Today we’ll look at the ratio & relationship between real estate listings and sales of houses and duet homes in Silicon Valley over the last eighteen months. The goal is to get a sense of the market trends in terms of the overall absorption of homes for sale. (We’ll give a glance at condo and townhome sales but the focus is on single family homes.) How hard is it to sell a home? The answer has to do with supply and demand – the number of listings and the number of sales.
In the graphs below, the reddish brown line represents the number of pending sales. The blue line indicates the number of listings or homes for sale. Put simply, the closer these two lines are together, the hotter the market – that is, the more of a seller’s market it is. When they are far apart, it’s more cold, more of a buyer’s market. If the lines cross, it is a wild frenzy (that does happen in one case, as you will see). Below please find the graph for the homes in Santa Clara County overall (all areas).
You can see that these two lines pinch together in about December 2009 to January 2010. Prices had dropped and investors were swooping in! The market has cooled since then.
For condos and townhouses, all of Santa Clara County:Here the two lines – or the market – were close together for about 3-4 months. Buyers understood that condominiums in Silicon Valley were bargain priced, and they responded by buying.Now let’s look at various areas around the county. We’ll take these in Alphabetical order, beginning with Almaden Valley.
As you can see, the market improved but never got as “hot” as in the county generally. This is because it’s a more expensive area, and most of what was selling in winter consisted of entry level housing.
Cambrian had a couple of flurries, beginning in the spring of 2009 and again in winter 2009 – 2010.
Campbell, which costs about 10-20% more than Cambrian, never got so “hot” by comparison.
Cupertino, which is always in demand due to the superior school scores, had a longer than typical run of very close listings to pendings.
Like everywhere else, it looks like the fastest absorption of homes for sale was happening last December.
While there was a drop in inventory over the holidays, it was still not a great time for sales for Los Altos Hills last winter.
The Los Gatos area has fared worse than Los Altos….Sales are now improving, but listings are going on the market at an even faster rate.
Monte Sereno is similar to Los Gatos – listings and sales are both picking up, but new listings are outpacing new sales.
Next, San Jose as a whole – all areas, from Alum Rock and Berryessa to South San Jose, downtown, Willow Glen, etc. When you view what’s happening in the city of San Jose generally, it is amazing: the numbers of listings did not keep up with the numbers of homes going under contract for 6-7 months. Talk about a frenzy! The San Jose real estate market began to cool in spring 2010 and that trend has continued through the summer.
Saratoga, like other high end markets, is the other extreme. The market improved for sellers during winter (in terms of homes getting sold, but not necessarily for getting the best price), but nothing like what we saw in San Jose.
Finally, the Willow Glen market. The market improved over sinter and wasn’t too bad in Spring, but over summer there has been both a drop in sales and a rise in inventory, making it much tougher on sellers in this part of San Jose.
What can we take away from this? In most parts of Silicon Valley, in recent months sales have dropped off while the numbers of listings have increased. This makes it much easier for buyers and much tougher for sellers. If your home is for sale, it is important to understand that the market is much different now than it was four or six months ago. Buyers may not tolerate or accept some seller conditions (or pricing) from last winter or spring. To get your home sold now will require better condition and pricing. If you rely upon the sold prices, you may be deceived since the market is not the same. Too much supply and not enough demand will put downward pressure on prices.
Buyers who are jumping into the market now are bargain hunting. Buyers, it’s a great time to buy – it may not stay like this for you a lot longer with fantastic prices and interest rates both!
Sellers, if you aren’t prepared to sell at today’s market values, you may want to wait until the market can bear your price. Otherwise the odds are that your home will languish on the market, racking up days on market but not getting sold. To sell, your home has to be the best value and the most attractive home, priced in the bottom 20-30% of similar homes for sale.
The information here is general and what applies to one neighborhood or area may not apply within certain price points or school districts, for instance. For more information about your home or area, please call or email me.
Numbers from MLSListings.com, graphs created on that site – info deemed reliable but not guaranteed.