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
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.
Santa Clara County New Listings vs Sold Houses last 12 months
AreaVibes.com ranks cities all over the United States and recently came out with the top 100 for California. Many of our Silicon Valley cities and towns made the grade!
- Los Altos Hills # 3
- Monte Sereno # 6
- Los Altos # 8
- Saratoga # 9
- Palo Alto # 10
- Foster City # 11
- Cupertino # 26
- Mountain View # 27
- Belmont # 29
- San Carlos # 35
- Menlo Park # 38
- Woodside # 46
- Portola Valley # 50
- Atherton # 64
- Los Gatos # 67
- Sunnyvale # 82
- Scotts Valley # 89
- Daly City # 96
They called the Loyola area of Los Altos a city and it was on this list too (# 39 ) but it is only a district, not a city or town. Surprising, then, that they didn’t include Almaden Valley (part of San Jose) or other nice districts as well.
To see the entire list, please visit their website:
How are the sales of condos and townhouses in the San Jose, Santa Clara County or Silicon Valley area? Just as with houses, the market is getting more active… things are picking up. The trend is for increasing sales – pending condo sales in Santa Clara County are rising each week.
Nov 1 – Nov 7 = 116 newly sold (sale pending) condominiums and townhouses
Nov 8 – Nov 14 = 123
Nov 15 – Nov 21 = 129
Year over year, it’s up dramatically too. Nov 1 – 22 2009 = 234 newly pending sales and Nov 1 – 22, 2010 = 366 newly pending sales (that’s a 64% increase). That is a very huge increase!
Looking at closed sales and comparing it to two or three weeks ago, we see improvement. Here’s a graph showing the months of inventory for condominiums and townhouses in Santa Clara County, San Jose, Sunnyvale and Los Gatos (as samples). Below please find the months of inventory for all sale types (REOs, short sales and regular sales) and just short sales. Countywide and in most places, it remains much harder to sell a “short sale listing” than a regular one.
People often ask me, “how’s the market?” The answer is, it depends. It depends on whether it’s a short sale, REO or regular sale, the schools, view, condition, etc. The Silicon Valley real estate market really isn’t “one market“. It’s a bunch of smaller markets woven together. So the answer depends on what you’re looking at.
Today we’ll focus on the sale type and take a broad view of regular sales vs short sales with Silicon Valley houses/duet homes and condos/townhouses. The data comes from MLSListings.com, our local multiple listing service, of which I am a member. I crunched the numbers today. I have made every effort to provide accurate info, but can’t guarantee it.
To arrive at the months of inventory, I get the number of active listings (not pending, but available, or “status 1” for my local Realtor readers) and the number of closed listings for the same area/home type which have closed in the last month. Divide the first number by the second and you get months of inventory or MOI. Below please find the numbers for Santa Clara County as a whole, San Jose as a whole, and various cities or areas of San Jose.
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This is a must-see 2 bedroom, 1.5 bath property in beautifully green Sunnyvale Meadows community! Gorgeous townhome in quiet, back of complex location! Remodeled, contemporary kitchen with newer Ikea cabinets, countertop & appliances. Updated bathrooms. Beautiful wood laminate flooring in most of downstairs. Master bedroom includes a large wall of closets with great organizers. Spacious back patio with room to garden & storage shed. Even more storage at the carport. Complex includes sparkling pool & clubhouse plus lush greenbelt areas.
Dues were raised this year to the current $360 per month to cover the cost of wood repairs, painting and new roofs throughout the complex. Work is in process now and nearly done! The roofs are on and the last bits of painting are happening now.
This is the least expensive home for sale in Sunnyvale Meadows. Hurry!
Open House Saturday, Oct 2, 2010 from 2 – 4pm. Please stop by!
Read the full real estate description from the MLS below.
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The condominium & townhouse market is improving dramatically now. It is evident both in looking at the stats countywide and in my recent experiences holding open my townhouse listings in Saratoga and Sunnyvale as well as recently participating in the sale of a townhome in Almaden Valley (representing a buyer) – all different areas and price points but all very active.
Here are the numbers for May sales of condos and townhomes for all of Santa Clara County:
|Trends At a Glance
|No. of Sales
|Sale vs. List Price
|Days on Market
As you can see, the days on market are shrinking and prices (both median and average) are rising. A few numbers cut back slightly in May: the sale to list price ratio retreated a little to 99.9% and the pending properties went down a little too. But the number of sales were up.
The “months of inventory” or absorption rate is a great way to know how much of a buyer’s or seller’s market it is in any given place. Six months is considered balanced, less is a seller’s market and more is a buyer’s market. Here are the months of inventory for selected communities in the “west valley” area of Silicon Valley – they are all “seller’s markets”, but some are strong and some are approaching balanced:
|SC County (all)
|Willow Glen (SJ)
Of course, this is still painting with a broad brush. The absorption rate for any of these areas may not be accurate for the various price points or school districts that might be found there. For instance, a large luxury townhouse in Los Gatos which is downtown might be a really different type of market than a small, entry level one bordering Campbell or Cambrian Park.
What everyone’s wondering is if this seller’s market for condominiums and townhouses will continue despite the end of the federal home buyer credit. To utilize that credit, homes had to be in contract by April 30th. Most of those should be closed now, or nearing that date at best. So we’ll really know more as we move into summer. My sense, though, is that what’s driving this market is much more the affordable prices of homes and of loans. The credits are a bonus, but many in Silicon Valley make too much money to be able to use them.
For information on your particular part of the Silicon Valley condo or townhome market, please give me a call or email me!
The real estate news is so mixed it’s mind boggling, whether it’s a national perspective, one specific to California, the San Francisco Bay Area, the “south Bay”, Silicon Valley or even San Jose in particular. It is anything but a uniform, monolithic market. Even so, it’s good to look at the big picture along side the hyper local level, and that’s what we’ll do today.
Today’s San Jose Mercury News featured a front page article by Sue McAllister (an excellent reporter) on Santa Clara County housing values. She shares that Zillow says that we’ve hit bottom here in Santa Clara County. That is certainly good news to home owners accross Silicon Valley! And I don’t disagree that countywide, we’re definitely looking up right now. No guarantees for the future, but Zillow says that the threat of a second or double dip no longer seems likely. Whew!
Unfortunately, there’s another real risk to this recovery and it’s not the “shadow industry”. This time it’s homeowners walking away because they’re underwater (not because they can’t afford to stay, but because they choose not to). Sixty Minutes did a segment on this phenomena of home owners walking away last night., which you can watch via this link.
Earlier today I updated my series on Silicon Valley short sales at my Live in Los Gatos blog, where I’ve been tracking the number of active listings in select parts of Santa Clara County which are offered for sale as short sales. Below please find the areas and dates I’ve charted:
|Los Gatos Mtns
|San Jose (all)
To read the entire post, please continue on to Silicon Valley Short Sale Snapshot.
The city of Sunnyvale, CA, is known for low crime and high tech. Its a city of about 100,000 residents and many businesses. Its a quick hop to the Cal Train in Mountain View, so is in a good commute location both for Santa Clara County but also for jobs ‘on the peninsula’ too.
Like the rest of California, Sunnyvales history goes back to the days of Land Grants (first Spanish, then Mexican, then US Patents). The first non-native beginnings of this city were in 1842 with the Rancho Pastoria de las Borregas land grant, held by Estrada and Inez Castro and later becoming Mountain View and Sunnyvale. (The arrangement with land grants was that the land was free, but the owner had to occupy it. Such a deal!) Its interesting history, so take a look!