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How Long Does It Take to Sell a Silicon Valley Home in Today’s Market?

How long does it take to sell a Silicon Valley home in today’s market?  As always, it depends on how you slice and dice it!  “Silicon Valley” is not a super tightly defined area, but roughly includes most of Santa Clara and San Mateo counties, with a smattering of Alameda, Santa Cruz, and even San Francisco counties to boot.  Since the vast majority of it is in 2 counties, let’s have a look at them first.

The charts below were created from MLSListings.com, the real estate agent supported multiple listing service for our region.

(1) Single Family homes in San Mateo County and Santa Clara County – the days to sell is at a very low figure of 25!

 

 

San Mateo County & Santa Clara County single family home average days to sell

San Mateo County & Santa Clara County single family home average days to sell

 

(2) Condominiums and townhouses  in San Mateo County and Santa Clara County – the days to sell also sitting at 25, though the pattern has been a little different from single family homes.

 

SMC and SCC condos and TH - average days to sell

SMC and SCC condos and TH – average days to sell

 

The very broad, 2 county view looks amazing with the sale pending properties popping at an average of 25 days on the market. What happens if we narrow it to San Jose, the largest city in Santa Clara County, which has about 60% of the county’s homes? (more…)

Thinking of Selling Your Silicon Valley Home? Get It Right The First Time if You Go On The Market!

Sell your home the first timeYou keep reading that it’s a “seller’s market” in Silicon Valley real estate.  You hear about multiple offers and home prices getting pushed up.  Interest rates should be inching up in the new year – so competition remains strong.

Should you jump in as a San Jose area seller now?

Maybe, but if you do it, do it right!  The dirty little secret that no one talks about is that many Santa Clara County homes for sale are not selling.  They sit on the market, popping up on MLS searches for month after month.

There are quite a few common myths that home owners believe about selling their property. Believe these, and act accordingly, and your chances of selling are dramatically damaged:

  • my price is high, but buyers can always “make an offer”
  • it’s a seller’s market, my home does not have to be perfect
  • if I fix up the home to sell, the buyer may not like the changes (this one is especially common)
  • it was like this when I bought it, so I don’t have to improve it now
  • I have lived with (fill in the blank) forever, there’s nothing wrong with it

Getting the staging and pricing right matter tremendously.  Today let’s just focus on staging.
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It’s late August – has the Silicon Valley real estate market stalled out?

Oftentimes, the Silicon Valley real estate market in the month of August is a little slower than most of the rest of the year (worse still: December).  But with our prolonged and dire inventory shortage, I wondered if the market was slowing much this August.  So rather than guess or ask around what other agents are experiencing, I went to the source, our local MLS, to see what the numbers say.

One marker is the speed at which homes sell.  For single family homes in Santa Clara County, right now there are about 1.57 months of inventory – that’s pretty good if you’re selling and pretty tough if you’re buying.  It’s about the same for regular sales as for all sale types (short sales, REOs etc.)

Days to sell are still pretty short.  In August, it remains under a month for regular sales (but longer for distressed properties – if you can find them!).

August 23 2013 SCC days to sell SFH regular sales

What’s the takeaway? Home sellers who might be tempted to wait until September to sell may find that August isn’t a bad time after all – this year.  Our Santa Clara County real estate market is anything but uniform, so this birds eye view may not apply to your area, home type, pricing tier, etc.  Overall, though, even in August, it’s a hot seller’s market in Silicon Valley. (Realtors: it’s a good month to keep working!)

Average sales price of houses in Santa Clara County over one million dollars: what does that buy you?

1 million dollarsThe average sales price of houses sold in Santa Clara County has been sitting at just over one million dollars for the last four months.  This isn’t shocking to Realtors active in the San Jose area, as we’ve seen appreciation going through the roof over the last 18 months or so.  In many areas, home values are up about 20% over a year ago.  But this fact did make front page news in today’s San Jose Mercury: Average Silicon Valley home tops $1 million.

What sort of home is that million dollar place in Silicon Valley?  To provide a quick snapshot, I ran the closed sales of single family homes (mostly houses but also some duet homes) for the last week in this county.  This is all of the county, both more and less expensive areas, with better and worse school districts, from Palo Alto to Gilroy.  On average, these properties were 43 years old with  living areas of approximately 2000 square feet on lots of about 11,000 SF and had been on the market for 22 days.  The average list price  was $1,055,765  and average sales price $1,089,940.

These numbers are horrifying for people considering our market from out of the area. But here – it’s just how it is.

Are fewer homes selling in Santa Clara County?

With the Silicon Valley real estate market reaching for some balance, the fear is that leveling off will turn into a market crash.  So far, we are not hearing of prices going down.  Conversely, they appear to continue their upward march!  But in Santa Clara County and San Jose now, we are not hearing so much about high numbers of bidders on properties.  Some homes which might have gone under contract with multiple offers a few months ago quietly march past offer due dates with no bids presented.  Even open houses seem quieter.

Some of what we are seeing is surely seasonal.  Some has to do with rising interest rates. And some, predictably, from buyers tired of giving away their rights when dozens of competing offers vie for the same property.  They are voting with their feet and waiting for more calm in the market.

But have sales slowed?  This morning I turned to MLSListings.com and ran the “sale pending” or “under contract” dates for single family homes in Santa Clara County by week since the begging of June.  I wasn’t sure what I’d find.  Interestingly, the total of the 7 weeks shows home sales pretty consistent with what we had last year, even though inventory is tighter now.  Have a look at the sale dates (pendings, not closings) for 2013, 2012 and 2011.

 

Santa Clara County under contract by week June July 2013

 

From this set of data, it appears that there is no cause for alarm – real estate sales seem to be at a healthy level despite what is happening with interest rates.  Sales in 2013 took a little dip the week of July 4th for all three years.  In 2013, it was a far bigger drop in sales the week after that, but those were more than compensated for the week after that.

Not tracked here, of course, are any of the other data points such as days to sell, sale price to list price ratio, or what happens if we tease out the real estate market by school districts, zip code, price point, etc.    All of these areas, and many more, can make the real estate market conditions where you live (or where you want to buy) very different.

 

 

 

How is the Santa Clara County condo market?

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.

 

Santa Clara County Condos and Townhomes Average DOM & Sale to List Price Ratio July 2 2013

Santa Clara County Condos and Townhomes Average DOM & Sale to List Price Ratio July 2 2013

 

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:   (more…)

The Santa Clara County Real Estate Market is Calming Down

At last, home buyers are beginning to see an easing up in the Santa Clara County real estate market. Although it remains a strong seller’s market, it’s inching back in the direction of more normalcy with fewer numbers of offers and a flattening of prices.  It’s way overdue.

This morning I logged onto MLSListings and ran some quick stats for the county as a whole for single family homes. We see the months of inventory rising, the gap between available and sold inventory widening, the sale price to list price ratio dropping and prices flat.

First  – Santa Clara County months of inventory last 12 months as of July 1 2013

 

Santa Clara County months of inventory last 12 months as of July 1 2013

 

How does this look compared to a longer period of our local real estate history?  I ran it back to January 2004:

 

Santa Clara County Months of Inventory Jan 2004 through June 2013 single family homes

 

Overall, 3.6 months of inventory looks pretty healthy (anything under 4 months is a seller’s market, though the National Association of Realtors says that 6 months is balanced). The question is whether this was a blip or a trend reversal.  We’ll have to watch and see. (more…)

Home prices continue to rise in Santa Clara County

Once in awhile I hear talk of the market cooling just slightly, in certain segments of the valley.  Certainly some buyers have had enough and have gone back to waiting.  “See you in six months”, said one of my clients after getting disgusted at the black Friday like crowds at one Sunnyvale open house.

The numbers do not seem to bear out any calming of the market, though.  Perhaps it’s all that hiring going on in Silicon Valley!

Just now I logged in to the MLS and ran some of the charts via the stats section. I found it interesting – “up, up and away” continues to be the pricing story here.  Have a look.  All stats are for single family residential (aka houses and duet homes or attached houses) in Santa Clara County only.  What is most striking to me is how HIGH these prices are for the median & average list and sale prices.  Staggering, really.

Median list price of houses & duets for sale in Santa Clara County. (Median means half listed for more and half for less than this amount.)

 

Median list price houses in Santa Clara County

Median list price houses in Santa Clara County

 

The average list price of single family homes in Santa Clara County.  (How can they be so high?) (more…)

Santa Clara County sale price to list price ratio rising dramatically

This week I am hearing many stories of Santa Clara County houses listed for sale getting 30 or 40 or more offers.  Not every offer is good (often it is the overly confident all cash buyer who comes in last place), but many are excellent and the choice sellers face is daunting only because there are so many qualified buyers willing to pay so much for the scarce available inventory.

When looking at the homes which have sold and closed, we do see an uptick in the Silicon Valley realty market, but not as dramatic as what we are hearing on the street, at office meetings, broker’s tour or calls with colleagues in the trenches.   So I thought that if we looked at sales week by week, it might tell the story of what’s happening a little better.  By the time a home closes escrow, it’s yesterday’s news: that house or condo actually went into contract a month ago in most cases.  Even a week by week review of closed sales of houses will be old news to a degree, but when you see week over week, the trend, at least, becomes more apparent.

Have a look – please note that the closings in the first tracked week, which likely represent sales in December, show a cool sale price to list price ratio.  A mere week later, though, with fewer sales (and inventory, we can presume) and it’s a totally different story.  The change is not a fluke, either, but continues week after week….

 

Photographs of the front of the home: a few tips

 

And here is how that ratio looks if we graph it:

 

Santa Clara County Sale Price to List Price Ratio by Weeks 2013

 

Where is it going next?  The sales happening now, at least many of them, sound stratospheric.  Is this what we’ll be seeing in March’s closings?

 

Santa Clara County Sale Price to List Price Ratio Projected

 

This week’s selling is next month’s news.

 

 

 

Is Silicon Valley real estate overheating?

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”.

 

Santa Clara County and San Mateo County sale price to list price ratio and average days to sell

Santa Clara County and San Mateo County sale price to list price ratio and average 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.

 

New Listings vs Sold SCC Feb 2013 (Small)

Santa Clara County New Listings vs Sold Houses last 12 months

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