Silicon Valley Real Estate Market Watch

October 2016 | Market Watch

market-watch-oct_september

For Chinese Investors, California Dreamin’ Is Becoming a Reality

Chinese investment in the U.S. – especially in California – is surging again this year and is on pace to break records, according to a new report. From high-tech firms to entertainment companies to commercial and residential real estate, Chinese companies and individuals are pouring more and more capital into the Golden State.

All told, Chinese companies plowed a record $15 billion last year in the U.S. and that figure could more than double in 2016, according to research firm Rhodium Group and the National Committee on US-China Relations and reported in Yahoo Finance.

“California, especially the San Francisco Bay Area and Los Angeles, has been at the forefront of China’s appetite to invest overseas, with billions of dollars going into the technology, renewable energy and entertainment sectors, and increasingly into real estate,” Yahoo stated. “China has pumped $8 billion into California businesses since 2000, more than in any other state.”

One sector increasingly on the Chinese shopping list in the US is real estate, Yahoo noted, with home shoppers snapping up expensive homes and high-end commercial properties at a record pace. Chinese investors shelled out nearly $11 billion in US real estate in the first five months of 2016, far surpassing last year’s total of $4.37 billion, according to a report by real estate firm Cushman & Wakefield.

The research shows that the West Coast has proven a major draw with Chinese investments, literally changing the skylines of downtown Los Angeles and San Francisco. In San Francisco, Beijing-based Oceanwide Holdings has acquired land that will house the city’s second-tallest tower, and several other Chinese-backed developments are being planned.

Residential property is also part of the real estate buying spree, with sales more than doubling in the last three years to $27.3 billion this year, Danielle Hale, an analyst with the National Association of REALTORS®, told Yahoo. Roughly one third of those home purchasers found their way to California, more than to any other US state, she said.

Yahoo notes that the buying frenzy is showing no signs of abating, despite volatility in China’s economy and mounting rhetoric during the US presidential campaign. While the political climate isn’t helping, Yahoo says cities across America are welcoming Chinese investments with open arms, drowning out the campaign rhetoric and anti-China sentiment in Congress.

Below is a market-by-market report from our Silicon Valley offices:

Cupertino – Open house activity was slow, but sales were brisk, report our co-workers. It’s challenging to make predictions in this market, they lament.

Los Altos – Our co-workers say that continued signs of our seasonal adjustments are evident with an increase in inventory as we move it the fall.  New inventory has spiked.  This increase in inventory has had a direct impact on those homes which had been “lingering” on the market, and co-workers have seen additional price reductions on homes with higher than average DOMs. Agents there are still seeing sellers wishing to “test the market” by bringing their homes on at higher prices than previous sales and pendings.  However, this pricing strategy has proved to be risking, our local broker point outs, given that many home shoppers expectations are that they will still need to offer over the asking.  As a result of this type of pricing strategy our co-workers are seeing a “self-fulfilling prophecy” with these homes having little to no activity. The homes end up stagnant and linger on the market, eventually having to lower their price to generate activity. To the contrary, there has been strong activity with properties in move-in condition and priced to sell.  These homes are still receiving multiple offers that typically achieve a sales price that is over asking sale.  This was the case with one of our recent listings, which had 24 offers.  In short, the increase of homes coming on the market are being absorbed rather quickly as our market is still strong.

San Jose Almaden – According to our co-workers at this location, there was a spike in sales over the past two weeks with not as many multiple offers.  Homes are staying on the market longer as well.  Homes are going into contract very close to list price or under, especially on higher priced homes (+ $1,000,000).  

Almaden – This area has had an average sale price of $1,263,000, 13.5% under the average list price.  

Blossom Valley – The average sales price is $689,000, 6% under the average list price.  

Cambrian – This area has had an average sales price of $960,000

Santa Teresa – The average sales price is $750,000; therefore Cambrian and Santa Teresa are both under the average list price by 6.5% and 2% respectively.  As usual, list price is more important than ever unless you want your listing to remain active for a very long time.

Willow Glen – The active listing inventory continues to contract, our local broker reports. Inventory is down to the mid 60’s of active units. Listing inventory has decreased from the mid 90’s just a few months ago to the mid 60’s. Listings that had languished on the market in all price points have sold. Most sales are coming in at list price or below and home purchasers are negotiating repairs and credits from the seller.

Saratoga – Our co-workers report active inventory as the exact same as this time last year with 74 properties listed. Days on market (DOM) are up slightly from this time last year when it was 22 DOM compared to now when it is 28 DOM. There has been an uptick in the local high-end market in sales.


September 2016 | Market Watch

Market watch September

Coldwell Banker Taking Smart Home Technology to Next Level With First-Ever Smart Home Staging Kit

Smart home technology has been catching on in a big way in recent years. A consumer poll by Coldwell Banker found that home shoppers would pay more for smart homes and that those properties would sell faster, provided that the smart home features are installed before move-in.

Now, Coldwell Banker – the original Silicon Valley real estate start-up – is taking that trend to a whole new level. Our company has announced that it has signed a supplier agreement with Worthington Group, Ltd., to directly supply the industry’s first Smart Home Staging Kit directly to sellers who list their homes with Coldwell Banker.

The Smart Home Staging Kit allows participating sellers to enhance their homes and meet the guidelines of the newly released Smart Home Definition that was jointly developed by Coldwell Banker and CNET, the leading online technology reviewer. Coldwell Banker sales associates and brokers will market qualified properties as a Smart Home bearing a Smart Home icon on the listing and inclusion on the brand’s smart home resource site, coldwellbanker.com/smarthome.

Available on SmartHomeStaging.com, the kit will include:

  • Nest Learning Thermostat
  • Nest Protect smoke and carbon monoxide (CO) alarm
  • Nest Cam Indoor security camera
  • August Smart Lock
  • August Connect
  • Lutron® Caséta® Wireless Lighting Starter Kit

Products can be purchased as a complete kit directly from Worthington Group or separately as individual items. Worthington is offering clients of the Coldwell Banker brand’s affiliated sales associates a promotional rate of $999 for the complete kit. On SmartHomeStaging.com, consumers can also opt-in for installation by Pro.com service providers or elect other service providers of their choice.

A recent survey conducted by Coldwell Banker found that roughly half of Millennials and 42 percent of U.S. broadband households surveyed would “smart stage” their home to attract home shoppers. The survey also found that more than one-third of Americans now associate smart home technology with a move-in ready home — something that 71 percent of Americans would want if buying a house today.

“Smart Home technology is a consumer driven movement,” said Sean Blankenship, chief marketing officer of Coldwell Banker Real Estate LLC. “Our research confirms this technology has a positive influence in the appeal of a home -– and agents agree. Our homes, like cars, are providing convenience and a sense of security like never before.  We want to bring the two together for our customers.”

The Smart Home Staging Kit is also available for home purchasers and homeowners who wish to upgrade their homes.

Below is a market-by-market report from our local Silicon Valley offices:

Cupertino – Things are definitely taking a breather before Labor Day, according to our coworkers at this office. Homes that are well priced and in the top schools are still hot. Proximity to the new Apple Spaceship is a huge draw.

Los Altos – Our coworkers reported continued signs of our seasonal adjustments with an increase in inventory as the summer vacation season comes to a close and school reopens.  The anticipated spike in new inventory has happened.  This increase in inventory has had a direct impact on those homes which had been “lingering” on the market and we have seen additional price reductions on homes with higher than average DOMs.  The market remains robust with strong activity on properties in move in condition and priced to sell, resulting in multiple offers that typically achieve a sale price that is over asking price.  Fewer sellers wish to “test the market,” by bringing their homes on the market at higher prices than previous sales and pendings.   In short, the increase of homes coming on the market are being absorbed rather quickly. The luxury market (homes priced over $3.5M) is steady with days on market increasing and frenzy bidding or multiple offers being the exception as opposed to the rule.

San Jose Almaden – Coworkers have seen a little bit of an uptick in listings with the start of the school year.  

Almaden – The average sales price for is at $1,325,000, which is down 6% from last month but up 5% from August of 2015.  

Blossom Valley’s – average sales price is $694,000, down 5% from last month but up 4% from the same time last year.  

Cambrian – average sale price of $1,016,000, up 7% from last month and up 10% from August of 2015.  

Santa Teresa – has an average sales price of $740,000, up 2% from last month and flat from last year at the same time.

San Jose Main – This office reports sales are keeping pace with inventory as homes that are priced at or just below current market are getting all the attention.  Price is so important in today’s market and just a tad over market scares home shoppers away.  More than once coworkers have seen price reductions to market of just below and then a flurry of activity occurs.  Home shoppers want to take advantage of the historically low interest rates and not risk higher payments.  Pricing in this market is becoming very crucial and sellers are advised to not hope for a less than asking price offer if they list their house at above market pricing.

Saratoga – has slightly fewer listings than last year at this time, and our coworkers report a steady luxury market.

August 2016 | Market Watch

August market watch

Bay Area Luxury Market Showing Signs of Leveling Off

The Bay Area’s luxury housing market, which has been soaring for the past year or more, is finally showing some signs of leveling off as summer rolls on. While there are no indications that the high-end market is reversing course, even a move back to a more normal balanced market could provide welcome relief for frustrated home shoppers in this very competitive marketplace.

San Francisco’s luxury home prices were flat in the second quarter of 2016 while a continuing shortage of homes listed for sale led to a sales decline compared to a year ago, according to a recent market report by Coldwell Banker Residential Brokerage. The report is based on Multiple Listing Service data of all homes that sold for more than $2 million during the last quarter in San Francisco.

The median sale price in the city was $2.8 million, up from $2.7 million in the first quarter of this year but exactly the same as a year ago. Sales of luxury homes fell once again in the latest quarter compared to the same period last year. There were 211 transactions in the second quarter of 2016, down 14.9 percent from the 248 sales a year ago.

Other recent Coldwell Banker Residential Brokerage luxury market reports showed similar stories elsewhere in the Bay Area:

  • East Bay luxury sales and prices (over $1.5 million) were both relatively flat in June from year-ago levels. A total of 182 luxury homes changed hands, down 1.6 percent from June 2015. The median sale price was up 1.6 percent from a year ago, reaching $1,778,000. June’s median sale price was down fractionally from May, when it stood at $1.78 million.
  • Silicon Valley’s luxury housing market (over $2 million) saw home sales off slightly and the median sale price down fractionally compared to the same month a year ago. A total of 158 luxury properties changed hands in June, down 4.8 percent from June 2015. June’s sales total was also off from May, when it stood at 173 units. The median sale price dipped less than 1 percent from the same month last year to $2,597,500.
  • Marin County was the exception in June. There were 92 luxury sales (over $1.5 million), up 15 percent from the 80 transactions in June 2015. Meanwhile, the median sale price dipped to $1,957,500, a 6.6 percent decline from a year ago. Last month’s median price was also down from May’s $2.3 million price.

Reports from our fellow offices show a little more inventory coming on the market and homes taking a while longer to sell, especially if they aren’t in move-in condition, in the best locations, or priced appropriately. Home purchasers are becoming more selective, and properties that sell with a large number of multiple offers is the exception instead of the rule these days.

But make no mistake: The Bay Area’s luxury housing market ­– like the overall market – remains quite strong and healthy. And in fact, it is still a seller’s market in many communities. But more recently the pendulum has started swinging back towards a more balanced market between home purchasers and sellers.

We’ll see if this trends continues in the weeks and months ahead. But if it does, it’s not bad news at all. A more balanced housing market would be much healthier and sustainable for the market over the long run. And that can only be good for house shoppers and sellers.

Below is a market-by-market report from our local Silicon Valley offices:

Cupertino – Open houses are more sparsely attended than before, reports our co-worker. Contingent offers even have a chance. The market has definitely shifted in favor of the house shoppers.

Los Altos – Our co-worker says there are signs of seasonal adjustments with an increase in inventory as the summer vacation season comes to a close and school reopens next week.  They are anticipating a spike in new inventory coming on the market and will have a direct impact on those homes that have been “lingering” on the market. They suspect to see additional price reductions on homes with higher than average DOMs.  They still categorize the market as robust and are seeing strong activity on properties in move in condition and priced to sell, resulting in multiple offers that typically achieve a sale price that is over asking sale.  They expect any increase of home listings will be absorbed quickly as our market is still strong.

Los Gatos – The luxury market over $3.5 million is steady but flat. There continues to be high demand for properties in under $2 million.  The market over $2 million is softening and our coworkers are even starting to see some price reductions in the over $2 million market.

San Jose Almaden – Our coworkers say it’s more of the same with inventory increasing and less units being sold compared to the same time last year.  We’re still seeing multiple offers but not as many offers per listing and prices coming in closer to list price than way over list.  

Santa Clara County – Available inventory is at the same number as September of 2014.  

San Jose Main – Our coworkers note that the market is stabilizing as both sales and new listings are on a little slower pace.  Sellers must be cautious when pricing homes and not price over market.  Days on market is starting to creep up as some sellers priced their homes too high and home shoppers are not interested.  We are seeing more homes withdrawing from the market.  With interest rates still at record lows, home shoppers are taking advantage of the homes priced right.  As the summer ends and families sneak in the last of summer vacations combined with school starting in the next few weeks the market activity could begin to slow down for the next 3-6 weeks.

Willow Glen – active listing inventory has been on the rise the last two weeks and is near 100 active units, another high water mark for the year. The market has picked up some steam with busy open house traffic with lots of new inventory for house shoppers to look through. Homes well priced are selling quickly typically within the first week on being on the market. After the first week of open house offers are being reviewed with multiple offers on most homes. The pre-emptive offer is back as aggressive coworkers try to get an offer in front of a seller prior to the review date or open house weekend. No dog days of summer slowdown is in sight for the month of August, our local coworkers say.

July 2016 | Market Watch

Silicon Valley Market Watch (4)

International Buyers Continue to Snap Up U.S. Real Estate

The National Association of REALTORS® is out with its latest international home shopper study and it confirms that the appetite for U.S. real estate continues to flourish. The number of sales to foreign purchasers rose once again over the past year, although international shoppers are shifting their sights from luxury homes to less-pricey properties. Additionally, sales to recent immigrant foreigners are on the rise while non-resident purchasers are cooling a bit.

NAR economists think the change in the price of homes international purchasers are after may be due to overall higher home prices, along with a stronger U.S. dollar, which both cost foreign shoppers more these days.

“Weaker economic growth throughout the world, devalued foreign currencies and financial market turbulence” all had an impact on foreign shoppers over the past year, said Lawrence Yun, NAR’s chief economist.  “While these obstacles led to a cool down in sales from nonresident foreign shoppers, the purchases by recent immigrant foreigners rose, resulting in the overall sales dollar volume still being the second highest since 2009.”

Foreign shoppers purchased $102.6 billion of residential property in the U.S. between April 2015 and March 2016, according to NAR’s report. The number of properties purchased rose 2.8 percent to 214,885. The value of homes bought by foreigners was typically higher than the median price of all U.S. homes.

Experts say a slight drop in dollar volume is due to the types of properties purchased, and the locations of those properties. There are signs that foreign shoppers have begun looking beyond higher-priced markets like San Francisco and New York to purchase properties in smaller, less-expensive cities in the Southeast and Midwest.

Chinese purchasers continued to outpace all others, with their dollar volume exceeding the total of the next four ranked countries combined. Their dollar volume of sales, at $27.3 billion, was three times as much as Canadian buyers, who were ranked second. Chinese purchasers also bought the most expensive homes at a median price of $542,084.

Five states accounted for half of foreign shopper purchases, according to the NAR report: Florida, (22 percent), California (15 percent), Texas (10 percent), Arizona and New York (each at 4 percent).

Below is a market-by-market report from our local Silicon Valley offices:

Cupertino – Things have been surprisingly active in the area considering the heat, vacations, and the holiday week, our local manager notes. The Previews luxury market has been improving as well.

Los Gatos – The active inventory is at the same level (88) as it was this time last year.  The average sales price Los Gatos is up 12% from the same time last year.

San Jose Almaden – Our co-workers say it seems the market is in a “summer slowdown” with a lower number of multiple offers and prices still higher than last year but not much higher (or in one case lower) than the previous month.  

Santa Clara County – Inventory in has been increasing as well although it is down from last week due to the 4th of July holiday.  Current inventory in SCC is at 1,681 SFR & C/T, down 50 from last week but up 352 from this time last year.  

Almaden – The median sales price is $1,365,000, up 8.8% from last month and 9.2% from June 2015.  Inventory is at the highest level since July 2013.  

Blossom Valley – The median home price is $713,500, down 9.3% from last month and up 6.5% from June 2015.  Inventory is down 12 from last month.  

Cambrian – The median home price is $1,000,000, just up 1.1% from last month but 12.4% from June last year.  Inventory is up 7% from last month.  

Santa Teresa – Median home price is $773,000, up 3.5% from last month and 12.1% from last year.  Inventory for Santa Teresa is down 16.7%.

Willow Glen – The anticipated July 4th week slowdown just didn’t materialize in the market. Listing inventory remained steady at 90 plus units, and our co-workers are expecting new inventory to increase after the July 4th week. The sales activity and open house traffic was much stronger than many had expected. We had several homes go into contract the past two weeks along with a few that were languishing on the market after recent price reductions they went into contract as well. The next two weeks post 4th of July should be interesting as we move into the end of summer Aug. market. The one metric that is most important is growth or reduction in new active listing inventory counts and consumption rates of that inventory.  

Saratoga – In the market the average sales price is up 10% from the same time last year.  Active inventory in the Saratoga market is 71 properties, which is 3% down from the same time last year. The higher-end market has slowed slightly, our manager reports.

June 2016 | Market Watch

Silicon Valley Market Watch (4)

Bay Area Home Prices Hit Post-Recession Record High

The median sale price for all homes in the nine-county Bay Area hit a new record high last month at $686,000, according to a new report by CoreLogic, the Irvine-based real estate information services firm. That price surpassed the previous record high of $665,000 reached in June and July of 2007.

The median price in April was up 5.5 percent compared to March and up 4.1 percent year over year from $659,000 in April 2015. CoreLogic notes that an increase in the median sale price between March and April in the Bay Area is normal, with the average change between those two months of 2.5 percent. The median sale price has risen year over year for 49 consecutive months

“Three of the San Francisco Bay Area’s nine counties – Alameda, San Francisco and Santa Clara – posted record median sale prices in April,” said Andrew LePage, research analyst with CoreLogic. “The medians in Marin and San Mateo counties hovered just below record levels last month, while medians in the remaining four counties were about 13 to 27 percent below their peaks.”

Meanwhile, home sales continued to be challenged by low inventory last month. A total of 7,518 new and resale houses and condominiums sold in the Bay Area in April, up 7.7 percent month over month from March but down 7.3 percent year over year from April 2015

“It’s no surprise that in a month when the San Francisco Bay Area’s median home sale price hit a record high the region also logged a year-over-year decline in sales, which remained well below the long-term average,” said LePage.

“Low mortgage rates, job growth and other drivers have stoked demand, but the supply of homes for sale – especially in the low-to-middle price ranges – hasn’t kept pace, leaving many would-be home purchasers struggling with a thin and increasingly expensive inventory.”

Home sales of $500,000 or more accounted for 69.7 percent of all sales in April, up from 66.3 percent in March and up from 65.5 percent in April 2015. The April 2016 $500,000-plus share was the highest since August 2007 when it was 72.1 percent, CoreLogic noted.

Below is a market-by-market report from our local Silicon Valley offices:

Cupertino – Open houses and general activity is still good, reports our co-worker. In most cases homes are not getting the number of multiple offers they would have received a month ago. This is typical for this time of year, when the focus may shift to graduations, weddings and vacations.

Los Altos – Our co-worker says Inventory has increased recently, however, so have the number of pending sales. And although this office has seen a slight slowing of market activity recently, our co-workers there would still categorize the market as robust. There is strong activity on properties in move in condition and priced to sell, resulting in multiple offers that typically achieve a sale price that is over asking sale. That being said some sellers are wishing to test the market by bringing their homes on to the market at higher prices than previous sales and pendings. As a result, there are more price adjustments of late, but these still only make up a smaller percentage of the market. In short, the market is strong but just experiencing normal supply and demand fluctuations. The luxury market (homes priced over $3.5M) is steady but, flat. Days on market have increased and frenzy bidding or multiple offers being the exception as opposed to the rule.

Los Gatos – Our office notes that home purchasers are getting a slight reprieve as more inventory hits the market. Still very competitive in the under $2 million price point.

San Jose Almaden – Our co-workers say inventory is creeping up and they’re still seeing multiple offers although not as many as previous months.

Santa Clara County – The average sales price for May in was $1,225,000 which is up 8.5% from last year.

Almaden – average sales price for the month is $1,259,000 which is down 7% from last year.

Blossom Valley – The average sales price in May has been $727,000 in which is up 12% from May of 2015.

Cambrian – The average sales price in so far for May is $1,026,000 which is up 11% from May of 2015.

Santa Teresa – And the average sales price so far for the month of May in is $754,000 which is up 5% from last year.

San Jose Main – Our office manager reports inventory continues to increase, however it’s still below the average of the past 10 years. Home shoppers are picky and houses just a tad over-priced will continue to sit. Interest rates are excellent and shoppers are stretching to get the house they want. Even with increasing inventory it is a competitive market with many properties still seeing multiple offers.

Willow Glen – The local market continues to see active listing inventory increase week over week. The market has surpassed the 100-unit mark, which is a three year high for active listing inventory for this area. It’s still a tale of two markets; some homes are sitting with low open house traffic while others are very busy. It appears to be price point driven; homes under the $850,000 price point are still drawing lots of attention and multiple offers. One listing at this price point drew 10 offers with the property in contract well over $900,000.

April 2016 | Market Watch

Silicon Valley Market Watch (4)

Noted Housing Analyst Robert Shiller Says Market Not in a Bubble

Nobel Prize–winning economist Robert Shiller, co-creator of the S&P/Case Shiller Index, says home values in 20 major U.S. cities across the country are still climbing as a tight supply helps push prices higher. But in an interview with Yahoo Finance, Shiller dismissed talk that the U.S. housing market is approaching “bubble” territory.

The S&P/Case-Shiller 20-City Composite Index rose 5.7% in January year-over-year, following a 5.6% annual gain in December. Eleven cities saw year-over-year prices climb at a faster rate in January than in December, with Portland, Seattle, and San Francisco posting double-digit annual gains. Portland led with an 11.8% year-over-year price increase, followed by Seattle with a 10.7% rise and San Francisco with a 10.5% jump.

“The price climb has been pretty steady since 2012. In a lot of cities, prices are up over 30%. I think people are cautiously optimistic,” Shiller said.

Despite the Federal Reserve’s decision in December to increase interest rates for the first time in nearly 10 years, the sustained growth in home prices has shown no signs of easing, Yahoo reported. And while “skyrocketing prices” have sparked some talk that the housing market could be approaching bubble territory, Shiller says there’s still some room for prices to run.

“It’s not bubble territory yet, but bubbles are always a possibility,” said Shiller. “Right now we’re sitting where we were in 2003, and that developed over the next three years into quite a bubble.” Yahoo noted that by 2006, there were more than 1.2 million foreclosure filings, a rate of one foreclosure filing for every 92 U.S. households nationwide.

Taking a look at the broader picture, Shiller said that he’s concerned about recent volatility and declines in U.S. stocks and overseas markets. He warns that further weakness could lead to a loss of confidence and cause investors to develop a “wait-and-see attitude.” Shiller added that he’s also keeping an eye on the recent plunge in oil prices, saying it would be “worrisome if these fears return.”

Below is a market-by-market report from our local Silicon Valley offices in the San Francisco Bay Area:

Cupertino – Although inventory dipped a bit due to the Easter holiday, the area activity has definitely increased, reports our local manager. If the Cupertino/Sunnyvale tour is any indication, a lot more homes should be hitting the market.

Los Gatos – Our co-workers are seeing an influx of multiple offers as more properties are hitting the market. The Previews luxury market remains strong and steady.

San Jose – The market is still tight and homes priced right, i.e. at the current market as opposed to 3-5% higher than market, are selling quickly and some with multiple offers.  Some sellers who see increasing sales prices and try to price at the next high sales price end up sitting on the market as shoppers are not biting at the higher priced homes.  People looking to buy seem more willing to pay over list price with multiple offers as opposed to being the only offer at an originally listed higher priced home.  Bottom line shoppers are educated and although interest rates are still great you need to actually qualify for a loan and lending requirements and standards are still strong.

Willow Glen – listing inventory is like a roller coaster ride ­– one week active listings are up, the next week the number is down. The market seems to be holding steady around the mid 50 count. Is this sufficient active listing inventory to meet purchaser demand? The market is telling us no. Properties go active, hold one open house over the weekend, and then they are typically in contract with multiple offers well over asking the following week.

Saratoga – Our manager say across the valley agents are seeing homes just under a million selling quickly.  Those that are in the upper price range for their particular market linger longer. People looking to buy are hot for properties priced right.  But they will not allow sellers to stretch up to 10% more than what the market will bear.

 

March 2016 | Market Watch

Silicon Valley Market Watch (3)

Bay Area Home Sales Hit Three-Year High for January

Home sales in the Bay Area started out the new year with a bang, hitting their highest level in three years for the month of January, according to a new report by CoreLogic, the Irvine-based real estate information firm.

A total of 4,845 new and existing houses and condos sold in the nine-county region last month, up 7.1 percent from a year ago. However, sales were off 38 percent from December’s level. A significant drop from December to January is typical as many home shoppers try to close on the sale before year-end.

Sonoma, San Francisco and Alameda counties led the way in January with double-digit sales increases year-over-year. Sonoma County was up 19.6 percent, San Francisco up 16.2 percent, and Alameda up 14 percent. Napa County saw an 11.3 percent increase, San Mateo 7.8 percent, Marin 5.4 percent, Solano 3.7 percent, Santa Clara 1.8 percent, and Contra Costa 0.7 percent.

The inventory shortage we have been grappling with pushed home prices up sharply once again last month with the median sale price surging 15.4 percent in January from a year ago to reach $625,500. The biggest increase was in San Francisco, where the median sale price spiked 32.3 percent to $1,166,750. Alameda County followed with a 21 percent increase in the median price to reach $635,250.

Andrew LePage, research analyst with CoreLogic, said volatility in the financial markets could provide some headwinds to the market in the short term, particularly in the luxury segment of the market.

“History suggests that high-end home sales could be affected by the recent stock market downturn, reversing the so-called ‘wealthy effect,’ which would undermine the demand for luxury homes if the stock market continues to weaken,” he said.

But for now, the Bay Area housing market – including the Previews luxury segment – still appears to be very much a seller’s market with plenty of buyers competing for far too few listings. We’ll see what happens in the weeks ahead as (hopefully) more supply finally comes online.

Below is a market-by-market report from our local San Francisco Bay Area offices:

Silicon Valley –

Cupertino – It feels like things are about to start happening, says our co-worker. Open houses were crazy busy, in some cases 100-200 visitors, even without newspaper advertising.

Los Altos – inventory is still down compared to previous years. Homes under $2.6M are the hottest segment, most selling within one week, and virtually all in less than 1 month. Each home under $2.6M is receiving multiple offers, and although the final sales price is over the list, these prices are off their highs of last year, at least so far. In the condo market there is nothing under $1.2M, and so our current inventory is less than 1 month. The market is still hot with a plethora of people seeking to purchase, for all homes priced under $4M.

Los Altos Hills – inventory is average compared to previous years; however, very few high-end homes (over $4.2M) are selling. Homes under $4M are not selling at the frenzy pace of Los Altos

Mountain View – negotiations are more traditional. Those looking to buy are seeking properties that are in move in condition (or at least livable) at the $3M range. The market for homes above $5M is slow with very few shoppers. Inventory has been consistently low and down from previous years.

Sunnyvale – inventory is down, with a very fast market time of 1 week for both homes and condo/townhouses, and they are selling with multiple offers.

Los Gatos – Home shoppers are excited as more inventory begins to hit the market.

San Jose Almaden – Listings and sales are certainly increasing in the area while prices are a little bit up and down compared to last year in February as well as last month.  

Almaden – has had an average sales price of $1,279,000, which is down 18% from last year in February but up 9% from last month.  

Blossom Valley – has an average sales price of $658,000, which is up 7% from last year in February and up 4% from last month.  

Cambrian – has an average sales price of $912,000 for the month of February, which is up 14% from last year in February but down 11% from last month.

San Jose – As always home shoppers need to focus on what area and neighborhood they want to live in and when the right house comes up for sale they need to act quickly, our co-worker notes.  Inventory remains very low, as shoppers are keeping pace as new homes come to market.  Interest rates remain aggressive, so that is keeping the demand in the buying mindset.  The economy is doing great and that is stimulating home shoppers as well.

Willow Glen – The local market has come back to life post Super Bowl week. The anticipated new active listing inventory is coming. Our office had 9 new active listings for the week, bringing them up to 37 units, just shy of where they were at this time last year. Open houses are packed with strong demand. Most homes are going into contract after just one open house weekend then the following week offers are reviewed.


 

February 2016 | Market Watch

NL_Silicon Valley Market Watch (3)

Bay Area has three of Five Most “Profitable” Housing Markets in America

Ok, by now it’s probably not surprising that Bay Area housing is a whole lot more pricey than real estate elsewhere in the country. But at the same time, an argument can be made that it’s also one of the best long-term investments when compared to other housing markets in America. That’s the finding of a new analysis by real estate analytics firm RealtyTrac, reported recently by MarketWatch.

RealtyTrac reported that San Mateo County, Alameda County and Santa Clara County ranked 1-2-3 in the top five most “profitable” housing markets in America. And yes, there were some outside the Bay Area as well. Middlesex County, New Jersey, and Multnomah County, near Portland, Oregon finished fourth and fifth.

The analysis found that home sellers in San Mateo County saw a 65% difference ($388,000, on average) between the price they paid for their homes when they bought them and what they sold them for in 2015.

The main reason people selling in San Mateo saw such large profits is that the county is a popular housing market for Silicon Valley tech executives and high-paid employees, RealtyTrac noted. The city of San Mateo itself is a short drive from the headquarters of Google parent Alphabet, Facebook and Oracle, just to name a few tech titans.

In Alameda County, people selling saw a 64% difference between the price paid for their homes for and what they sold them for in 2015, walking away with $246,000 on average. The East Bay has benefited in recent years from an influx of people seeking to buy, who have been priced out of San Francisco and Silicon Valley housing markets.

Santa Clara County came in right behind its neighbors to the north and the east in the analysis. Those selling their home took an average profit of $315,000, with a 63% difference between their buy and sell prices. Middlesex County, New Jersey, and Multnomah County, Oregon, followed with a 52% and 49% profit, respectively.

These big price gains come as home prices nationwide are on the rise with nearly 40% of the real-estate markets in the U.S. hitting new home-price peaks in 2015, RealtyTrac found.

But the Bay Area counties far outpaced gains in the rest of the country. For the U.S. as a whole, RealtyTrac says people selling in 2015 realized an 11% gain (or an average of $20,378 profit) in sale price compared with purchase price.

Below is a market-by-market report from our local offices:

Cupertino Activity has finally picked up in the area, thanks mostly to more listings hitting the market. The few open houses held have been packed.

San Jose Almaden – More listings are coming to market in the area, yet we’re still seeing multiple offers. 

Almaden – sales were slower in January with only 16 compared to December and January of 2015, which had 27 each. 

Blossom Valley – sales were slower in January as well with 60 sales compared to 83 last month.  Yet sales were up by 16 compared to January of last year (44). 

Cambrian – sales were at 32 for the month of January, which is down 46 from last month (78) but flat for January of 2015.

Willow Glen – There is a Super Bowl buzz in the area. Active listing inventory is starting to trickle in. Our office had 9 new listings come to the market this past week with several colleagues announcing new inventory coming post Super Bowl weekend.  The few open house are jammed with pent-up demand, and most are going into contract after just one weekend open house. Multiple offers well over list is the norm.  

Saratoga – Very little inventory is dampening sales activity in the area. All offers are multiple.


 

 

January 2016 | Market Watch

Silicon Valley Market Watch (2)

San Francisco and San Jose Top List of Hottest Housing Markets in December

The San Francisco Bay Area was well represented in Realtor.com’s December ranking of the hottest housing markets in the U.S. with the San Francisco metro area and the San Jose metro area finishing 1st and 2nd in the report. And the Santa Rosa metro area came in at #8. It was the second straight month that San Francisco and San Jose came in at one and two.

Jonathan Smoke, chief economist of Realtor.com, and his team carried out the data analysis and identified the top 20 medium-to-large markets where homes are moving fastest and interest (based on listing views on Realtor.com) is highest.

“While California closed out our latest ranking still firmly in control of the hottest markets, the Midwest and Florida are both seeing substantial improvement,” said Mr. Smoke. “Pent-up demand and robust economic growth combined with limited supply will keep California tight in 2016, but more markets will challenge them as demand improves elsewhere.”

A few markets that are new to the hot list this month are Tampa, FL; Fort Wayne, IN; and Midland, TX. Realtor.com said these markets typically represent a greater metro area, since people might work in a city but reside in a nearby suburb. For example, San Francisco also includes Oakland and Hayward while San Jose includes Sunnyvale and Santa Clara.

On the whole, the hottest markets receive about 1.4 to 2.9 times the number of views per listing compared with the national average. Their homes move off market 29 to 51 days more quickly than the rest of the U.S., and they have also seen days on market drop by a combined average of 15% year over year.

Below is a market-by-market report from our Silicon Valley / San Francisco Bay Area local offices:

Los Gatos – Competition for homes continues.  Inventory is down 25% from the same time period as last year.

San Jose (Main) With the Holidays here the seasonal slowdown in activity is likely to be in effect until the beginning of January, says our co-worker at the San Jose office.  However there are many sellers who have newly decided to list, but are waiting for the first or second week of January to come on the market.  He expects to see an increase in inventory in January but with the many people looking to buy in the market the increase in inventory could result in an equal amount of increased sales and therefore inventory levels will remain low.

Willow Glen – As expected, the market is in full holiday mode, according to our local Willow Glen manager. Listing inventory continues to decrease with the high 20’s for active listings. Sales activity has come to a crawl. This trend will probably continue as we move forward into the beginning of the New Year. One thing is certain: the market will be hungry for new inventory as we move deeper into 2016.


 

 

December 2015 | Market Watch

Silicon Valley Market Watch (1)

Bay Area Home Sales Cool Off While Prices Keep Moving Higher

A continuing shortage of homes on the market may be the primary reason why Bay Area home sales declined in October compared to a year ago, the first year-over-year drop in sales since February. But the limited number of homes on the market has also kept home price moving higher as we edge closer to yearend.

CoreLogic, the real estate information firm, reported that that there were 7,673 new and existing home sales in October (the most recent figures available). That’s down 2.4 percent from September and 2.5 percent from October 2015 – the first YOY drop in eight months.

Napa County had the biggest YOY decline at 23.6 percent, although the small number (just 94 sales) may have exaggerated the decline. Elsewhere, San Francisco home sales were off 9.7 percent, Santa Clara County -8.8 percent, San Mateo County -8.5 percent, and Alameda County -8.2 percent.

“This decline could be the result of lower affordability and also a still-tight inventory of homes for sale,” said Andrew LePage, research analyst with CoreLogic. But he noted that sales did increase in some of the Bay Area inland areas, home to the region’s most affordable homes.

To be sure, Sonoma County had the biggest increase in sales at 14 percent, followed by Solano County at 9.7 percent, and Contra Costa County at 8.2 percent. Marin County was the only other county with an increase in YOY sales, up fractionally at 0.6 percent.

The average Bay Area sale price continued to move higher in October, rising 4.3 percent from a year ago to stand at $635,000.

All Bay Area counties saw an increase in median prices, led by Alameda County with a 13.8 percent boost to $632,500. Napa County recorded a 13.4 percent rise to $567,000 and Solano County had a 13.2 percent increase to $339,750. Santa Clara, San Francisco, and San Mateo counties all had double-digit percent increases in the median prices.

Below is a market-by-market report from our local Silicon Valley offices:

Cupertino – Our co-worker says inventory continues to drop. There is lots of interest, but nothing to sell. There have been a few homes for sale that were on the market for months before suddenly getting multiple offers.

Los Altos – The area’s market has picked up steam again. Properties that were sitting are now going under contract.

San Jose Almaden – Our office here is seeing the holiday slowdown as far as new homes coming onto the market.  They are also seeing a lot of listings coming off the market for the holidays.  Inventory (countywide) for single family residences and condo/townhouse is down 11% over the same time last year. The sales and prices are steady.

Almaden – Closing prices are up 10% over last month and 19% over November of last year.

Blossom Valley – Prices are up 3% over last month and 12.5% up over November of last year.  

Cambrian – Prices are flat from last month and up 10.5% over last year.  

Willow Glen – As expected, the number of homes available for sale continues to shrink as we get deeper into the holiday season. At one point this number dropped into the high 30s. Our co-workers are expecting this number to continue to decrease as we get closer to yearend. However there still seems to be strong demand for homes. Open house traffic is still heavy, with demand continuing to flow strong as we move towards year-end. As the shortage of homes for sale continues, sales remain brisk.  Properties are receiving multiple offers and if priced attractively, then selling quickly.  It appears that there are a good number of people purchasing homes, wanting to secure a house prior to year-end.


 

Nov. 2015 | Market Watch

Silicon Valley Market Watch

Could the Housing Market Finally Be Moving Back to a Healthier Balance?

The air is starting to cool just a bit, leaves have begun to change color ever so gradually, and there’s a distinct feeling that the seasons are changing. Could the housing market be changing as well as we enter autumn?

Reports from our offices all around the Bay Area suggest that we may at long last be moving towards a more balanced market. In many areas, there has been a gradual increase of people who are inclined to sell their home, which translates to a larger spectrum of choices for those in pursuit of purchasing a property. Prices seem to have stabilized for the most part. Although some homes are still getting multiple offers, the number has dropped significantly from eight or 10 to maybe two or three. And people in pursuit of purchasing a house are taking their time making an offer, making sure they bid on just the right home – and at the right price. The sense of urgency is gone.

Apparently we’re not alone here in the Bay Area. According to Realtor.com, this trend towards a more balanced market is being felt coast to coast. When their economic research team analyzed data for the first three weeks of August, it found that the nation’s housing market—which has been seriously tilted in favor of sellers for some time now—is just starting to tip slightly back toward those pursuing the purchase of a home.

“Now, don’t get us wrong: Sellers still have the advantage. It’s just that their advantage is being reduced,” the publication noted, as seen by the decreased amount of multiple offers. This is terrific news for those who have wanted to buy a home, but have been previously out-bid, as the current timing tips towards your favor.

From an economic viewpoint, “We are now entering the time of the year when both inventory and demand typically reach their peak as the start of the school year takes away a substantial chunk of near-term demand,” said Jonathan Smoke, chief economist of realtor.com.

“This year we’re seeing inventory continue to grow in August,” he continued. “And while overall demand is strong, the trend on median (average) days on market is suggesting that the market is finding more of a balance—and that bodes well for would-be home purchasers, who have been frustrated by the inability to find a home to buy this spring and summer.”

Realtor.com reports that in the first three weeks of August, listings inventory grew 3% over July. The median list price increased to $233,000, up 8% year over year and virtually flat against July. The median number of days on market has increased to 75 days, reflecting the shift in favor of those in pursuit of purchasing a property. The metric is down 6% year over year, meaning that the market is still hotter than last year, but the 6% month-over-month gain means that inventory is now moving slower than it has all spring and summer.

So maybe – just maybe – the housing market is gradually changing along with the seasons. One month doesn’t make a trend, and only time will tell whether this movement continues. But if we in fact are moving back into a greater equilibrium between purchasers and sellers, that could actually bode well for the long-term health of the market.

Below is a market-by-market report from our local San Francisco Bay Area offices:

Silicon Valley – Activity seems to be picking up a bit, according to our Cupertino manager. Co-workers have managed to get homes into contract after being on the market for a month or two.

The Los Altos Hills market has steady inventory. Homes priced under $4M are sold within 2 weeks, if it’s a flat lot and livable house. Some high-end (over $4M) homes are selling, but not for the listed price. This results in reducing the price in order to achieve a sale.

In Los Altos there’s been a slight increase in inventory as the median price has increased since January about $500K. Now the those seeking to sell their property want to list at recent sale prices, and people looking to buy a home do not want to pay more than last sale. So prices are not increasing. Inventory over $3M has increased slightly also. New homes still seem to sell with only 1 week of exposure to the market. Prices are not increasing.

 In Sunnyvale, our co-workers are saying the prices are settling and inventory is either staying on through the first week, or only getting a few to just one offer. Prices are not escalating.

 In Mountain View there still is not enough single-family houses on the market that are under $2M. Inventory of $2.5M is staying on the market more than one week. Condo prices and house prices do not seem to be increasing any more.

The Los Gatos area market appears to have lost a bit of steam while the stock market has been going through a correction, says our local manager. The upper end of the market has been slowing a bit since the stock market has been slumping.

 Listings in the San Jose Almaden area were down over the past 2 weeks but local activity has increased.

Santa Clara County – available amount of homes for sale is only up 13 units for SFR and C/T over the past 2 weeks. Our co-workers aren’t seeing as many multiple offers but the prices are remaining strong.  

Almaden prices were up 10% from last month, Blossom Valley was up 4%, and Cambrian was just barely down 1.1%.

Willow Glen is seeing growth in new listing inventory. There are 69 active units – third highest number all year. However, even though the traffic of people looking to buy continues to be strong at open houses, our co-workers are feeling a bit of pricing pushback from people who are potentially purchasing. Since these people aren’t showing any urgency to write offers, many properties are now sitting up to 3-4 weeks on the market prior to receiving any offers.

Saratoga co-workers are seeing a slight drop in activity in the area, both for listings and sales. Open house traffic is moderate to slow – most likely a seasonal precursor.


 

 

 Oct. 2015 | Market Report

Silicon Valley Market Watch

Could the Housing Market Finally Be Moving Back to a Healthier Balance?

Scroll down to see the Market Report for your area!

The air is starting to cool just a bit, leaves have begun to change color ever so gradually, and there’s a distinct feeling that the seasons are changing. Could the housing market be changing as well as we enter autumn?

Reports from our offices all around the Bay Area suggest that we may at long last be moving towards a more balanced market. In many areas, there has been a gradual increase of people who are inclined to sell their home, which translates to a larger spectrum of choices for those in pursuit of purchasing a property. Prices seem to have stabilized for the most part. Although some homes are still getting multiple offers, the number has dropped significantly from eight or 10 to maybe two or three. And people in pursuit of purchasing a house are taking their time making an offer, making sure they bid on just the right home – and at the right price. The sense of urgency is gone.

Apparently we’re not alone here in the Bay Area. According to Realtor.com, this trend towards a more balanced market is being felt coast to coast. When their economic research team analyzed data for the first three weeks of August, it found that the nation’s housing market—which has been seriously tilted in favor of sellers for some time now—is just starting to tip slightly back toward those pursuing the purchase of a home.

“Now, don’t get us wrong: Sellers still have the advantage. It’s just that their advantage is being reduced,” the publication noted, as seen by the decreased amount of multiple offers. This is terrific news for those who have wanted to buy a home, but have been previously out-bid, as the current timing tips towards your favor.

From an economic viewpoint, “We are now entering the time of the year when both inventory and demand typically reach their peak as the start of the school year takes away a substantial chunk of near-term demand,” said Jonathan Smoke, chief economist of realtor.com.

“This year we’re seeing inventory continue to grow in August,” he continued. “And while overall demand is strong, the trend on median (average) days on market is suggesting that the market is finding more of a balance—and that bodes well for would-be home purchasers, who have been frustrated by the inability to find a home to buy this spring and summer.”

Realtor.com reports that in the first three weeks of August, listings inventory grew 3% over July. The median list price increased to $233,000, up 8% year over year and virtually flat against July. The median number of days on market has increased to 75 days, reflecting the shift in favor of those in pursuit of purchasing a property. The metric is down 6% year over year, meaning that the market is still hotter than last year, but the 6% month-over-month gain means that inventory is now moving slower than it has all spring and summer.

So maybe – just maybe – the housing market is gradually changing along with the seasons. One month doesn’t make a trend, and only time will tell whether this movement continues. But if we in fact are moving back into a greater equilibrium between purchasers and sellers, that could actually bode well for the long-term health of the market.

Below is a market-by-market report from our local San Francisco Bay Area offices:

Silicon Valley – Activity seems to be picking up a bit, according to our Cupertino manager. Co-workers have managed to get homes into contract after being on the market for a month or two.

The Los Altos Hills market has steady inventory. Homes priced under $4M are sold within 2 weeks, if it’s a flat lot and livable house. Some high-end (over $4M) homes are selling, but not for the listed price. This results in reducing the price in order to achieve a sale.

In Los Altos there’s been a slight increase in inventory as the median price has increased since January about $500K. Now the those seeking to sell their property want to list at recent sale prices, and people looking to buy a home do not want to pay more than last sale. So prices are not increasing. Inventory over $3M has increased slightly also. New homes still seem to sell with only 1 week of exposure to the market. Prices are not increasing.

In Sunnyvale, our co-workers are saying the prices are settling and inventory is either staying on through the first week, or only getting a few to just one offer. Prices are not escalating.

In Mountain View there still is not enough single-family houses on the market that are under $2M. Inventory of $2.5M is staying on the market more than one week. Condo prices and house prices do not seem to be increasing any more.

The Los Gatos area market appears to have lost a bit of steam while the stock market has been going through a correction, says our local manager. The upper end of the market has been slowing a bit since the stock market has been slumping.

Listings in the San Jose Almaden area were down over the past 2 weeks but local activity has increased 

Santa Clara County – available amount of homes for sale is only up 13 units for SFR and C/T over the past 2 weeks. Our co-workers aren’t seeing as many multiple offers but the prices are remaining strong.  

Almaden prices were up 10% from last month, Blossom Valley was up 4%, and Cambrian was just barely down 1.1%.

Willow Glen is seeing growth in new listing inventory. There are 69 active units – third highest number all year. However, even though the traffic of people looking to buy continues to be strong at open houses, our co-workers are feeling a bit of pricing pushback from people who are potentially purchasing. Since these people aren’t showing any urgency to write offers, many properties are now sitting up to 3-4 weeks on the market prior to receiving any offers.

Saratoga co-workers are seeing a slight drop in activity in the area, both for listings and sales. Open house traffic is moderate to slow – most likely a seasonal precursor.


 

Sept. 2015 ~ Market Report

Silicon Valley Market Watch

The Bay Area’s housing market has been extremely hot for some time now, but it has taken other parts of the country a while longer to get back on track from the recession. Now it seems that the rest of the nation has finally joined in the “house party.”

The National Association of Realtors® reported this week that existing-home sales steadily increased for the third consecutive month in July, reaching the highest pace since before the recession in February 2007.

Total existing-home sales, including single-family homes, townhomes, condominiums and co-ops, increased 10.3 percent from a year ago and 2 percent from June to a seasonally adjusted annual rate of 5.59 million in July. Sales in July were most since February 2007’s 5.79 million and have now increased year-over-year for ten consecutive months.

Lawrence Yun, NAR chief economist, says the increase in sales in July solidifies what has been an impressive growth in activity during this year’s peak buying season.

“The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now,” he said. “As a result, current homeowners are using their increasing housing equity towards the down payment on their next purchase.”

The pick up in nationwide sales activity bolds well for the overall economy since the housing market is one of the main pillars of the economy. But the latest report isn’t without some cautionary signs.

One segment of the population, first-time homebuyers, have not jumped into the market to the same degree as the rest of the consumers. NAR blamed stubbornly low inventory levels and rising prices for sales to first-time buyers falling to their lowest share since January.

Hopefully as inventory begins to inch up, the housing market nationwide will begin to balance out a little more between buyers and sellers, giving first-time buyers a better chance to get into a home at long last.

 

Silicon Valley – Things are quieter in the Cupertino area than they have been, which is typical for August. Open houses continue to be very busy. Our local manager says if she were a buyer, she would shop in August. Inventory is down 26% in the Los Gatos area from the same time one year ago. Listings are increasing and sales are steady in the San Jose Almaden area, with multiple offers on almost every property (2-5).  This past weekend was slow at Open Houses probably due to the hot weather and being the last weekend of the summer for kids going back to school this week.  Prices certainly continue to rise.  The median price in Almaden was $1,340,000, which is up 11% from the same time last year and up 7.2% from last month.  Blossom Valley’s median home price was $727,500, which is up 14.6% from the same month last year and up 8.6% from last month.  The median home price is Cambrian is $950,000, which is up 25% from the same month last year and up 6.7% from last month. Our San Jose Main office manager says the market has slowed with the end of summer/start of school activities that has buyers and sellers busy doing other things than buying and selling homes. With that said, the buyers and sellers still in the game could be considered more serious as they have not let these distractions deter them from their housing goals.  Smart sellers are pricing their homes at market or 5% under, thus attracting the attention of the buyers out there.  Greedy sellers who want to be the next highest sale in their neighborhood are being snubbed by buyers who want nothing to do with homes priced over market.  Limited inventory and excellent interest rates will keep the sales market strong through the end of the year.  The Willow Glen market continues show strong buyer demand. Open house traffic is heavy, and inventory is back down into the low 60’s for active available properties. Even with the new school year starting this past week agents are still seeing strong demand with multiple offers on most properties and the biggest question for buyers is how high over list price do we go. Sellers are out and so are buyers, reports our San Mateo manager. Average attendance at weekend open houses is between 40 and 75 groups. This is a good sign.



Agents Wish for the New Year: More Inventory to Sell to Anxious Buyers 1/18/2014

Market Watch Silicon ValleyThe supply of homes for sale in the Bay Area has been at or near historical lows in many communities, driving up prices for those relatively few properties on the market and sending many would-be buyers away disappointed. The dearth of inventory has resulted in slowing sales overall, but especially in the entry-level to mid-priced market.

Only time will tell if all this talk turns to action and homeowners do in fact decide to list their homes. But my guess is that those who have been on the fence about selling are reading news accounts of prices jumping sharply, and they want to be part of the action.

A fresh influx of listings couldn’t come at a better time. Extremely low inventory is holding back sales, as evidenced by the latest report from DataQuick, the La Jolla-based industry research firm. DataQuick announced this week that last month’s home sales in the Bay Area was the slowest December in six years, with analysts blaming the constrained supply of properties on the market. Sales of new and existing single-family homes and condos in December were down 12.7 percent from the same period a year ago.

But with the low inventory, buyers have been bidding up the prices of homes on the market, with the median price in the Bay Area last month soaring almost 24 percent from a year ago to $548,500. The biggest increases were in Alameda and San Mateo counties, which had a whopping 28 percent and 25 percent jump in prices, respectively.

One segment of the Bay Area market that continues to roll on is the Previews luxury market:

  • East Bay sales over $1 million surged 27 percent in December compared to a year ago;
  • Marin County sales over $1.5 million were up 24 percent;
  • San Francisco saw a nearly 21 percent increase in $2 million-plus sales in the fourth quarter;
  • And Silicon Valley had an 8.9 percent rise in $1.5 million sales vs. last December.

Despite good sales figures in the luxury market, all segments of the Bay Area market could use more well-priced and well-appointed inventory. Buyers are out in droves and ready to purchase right now. So the question is: Are seller ready to join the party?

Below is a market-by-market report from our local offices:

Silicon Valley – Our Cupertino manager says although the new year has started out slow in sales, on a positive note agents took quite a few new listings last week, so things should start perking up. Low inventory continues to be the story in the San Jose Almaden area, with slow sales. There are only 14 single-family homes for sale in Almaden. The San Jose Willow Glen market has picked up the pace even after a busy holiday season. Buyers are hungry for new listings, and they sell as quickly as they come on the market. Agents are seeing multiple offers with over asking price offers in ALL price points. Open house traffic has been jammed in this first full week of 2014. As we move into the new year, our local office will be tracking inventory week by week to monitor market conditions. It’s still too early to tell how our local inventory levels will impact the 2014 winter selling season. One thing is for sure: There is pent up buyer demand for all price points of single family homes and condo / townhouses.

Campbell WaterTowerFour Reasons 2014 Could Be A Very Strong Year for Local Housing Market 3/1/2013

The Wall Street Journal reported this week that home prices across the country ­ – but especially in Silicon Valley and other parts of the Bay Area – have zoomed back to near record territory. Valuations jumped 25% or more in some communities over the past year, nearing or even exceeding their pre-recession highs. Prices in Palo Alto are nearly 40% above their 2007 peak, one of the largest gains in a recent survey.

Four major reasons why the Bay Area’s housing market will continue to be strong in the coming year:

1. A robust local economy.The Bay Area economy is one of the strongest in the country. Silicon Valley, the Peninsula and San Francisco are the high-tech, Internet, VC and social media centers of the world. CNNMoney’s tech job forecast for 2014 is “Hot and Getting Hotter.” Tech job site Dice.com reports that 55% more employers — a record high — say they’re ready to hire a large numbers of techies, up from 42% in the second half of 2013. These well-paid knowledge workers will provide an even stronger, better-capitalized pool of buyers for our housing market in the coming year. Just noted in USA Today, the bay area’s fourth largest city, Fremont, has seen a return to a strong housing market, and is regarded as one of the best run cities in the country. http://usat.ly/1crnbWi From the Wine Country in Sonoma, south to Carmel and Pebble Beach, and across to Livermore, we are fortunate to have healthy, diverse, and prosperous cities and towns in our nine Bay Area counties.

2. Supply and demand. While the demand side of the equation was extremely strong last year with buyers out in force, the supply continued to be historically low. This resulted in prices getting bid up in multiple-offer situations and many would-be buyers walking away empty-handed. No one knows for sure what will happen to inventory in the coming year, but our agents are telling us more listings are expected in the coming weeks. I suspect homeowners are reading the same news stories we are and seeing that prices have been shooting higher, and they may finally be ready to cash in. Rising prices also change the dynamics for many homeowners who had been underwater in their mortgage as recently as six months or a year ago and weren’t in a position to sell. With prices jumping, many of these homeowners now have positive equity once again and have the option of selling and walking away with cash for the first time in years.

3. Interest rates. Interest rates remain historically low, but make no mistake about it: They are moving higher once again. Some economists are forecasting mortgage rates could rise a full percentage point before the year is over. This is a clear wakeup call for those buyers who have been on the sidelines waiting for the perfect time to get into the market. The time is right now before mortgage rates move higher. An increase of just one percentage point on a $500,000 mortgage adds $300 to a monthly payment or $3,600 a year. Buyers know that and will be rushing to beat the next rate hike.

4. Increasing costs of renting. As the Bay Area economy comes roaring back from recession, available apartments are drawing long lines of potential tenants and rents are spiraling higher, according to a recent story in the San Francisco Chronicle. “Rents in San Francisco are escalating at breakneck clips this year, largely driven by an influx of tech workers. Oakland and San Jose likewise are seeing steep run-ups,” the article notes. Median asking rents for San Francisco apartments listed on www.livelovely.com hit a record $3,398 in the third quarter, up 21 percent from 2012, according to the Chron. Such huge rent increases continue to make buying a home a better financial proposition. My sense is that buyer demand will only increase in the new year as renters see their personal economy improving with a better job market and higher salaries.

Three of the four above are particularly unique to our Bay Area. Few cities around the US have this same alignment of economic conditions. NAR is predicting growth in the 5+% range across the nation in 2014 and I feel that number is conservative for us. Every one of our offices expect a strong first quarter as some new inventory comes to the marketplace.

strong housing market in 2014Below is a market-by-market report from our local office:

Silicon Valley – Not much going on in the Cupertino market with agents planning for the new year and recharging their batteries. One more sign of the scarce inventory level: the last two single-family homes for sale under $1 million in Los Gatos just went “pending,” meaning there are NO SFH homes under a million in that entire city. Amazing! It’s not much better in San Jose’s Almaden area, where there are only 11 active SFR listings for all of Almaden. In the Willow Glen neighborhood, listings rule the market with limited inventory and still strong buyer demand. Despite the slow holiday season, sellers are in the driver’s seat in the local market. Our Willow Glen office posted new sales during both the short Christmas week and the New Year week. As we open 2014 inventory will continue to be contracted with high buyer demand meaning sellers will see strong demand for all new listings coming to the market.

That’s it for now. Have a great weekend and best wishes for the New Year!

Bay Area’s Housing Market Closing out 2013 on a Roll 12/23/13

Silicon Valley Market watchSilicon Valley – The Preview luxury market is improving, according to our Cupertino manager. She says she’s never seen the most popular homes get bid up to the degree that they have. One of the Palo Alto listings got 21 offers and was bid up about $1M. Lots of all cash offers. Lack of inventory continues to drive prices up in the Los Gatos area as buyer demand remains fierce. The average sale price is up 10% in Los Gatos over the past year from $1,233,000 to $1,5711,000. The holiday slowdown has hit the San Jose market with our Almaden manager reporting only 15 single-family homes on the market in that area and 20 pending sales. The Willow Glen market is also starving for listing inventory. Agents continue to see contraction in inventory week after week as we move through the holiday season and year end. Buyers are still in the holiday buying mode. Any new listing that comes to the market is getting a lot of attention. Open house traffic is still brisk and agents are experiencing quick sales with multiple offers on most new listings that come “active” to the market. The expectation is that listing inventory will continue to be tight as we move into the new year.

Sales over $1.5 million in Silicon Valley were up nearly 24% in November compared to a year ago. A total of 151 luxury homes sold last month, up 23.8% from the 122 sales in November 2012. The median sale price was $1.92 million, up 1.7% from the same month a year ago. And the upper end of the luxury market was especially strong with 67 sales over $2 million, up from 50 a year ago, and 22 sales over $3 million, up sharply from the 15 last year.

IMG_6309The Bay Area’s housing market is finishing 2013 where it began the year – with home sales enjoying sharp gains over last year and prices continuing to appreciate. It is particularly showing impressive strength in the luxury market. This comes as the stock market nears record highs, raising the net worth of many luxury homebuyers, and the economy finally seems to be gaining some traction. In this edition you’ll find some impressive numbers from our Previews International Luxury division.

After months of speculation, the Federal Reserve announced this week that it plans to slow down its bond-buying program, which has kept interest rates near historic low levels. But the Fed also committed to keeping short-term interest rates near zero until well past the time that the unemployment rate declines below 6.5%.

Although a majority of our luxury home sales are all cash; or a very high percent down payment if a loan is involved, the activity of the Fed such as bond purchasing which affects interest rates also affects the luxury market. Typically Wall Street reacts positively or negatively when the Fed changes monetary policy. And the luxury homebuyer is either more inclined or less excited about a luxury purchase after seeing a trend change upward or downward in stock prices.

Wall Street greeted this past week’s the news enthusiastically, perhaps because the decision was a modest tapering and driven by the fact that the economy appears to be getting measurably stronger. As of Friday afternoon, the S&P 500 Index was up 2.6% for the week and the Dow appeared poised to set a new record above the 16,200-level.

The strong gains in the stock market certainly are playing a role in the Bay Area’s red-hot luxury housing market. Three new reports out this week by our Coldwell Banker Previews International luxury brand show high-end sales rising sharply as the year draws to a close.

So as we head toward 2014, all signs point to a healthy market overall, but especially in the Previews luxury segment of the market. That’s not to say we don’t have our issues. Inventory remains way too low, which continues to restrict sales. But my hope is that more sellers realize that the housing market has indeed turned around, values are up once again, and buyers are out there ready to purchase, we’ll see a wave of new listings come on the market in the new year.

 

Coldwell Banker

Courtesy of Rick Turley – President, San Francisco Bay Area – Coldwell Banker Residential Brokerage

To search for properties in the Santa Clara area, please visit www.LosGatosSaratoga.com or call Stephanie Perrault at 408.5717.4222 or email stephanie.perrault@gmail.com

Stephanie Perrault

408.5717.4222 Cell
Stephanie.perrault@gmail.com

Coldwell Banker Residential