How many offers will that property get? How much over asking will it go?

Silicon Valley real estateThis month I’ve celebrated my 20th year in real estate.  When I began, in Feb 1993, it was a slow time, a buyer’s market.  Realtors used to say “keep it alive until ’95“, when they expected it to recover.  And recover it did – by the end of the decade, we saw another extremely limited inventory with intense buyer interest and once again (just like the late 80s), a price run up.  It was crazy.  Some homes were getting lots of offers – 5 or 6 at a time, sometimes even more!  In 2000 and 2002 it was crazy.  I remember getting 15 offers on one house in Cupertino.

Huge numbers of multiple offers in Silicon Valley real estate sales today

Last year, though, was another one of those wild markets but much  worse.  One of my listings in Santa Clara last year got 20 offers, and another one in Blossom Valley got 22 – and they were not under priced!

In the last week, I’ve heard of more than 70 disclosure packages going out on one Cambrian house (it got 32 offers), and another one in South San Jose / Santa Teresa selling 55% over list price.  Not to mention the fact that many offers are all cash and a whole lot of them, whether cash or financed, are without contingencies of any kind – no inspection, loan or appraisal contingencies included.

These numbers are mind boggling.  We used to have rules of thumb – 1% per offer or $10,000 per offer over list price.  But when you’re talking about dozens of offers, those old rules of thumb don’t work so well.  (They work better in single digits.)

In many cases, approximately half of the number of disclosures pulled will become offers.  That ratio is higher, perhaps 2/3, when the property is turn key, and it’s lower if it’s a fixer. A property that has scary repairs needed (foundation, drainage, big structural items) may get 25% or fewer offers per disclosures reviewed. If a house has 100 disclosure packages taken out, we might think of it as 50 offers – but it could be 25 or it could be 75 offers. No one knows until they are turned in. (Back in the days of small numbers of multiples, there were times when 4 agents said they were going to bring offers and I got zero, and others were 4 said they were writing and I got 8.)

Home prices are rising, so don’t rely only on the comps (more…)

How’s the Campbell Real Estate Market?

Today we’ll have a look at the Campbell real estate market. Sitting on the western side of Silicon Valley between downtown San Jose and Los Gatos, Campbell has small town charm with big city ammenities.  The schools are good, the crime is fairly low, and there’s a nice sense of community identity & participation. The downtown area is vital, but so are the shopping hubs outside of the historic zone.  The local parks are a big draw too.

Homes range from modest condos to historic properties and large, estate-like homes on big lots. Just about every type of residential architecture can be found here, with of course a preponderance of ranch style homes but also Eichler homes, Victorian houses, Craftsman style homes, Spanish or Mediterranean design, and Contemporary homes.

“How’s the market?” will elicit different answers by neighborhood, home type, school district, and price point.  We’ll separate out the “markets” by pricing quartile in this post.

First, an overview of listing activity among single family homes in Campbell (data from Altos Research, used by permission/subscription):


Campbell, CA, real estate statistics for June 22 2009


And now the same but for condominiums and townhomes:


Campbell CA condominium and townhouse real estate stats


Generally speaking, inventory is somewhere between flat and barely declining. List prices appear to be falling slightly among single family homes and rising slightly among condos (which are more likely to qualify for FHA loans and benefit from some of the first time homebuyer credits).  Nothing dramatic here, but the condo market may have already hit bottom while the market among single family homes is coasting there … almost there….

Visually, the median list price “looks” like this when viewed over the course of the last year and both the conglomerates of single family homes and condos are shown (rather than broken down by price quartile):


Campbell single family homes and condos


These kinds of graphs and charts can be a little deceiving, though. The perception has a lot to do with which data you’re looking at. Below is JUST the combined “curve” for the median price of single family homes over the last 1 year.