approximately every 10 showings, which should happen within 3-4 weeks.
What if your home has been on the market for a month with no offers, or only low offers?
If your house or condo has been actively listed and marketed for more than 4 weeks and isn’t selling, it’s time to have a conversation with your agent. Every situation is different and I cannot advise anyone but my own clients about what needs to happen in your case.
I can tell you that if your home does not get an acceptable offer in 3-4 weeks, there’s a good chance that the number one obstacle is a price that’s too high for the current market. If that is the case, it’s time to make a serious change in the price – think hedge clipper, not nail clipper. Otherwise, if home values are dropping and your price does not get ahead of it, you will be chasing the market down. It is very expensive when that happens.
Beyond price and just getting or not getting offers, you will want to understand:
- how many showings are there each week?
- what is the feedback from the buyer’s agents? (what are the buyers saying?)
- what homes ARE selling?
- how long does it take to sell if it’s underpriced? (that’s a common strategy today)
Some flaws are fixable and some are not fixable. You cannot do anything about a less desirable location or a neighbor with too many vehicles or an eyesore of a front yard. But you do control the price.
Some real estate gurus like to say “there’s no problem that the right price can’t fix”. That’s true, but sometimes there are cheaper ways to solve whatever the problem is.
In some cases, home sellers are offering to pay points on the buyer’s loan to offset the rising interest rates. Frequently it’s a lot cheaper for the seller to buy down the loan rate than to take a price reduction of 3-5%.
Related reading to how long does it take to sell:
Why didn’t my San Jose home sell? (on this site)
Beware over improving your property when preparing to sell (on this site)
Selling your home in Silicon Valley – 9 FAQs (on popehandy.com)
Earthquake faults and flood plains are of interest to home buyers throughout the Golden State and to their lenders, too. Part of the home sale and home buying process is to provide information on these risk factors so that consumers (and their lenders) can make an informed decision.
Natural Hazard Reports are included in the disclosures when homes are bought and sold here in Silicon Valley. Those reports will indicate whether or not the property is located in areas with known natural hazards, including
- Flood Plains (100 and 500 year floods from heavy rainfall)
- Liquefaction Zones
- Earthquake Fault Zones
- Unstable Soils Areas (landslide areas)
- Flooding from dam failure zones
But wouldn’t you like to know where those places are before ever deciding where to target your next home?
Mapping Earthquake Faults and Flood Plains
The Prides Crossing neighborhood in the northern part of Saratoga has a lot to boast about: a sense of community, easy access to commuter routes and many amenities, and laid-back California luxury. We’ll go into more detail below, but here is a profile of the neighborhood in bullet points:
- The average home is ~2,400 SqFt on ~12,500 SqFt lot, built between the early 1960s-70s
- Homes are in the attendance area for either Saratoga or Cupertino schools
- Expect to pay between $3 – $4M for most homes, possibly a little less for a small home near a busy street, and more for a larger, centrally located home
- The neighborhood is home to 2 parks, a member-owned pool and racket club, and has easy access to commuter routes, shopping, entertainment, and places of worship
- There are few hazards, but keep an eye out for Zinsco panels
Where is Prides Crossing?
Click to view full size – Prides Crossing map with markers
North of 85 near the Campbell and West San Jose borders, boundaries of the neighborhood include Prospect Rd to the north and Cox Ave to the south, with 85 and Saratoga Creek at the southern corners. To the west, Scully Ave and to the east Titus Ave border what makes up the majority of the neighborhood, although they are not exact boundaries (the map paints a better picture). Miller Ave is the main thoroughfare through the community with a brick and brass sign marking it’s entrance at it’s intersection with Cox Ave.
While not technically part of Prides Crossing, I did include a corner of the Summerplace subdivision (built 1973) in the neighborhood map as it might easily be mistaken as such. There are 46 homes in the Summerplace tract (5233), but 37 are only accessible through the Prides Crossing neighborhood, touching the south end of Kevin Moran Park, while the other 9 are on the opposite side of highway 85!
Continue reading below, or explore other areas in our interactive map of neighborhoods in this city. We are slowly adding more!
High Voltage Power Lines from around the West Valley.
“Location, Location, Location!” The most important element when buying or selling a home is the one thing you can’t change – it’s location. Because of that, you’ll need to know some location-specific things, naturally occurring and man-made. Like high voltage power lines.
What about this location?
If you own or are thinking of buying a home in Silicon Valley, here are a few location-specific things you want to know upfront so that you can make informed decisions:
- where are the earthquake fault lines?
- where are the geologic hazard zones, such as liquefaction areas?
- where are the flood plains?
- where are man-made things that will negatively or positively impact a home’s value? Things such as
- train lines
- electrical transmission
- school district boundaries
- zip code boundaries
- proximity to entertainment venues
When looking at maps, sometimes these items show up and sometimes they don’t. Realtors and other real estate professionals in the San Jose area often use a Barclay’s Locaide and various online resources to locate the natural hazard areas. There are other tools to help locate school districts and zoning restrictions.
Google maps can help uncover some other areas, like distance to shops and freeways, but sometimes it raises more questions than it answers. For instance, a years ago a Realtor who didn’t know the Belwood of Los Gatos area too well phoned me to ask what a large object showing up on satellite view in the hills of Belgatos Park was. It is just a covered reservoir, but since it was not identified on the map it concerned some buyers. Local knowledge is still extremely helpful.
Mapping the Grid: High Voltage Power Lines
The Santa Clara County real estate market has been in a cooling trend, but it warmed slightly in October and appears to be warming again with the January sales so far. Prices are certainly down significantly from the peak pricing a few months back, but sellers will welcome the fact that sales prices are moving upward again. If this continues, we may be revisiting the normal seasonal patterns – which many economists have predicted would be the case.
The average sale price to list price ratio is still at 100.1% for the county, but is under 100% in many areas now. (And when I pulled that from the MLS just now for the first 15 days in January, I see that it has sunk to 99.6%. Days on market, though, shrank from 35 in December to 34 so far in January, interestingly.)
Home Prices in Santa Clara County:
The numbers themselves point to a general movement of values sliding – at least until October, when it ticked up a little, and again here in the first half of January, when we also see upward pricing from sales that went under contract in December. I’ll jot the median sale price for the county here – it’s a large enough pool of sales to be pretty reliable as a gauge of the real estate market in the San Jose area. I pulled this data directly from the MLS:
January 1 – 15 2019 $1,200,000 prices up (so far) 5% from last month
December 2018 $1,145,625
November 2018 $1,250,000
October 2018 $1,290,000 prices up a hair
September 2018 $1,238,000
August 2018 $1,280,000
July 2018 $1,350,000
June 2018 $1,385,000
May 2018 $1,400,000
April 2018 $1,420,000
March 2018 $1,454,000 – PEAK
February 2018 $1,381,000
January 2018 $1,170,000
Between March and July, the median sale price dropped $100,000, or 6.89%. As you can see, it had also jumped considerably between January and March, and even at today’s lower median sales price, it’s still higher than January. It will be interesting to see where it ends up in January of 2019.
Median and Average sale prices in recent years
I think this is really interesting. Most years, both the median and average sale price are lowest in January (I have drawn in the pink or red lines at January for each year), but some years the lowest has been December for the average. This year, though, it looks like both the median and average will be lower in December 2018 than in January 2019. Have a look:
What does that mean? I’m not sure – most years both the median and average hit a low point in January. In a few years, the average hits a low in December while the median is still lower in January. Right now, it looks like both median and average will be lower in December than in January. Are we starting an early spring climb? Maybe so. We’ll have to watch and see.
A quick look at the numbers for this month’s Santa Clara County RE Report:
Trends at a Glance
|Trends At a Glance
|No. of Sales
|Sale vs. List Price
|Days on Market
|Days of Inventory
Please view the online, interactive RE Report here: http://popehandy.rereport.com
Or pull up the four page, printable PDF here: http://rereport.com/scc/print/Mary.PopeHandySCC.pdf
Bottom line, I still think we need to see what happens in February before we’ll know if we are returning to seasonal patterns or not. Right now, I don’t see anything that makes me think we are going into a correction right now.
The schedule for when property taxes are due in Santa Clara County is not intuitive and confuses most people, at least initially. The tax calendar is as follows:
- Beginning of fiscal year: July 1st
- First installment of taxes due covers July 1 – December 31st
- Second installment of taxes due covers Jan 1 – June 30
Although you might expect the two bills to be due & payable 6 months apart, that’s not how it works!
Installment # 1 is due November 1 and is delinquent December 10th
Installment # 2 is due February 1 and is delinquent April 10th
Please note that the April deadline is very, very close to that for personal income taxes (April 15) and many homeowners accidentally send in their property taxes on the latter day. This results in a costly penalty, so don’t be confused!! (Also, do not count on mailing your payments by 11:59pm on the deadlines either – the tax assessor’s office does not work like the IRS! Payments are due by 5pm that day!) Make sure you don’t cut it too close or you’ll find yourself paying 10% plus $20 more than necessary.
It is possible to pay your bill for your property taxes online, but the cost is significantly more than a postage stamp, so I don’t recommend it unless you are out of the area and cannot make your payment the normal way. (It’s 2.5% via credit or card – minimum $2.50 convenience charge.) You can also pay by eCheck for free, so that’s another good option if you are in a hurry.
Other articles of interest:
Home inspection vs appraisal
Appraisal value does not equal market value
What Do Silicon Valley Seniors Need to Know About Moving Their Property Tax Basis When Selling a Home?
Greet the morning with the sweet smell of fresh Garlic in the air – the Gilroy Garlic Festival is back!
If you’ve ever caught the vivid aroma of the stinking rose early in the day it’s likely a breeze coming over the southern Santa Clara County city of Gilroy, the Garlic capital of the world. Whether you love or hate the pungent allium, this herb is a favorite for many foodies in Silicon Valley and around the world.
Gilroy celebrates their favorite bulb one weekend of the year during the Gilroy Garlic Festival, the last weekend in July. This year it’s back for the 38th annual event held on July 29, 30, and 31, 2016. So what to should you expect from “summer’s ultimate food fair?” Food, food, food, fun, shopping, music, and more!
Gourmet Alley is “all about the food” – classics like garlic bread, garlic fries, calamari, scampi, and sausage are available at the booths, and at the end aisle, watch the Pyro-Chefs stoke up five foot tall blazes from their frying pans. Weird food lovers will enjoy a plenitude of flavors from other booths around the festival, including free samples of garlic ice-cream, alligator and buffalo meat, or ice cream in a half cantaloupe. There’s also the range of standard festival food stalls, beer, wine, coolers, and non-alcoholic chilled drinks.
If you are shopping to buy a home in Silicon Valley, you will be given a report, once in contract, regarding any endangered species‘ habitats on or near the property. How does this impact your use of the land, should you complete the purchase?
You might be surprised at how many at risk or endangered species there are in Silicon Valley. The Bay Checkerspot Butterfly has several areas in Santa Clara County which are impacted, including Communications Hill, areas near Coyote Valley and San Martin, the Silver Creek area of Evergreen and many other areas along the east foothills and south county. Others include: Golden Eageles, Tri-Colored Blackbirds, Western Pond Turtle, San Joaquin Kit Fox, Steelhead Trout, California Tiger Salamander, Salt Marsh Harvest Mouse, and many more animals, fish, birds and plants. A couple of days ago, I was reading that the threatened marbled murrelet, a sea bird which can roost up to 70 miles inland, is in Los Gatos (near Highway 9 and Daves, if not more places as well). They nest in old growth redwood trees – something that Los Gatos, Monte Sereno, and Saratoga have in abundance near the hills!
Suppose that the area in which you want to buy a home is within the habitat of an endangered species such as the red legged frog, the famous subject of Mark Twain’s The Celebrated Jumping Frog of Calaveras County and our official state amphibian. This is information that will be listed within one or more of the property reports, so read the Natural Hazard Report, Environmental Hazard Report and Tax Report you get in escrow very carefully. Now that you know where to find this information, what does that mean? (more…)
Today is the first of November. For many Santa Clara County home buyers and sellers, it marks the beginning of “the holiday season” and the end of the home buying & selling season. But is that always the case?
In my real estate practice (San Jose, Los Gatos and all over the county), normally I do have sales activity in November and December. Many times, clients want to be in their new home before the December holidays and the new year. Sometimes it’s for tax reasons. Other times it’s a late year relocation. Once in awhile, someone just wants Christmas, Hanukkah or some other major date in the new home.
This morning I logged onto MLS Listings to see the numbers of sales of single family homes in the month of November over the last dozen years or so to see what we could learn about November home sales in Santa Clara County. We don’t have a crystal ball for November 2014, but if annual patterns hold true again, around 800 homes are likely to sell this month. The lowest number in recent history was 510, and that was during the recession. Here, then, are the counts for houses sold in SCC in the last 17 years (as far back as I could go on the MLS):
2013 – 762
2012 – 810
2011 – 834
2009 – 853
2008 – 672
2007 – 510
2006 – 853
2005 – 992
2004 – 1146
2003 – 1136
2002 – 933
2001 – 996
2000 – 926
1999 – 1051
1998 – 1080
People still need to buy houses, for whatever reason it may be. The statistics tell us that they continue to do so here in November. If you are thinking of selling your Silicon Valley home, don’t believe that you must wait until the new year. A good, well priced, well presented, and well marketed home really can sell here at any time of year. Unlike the northeast, we do not have terrible weather that makes showings difficult or unappealing. If you’re interested in a fall or winter home sale, please call or email me. We can discuss it, your home’s pricing and everything else relevant to give you good information on which to base your decision.
Related reading: Holiday Home Selling: Good or Bad Idea?