Short sales are plummeting in San Jose and Santa Clara County

This evening I had a look at our multiple listing service, which for the Silicon Valley area is MLSListings.com, to get a sense of what’s happening with the short sale market here.

I was shocked at the low number of short sale houses, condos, and townhouses for sale in Santa Clara County.  Right now there are exactly 48 single family homes and condos/townhouses for sale (and not under contract or sale pending) in the county.  There are 362 pending and 154 which closed escrow in the last month. To get the absorption rate or months of inventory, we divide the solds in the last month by the for-sale number, so 154 divided by 48 and we get 3.12 months of inventory.  That is fast, but perhaps most shocking is just the low numbers involved at all.  Over the last year, there were 2372 closed short sales, on average a little under 200 per month.

This is a far cry from several years ago, where short sales seemed to be as contagious as the flu in winter.  What happened?

Lots.  First, we have a jobs recovery underway in the San Jose area, particularly in the high tech industries.  Second, we have low interest rates and improving faith that the market is recovering, and since about Feb 1 2012, we’ve had an increasingly deepening sellers real estate market in the South Bay.  That, in turn, has created rising prices and given back some equity to distressed, underwater home owners.  This third item is key: because home owners can see that the tide is turning, in many cases they also can see that if they hang on, eventually they will be in a position of equity again.  Not only that, but rents in many areas are rising rapidly too, making it possible in parts of the county to break even faster by renting out one’s home rather than parting with it for a loss.

Not everyone has it so good!  Today I had a tradesperson at my house doing some post-flood repair work.  He lives in Los Banos, where home values are down more than 80% from the peak.  We have not really seen this in Santa Clara, San Jose and nearby areas – seldom were prices down as much as half!  In Los Banos, it’s questionable whether home prices will ever catch up to the peak.  In Cupertino, Palo Alto, Sunnyvale, Mountain View and similar parts of Santa Clara County, though, home values are at or close to the peak already. (more…)

Silicon Valley Short Sales vs Regular Sales Months of Inventory

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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Is It a Buyer’s Market or a Seller’s Market in Silicon Valley?

Right now in Santa Clara County (which is the bulk of the “Silicon Valley” area), there are 3392 houses available (not under contract) and there have been 853 which have closed in the last month.  That’s 3.98 months of inventory, or a seller’s market.  (There are 2668 which are under contract, but many are short sales which may never close escrow.)  Four months of inventory for the county is pretty strong overall.

For condominiums and townhouses in Santa Clara County, there are currently 1406 on the market and 289 which have sold/closed in the last month, giving us 4.87 months of inventory, which is technically a seller’s market but is very close to a balanced market. (There are 1096 pendings.)  The average “days on market” for the solds vary from about 50 days to about 115 days, depending on whether or not it’s a distressed sale.

Whether a home is in a buyer’s or seller’s market depends largely on its location, price point and sales type.  It is easiest to sell a home which is a “regular sale” situation, harder to sell a bank owned home and hardest to sell a short sale listing.  It’s easier to sell entry level priced houses, harder to sell luxury townhouses or condominiums.

For information on your part of the Silicon Valley real estate market, please email or phone me today!

 

 

 

Real Estate Inventory & Sales in Silicon Valley’s “West Valley” Areas of Los Gatos, Saratoga, Campbell and Cambrian Park

With the massive housing correction, we saw a rise in real estate inventory which has now begun to subside, and we saw a wave of short sales and bank owned properties begin to roll through Santa Clara County.  In the “West Valley” communities of Los Gatos, Saratoga, Campbell and Cambrian Park, we have seen the impact of this to varying degrees.

Today I pulled the numbers for these four areas of Silicon Valley to see this history of inventory and pending sales over the last six years to get a year-over-year view of the market.  (Status 1 = homes available, Status 2 = homes under contract with a seller’s contingency, they might be available, Status 3 = sale pending with normal contingencies on the buyer’s side for inspections, financing, and/or appraisal, and Status 4 = all contingencies have been removed.)

 

Real-estate-inventory-los-gatos-saratoga-campbell-cambrian.jpg

 

What do these numbers reveal to us?
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Santa Teresa Real Estate Market Update & The Impact of Short Sales and Bank Owned Properties on Home Values

The Santa Teresa area of San Jose is enjoying a hopping real estate market with the number of pending sales suddenly going through the roof! (Stat below care of Altos Research, to which I have a subscription. List prices are used.)

 

Real Estate Market Chart by Altos Research www.altosresearch.com

 

Homes in this part of south San Jose are often selling over list price as inventory drops. The days on market appears slow, but a lot of homes that have been “just sitting” on the market are now selling.

 

Real Estate Market Chart by Altos Research www.altosresearch.com

 

The great rush in Santa Teresa is, of course, in response to the list prices, which have been falling steadily in most areas – and making for incredible bargains.

 

Real Estate Market Chart by Altos Research www.altosresearch.com

 

Here are the August sales stats for our MLS “area 2”, Santa Teresa (per the REReport, also a subscription, which uses closed sales):

 

Trends At a GlanceAug 2009Previous MonthYear-over Year
Median Price$540,000$500,000 (+8.0%)$550,000 (-1.8%)
Average Price$509,007$506,200 (+0.6%)$565,476 (-10.0%)
No. of Sales1517 (-11.8%)25 (-40.0%)
Pending Properties7547 (+59.6%)35 (+114.3%)
Active1734 (-50.0%)138 (-87.7%)
Sale vs. List Price100.5%101.4% (-0.9%)99.0% (+1.5%)
Days on Market7360 (+21.6%)58 (+26.3%)

 

With more pending sales than active ones, you can see that most houses are now selling and the pace is quickening.  A major player in the market conditions of this part of San Jose is the situation with distressed properties: foreclosures, short sales or homes sold under pressure as they’ve got a notice of default on the property.

How big an impact does the REO or short sale label have on a home’s eventual sales price? How much more or less will a home sell for based on the situation as a “regular sale” or “bank owned” or “short sale”?
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What Is Going On With Silicon Valley Short Sales?

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:

 

3/26/20085/18/20087/19/20089/18/2008
Los Gatos5879
Monte Sereno1001
Saratoga0143
Los Gatos Mtns3230
Cambrian Park59636849
Santa Clara56636975
Campbell13192320
Cupertino1101
Los Altos0210
Sunnyvale50585148
Blossom Valley196217190177
San Jose (all)1534177717081578

 

To read the entire post, please continue on to Silicon Valley Short Sale Snapshot.