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The Real Estate Market in Silicon Valley

Silicon Valley market update - notes on 3 counties

How's the market?  In many areas, Realtors are speaking of "a shifting market".  We see cooling in much of San Mateo County and Santa Cruz County but Santa Clara County is generally holding up a little better. Prices are still up year-over-year in all three counties, but in many areas, they are down month-over-month.


The graph below shows the median and average prices of homes sold in Santa Clara County and the number of sales. You can see that most years there's a dip around January in the number of sales and also the pricing - so some softening month-over-month is not completely abnormal here.



Quick summaries of the three counties

In Santa Clara County:

  • Median home prices increased by 10.5% year-over-year to $960,000 from $869,000.
  • Median home prices remained exactly the same at $960,000 as compared to the month before.
  • Average home prices rose year-over-year by 8.4% and 07% mont-over-month.

In San Mateo County:

  • Median home prices increased by 11.2% year-over-year to $1,180,000 from $1,061,000.
  • Median home prices slipped by 1.7% to $1,180,000 from $1,200,000 month-over-month.
  • Average sale prices rose year-over-year by 15.8% but fell from last month by 2%.
  • Despite some softening in the sale price, homes continue selling on average for well more than list pirce, and with some areas such as Belmont, Brisbane, Menlo Park, and Foster city averaging 109% of list price.
  • Most communities in Santa Clara County are selling with an average sale price to list price ratio of over 100% (with a few exceptions).  Palo Alto is the strongest, pulling more than 109%, Los Altos at 108% and Sunnyvale at 107%.  The surprise of the pack is Cupertino, with an average ratio of a surprisingly low 100.4%. 

In Santa Cruz County:

  • Median home prices increased by 2.9% year-over-year to $740,000 from $719,000.
  • Median home prices slipped by 6.9% to $740,000 from $795,000 month-over-month.
  • Average sale price fell both year-over-year by 3.2% and month over month by 7.3%
  • With the exception of Watsonville, communities in Santa Cruz County are selling with an average of less than 100% of list price.  Some homes are selling for more than list, of course, but not nearly so many as in counties to the north.

Why is Santa Clara County faring a little better than neighbors to the north or south?  I think it's too early to presume that this will always be the case for long, so perhaps this is just a funny fluctuation that won't last. (Usually San Mateo County tends to have a stronger market than Santa Clara County.)  If I had to guess, though, I would suggest that home prices to the north are just so high that more folks may be willing to drive a little further and get a bit more house for their money.  There are tons of major employers in Santa Clara County, and most of those people are more likely to purchase here or in a less expensive community rather than target the Peninsula, which tends to be about 20% more expensive. 

To read the full, current online report: http://popehandy.rereport.com/

 

Local Silicon Valley Real Estate Market Details:

Santa Clara, San Mateo & Santa Cruz County RE Report   

Printable versions (more articles, area by area comparisons)

Santa Clara County RE Report  4 page printable version

San Mateo County RE Report 4 page printable version

Santa Cruz County RE Report 4 page printable version

 

C.A.R.'s 2016 California Housing Market Forecast

California home sales to increase slightly, while prices post slowest gain in five years.

California’s housing market will continue to improve into 2016, but a shortage of homes on the market and a crimp in housing affordability also will persist, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 California Housing Market Forecast”. 

The C.A.R. forecast sees an increase in existing home sales of 6.3 percent next year to reach 433,000 units, up from the projected 2015 sales figure of 407,500 homes sold.  Sales in 2015 also will be up 6.3 percent from the 383,300 existing, single-family homes sold in 2014.

“Solid job growth and favorable interest rates will drive a strong demand for housing next year,” said C.A.R. President Chris Kutzkey.  “However, in regions where inventory is tight, such as the San Francisco Bay Area, sales growth could be limited by stiff market competition and diminishing housing affordability. On the other hand, demand in less expensive areas such as Solano County, the Central Valley, and Riverside/San Bernardino areas will remain strong thanks to solid job growth in warehousing, transportation, logistics, and manufacturing in these areas.”

The average for 30-year, fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.

The California median home price is forecast to increase 3.2 percent to $491,300 in 2016, following a projected 6.5 percent increase in 2015 to $476,300.  This is the slowest rate of price appreciation in five years.

“The foundation for California’s housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “However, the global economic slowdown, financial market volatility, and the anticipation of higher interest rates are some of the challenges that may have an adverse impact on the market’s momentum next year. Additionally, as we see more sales shift to inland regions of the state, the change in mix of sales will keep increases in the statewide median price tempered.”

 

Featured Articles and Happy Thanksgiving!

Featured articles 

 

In the luxury home market of Santa Clara County, how many properties are bought “all cash, no loans”

Los Gatos Thanksgiving Interfaith Service 2015

Do you have an idea for an article on one of my sites?  Drop me a note and let me know!  Often it's consumers' questions which drive the topics covered.
 

With warmest regards for a very Happy Thanksgiving,

PS If you know of anyone wanting to buy or sell in Silicon Valley in 2015, I would deeply appreciate your passing my name and contact info on to them, or to pass theirs to me.  (Most of my clients come to me either by referral or from reading my blogs or social media interaction.)

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
408 335-1400
Fax: 408 715-0243

BRE #01153805