Newsletter

Silicon Valley Market Trends

Sale price to list price ratio continues to rise

How's the market?How's the Santa Clara County real estate market?  For buyers, it remains challenging and for sellers it continues to be very good overall.  The most affordable homes, or those which are most affordable in areas with better schools or commute locations, have the strongest seller's market.  

Home prices are rising with double digit appreciation year over year in many segments of the market.  Much of the valley is at or near peak pricing, and the rest should get there this year.  The average price for single-family, re-sale homes went back over $1,000,000 for the first time since November 2007. The average price for homes was up 24.5% year-over-year.

What is driving this insanely overheated seller's market?  Part of the formula is the fast decline in the number of bank-owned and short sales has been credited with moving the statistical pricing numbers up rapidly.

There is something to be said for that theory. In January 2012, 40% of all homes sold were either bank-owned or short sales. Last month, that number was less than 10%. I expect as bank-owned and short sales become less of a factor in the market, price increases should start going back into single-digits.

In Silicon Valley, though, even more weight should be given to our recovering economy and jobs growth.  Every week I'm contacted by folks wanting to move here as they've got job offers in hand. 

Santa Clara County residential real estate statistics at a glance

One of the most striking things about the stats for Santa Clara County is the rising sale price to list price ratio, which is now at nearly 106% for the county.  The days on market continue to shrink to a mere 22 and the days of inventory are now under a month. We know that the valley is comprised of many micro markets, so to have the numbers overall trend like this is a huge statement about the conditions overall.  It's crazy out there!

Santa Clara County single family homes listed and sold in April 2013 by area

 

What about the condo market?

Is the condo market any better? For buyers, it's even worse - have a look at the sale price to list price ratio below. It is over 107% for the entire county.  Not one area has less than 100%!

The condo and townhouse market in Santa Clara County for homes listed and sold in April 2013

Here there is even more competition with investors because most condos are far more affordable than single family homes.  

What does it take to buy a home in this market?

It is a very hot seller's market in the San Jose area. Buyers often face multiple offer situations in which one or more competitors come in all cash, no contingencies of any kind (no loan, appraisal or property condition contingencies).  Other buyers do have a loan but waive their loan and appraisal contingencies. Sellers want to sell and know that it will not fall through, so often will try to get both a non-contingent sale and also, of course, the highest price.

If you want to buy a home, but don't want to give away all of your rights, do you have a chance?  Yes, but you need to find a home that is not going to get loads of offers.  When I hear that a house has 20 offers on it, I know that we have a 5% chance of success. Those aren't great odds!  Find the properties which have 5 or fewer offers.  How to do that? Most buyers only bid on the houses or condos which seem perfect or close to perfect.  Think differently.  Find the house that needs work or has a fixable issue which is keeping other competitors away.  Look for the property which has been on the market 30 days or more.  You may still be up against multiples, but it might be one or two, not a dozen.  

For more information, please pull up the statistics for all of the county at http://www.popehandy.rereport.com.  Read more articles and find statistics at a glance via the PDF version: http://rereport.com/scc/print/Mary.PopeHandySCC.pdf

Wishing you all the best.

Many thanks,

 

 

 

 

Mary Pope-Handy
Realtor, CRS, ABR, SRES, e-Pro
Sereno Group
408 204-7673

Contact Information

Photo of Mary Pope-Handy Real Estate
Mary Pope-Handy
Sereno Group Real Estate
214 Los Gatos-Saratoga Road
Los Gatos CA 95030
408 204-7673
Fax: 408 715-0243

DRE #01153805