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
What should you look for when buying a luxury home in Silicon Valley? Whether it’s a move-up purchase or a first home, there are a few tips which will be helpful for you to know going into it that will make the whole home buying experience smoother and easier. We’ll hit on 3 areas: first geography & construction, second hyper local factors that impact market value, and finally qualities or features of the property or house itself.
It’s hard to assign an exact price tag on what constitutes an estate or luxury property, but in and near Silicon Valley, in most regions it’s the $2,000,000 and up price point (it will be less in Morgan Hill, Coyote and Gilroy – and likely more in Hillsborough).
1. Geography and Bay Area Construction: it’s different here!
The first and most important thing to understand is that real estate and housing construction vary from one region of the country (or the world) to the next. This is true for all types of homes, actually, but perhaps more obvious in the priciest homes. Luxury real estate in Silicon Valley is a little different from similarly expensive homes in other parts of the country due to our climate, soil conditions, and natural hazards, such as earthquakes. What seems mandatory for a high end home (and might be ideal to have elsewhere) could be a problem here, so it’s helpful to literally understand the lay of the land before you get too far along the home buying path. A couple of quick examples:
A fabulous home in Boston or anywhere in New England may be built of brick.
Here, a brick house is seldom seen because of earthquakes – we need our houses to move and bricks are not usually too good at that!
I mention these two upfront because well intentioned friends and relatives may want to stress the importance of this or that in a property – and it may simply not apply here. (Please see article: Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley) If you are non-native to the San Francisco Bay Area, you may have assumptions about construction or architecture that may not work here. Please just be aware of that possibility.
2. Understand the importance of hyper local factors on the market value of a property
Schools can be a main driver for home values in the luxury market as all other segments. Home buyers may not know that the town or city boundaries are usually irrelevant to school district boundaries. Here are a few examples:
In Saratoga there are 3 high school districts and 4 elementary school districts. Before buying anywhere in Saratoga, then, you’ll want to know which district is which and where you’re buying. If you want to utilize private schools, you may be delighted to find that you can buy more house for your money in one area of this lovely city than another. Or you may want one school area over another for any number of reasons.
In Los Gatos there are 2 high school districts and 3 elementary school districts.
In the Almaden Valley area of San Jose, there are 3 high school districts and 3 elementary school districts
Often the lesser public school districts will have a lower lid on pricing than the very top districts or schools, so it’s important, when analyzing the pricing of an estate home, to factor in the weight of the school. (more…)
Even though the public cannot visit Koko and Ndume (talk about your “gated community”!), it’s been nice to know that they are around and that wonderful work with inter species communication is going on. Once our economy recovers from this great recession, the Gorilla Foundation hopes to finish obtaining the funds to make the move possible for these beautiful animals and the work of the foundation.
There are many ways to help (donating of course, but not exclusively that way!) If you’d like to help, please check out the foundation’s website at Koko.org, or use this direct link: http://www.koko.org/friends/donate_other_ways.koko.html.
Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES
Christie's International Real Estate Sereno, Los Gatos, CA 95030 408 204-7673 Mary@PopeHandy.com License# 01153805
Clair Handy, Realtor
Christie's International Real Estate Sereno 214 Los Gatos-Saratoga Rd Los Gatos, CA 95030 ClairHandy@sereno.com License# 02153633
Mary & Clair sell homes throughout Silicon Valley: Santa Clara County, San Mateo County, and Santa Cruz County. with a special focus on: San Jose, Los Gatos, Saratoga, Campbell, Almaden Valley, Cambrian Park.
Mary Pope-Handy, Realtor ABR, AHWD, CIPS, CRS, SRES Christie's International Real Estate Sereno DRE License #01153805 408-204-7673 email@example.com “Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Clair Handy, Realtor, GREEN Christie's International Real Estate Sereno DRE License #02153633 408-721-6160 firstname.lastname@example.org “Helping nice folks to buy and sell homes in Silicon Valley”
This is the Valley of Heart's Delight blog , covering Silicon Valley real estate - Santa Clara County, San Jose, Los Gatos, Cupertino, and nearby communities in the South Bay Area and lower Peninsula. Find info on neighborhoods, disclosure issues, buyer and seller tips, and housing market conditions in the west valley and most of the county.Please also see my other websites and real estate market statistics site, which are listed in the sidebar, above.
Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES Sereno DRE License #01153805 408-204-7673 email@example.com
“Helping nice folks to buy and sell homes in Silicon Valley since 1993”
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