Fierce Competition Continues in California Housing Market

 Fierce Competition Continues in CA Housing Market 

The California housing market is red hot as the year comes to an end. The state has already recovered all the sales it lost in the first half of the year as insatiable housing demand in recent months has propelled sales to levels not seen in the past 15 years. Sales of existing single-family homes surpassed the 500,000 benchmark for the first time since January 2009, while year-to-date sales through November exceeded last year’s level for the first time since March and recorded an increase of 1.3 percent from 2019.    

On the supply side, levels of for-sale properties remained extremely low, with active listings declining 18 percent in November 2020 from the prior month and 46.6 percent from a year ago. The unsold inventory index, in fact, reached the lowest level in over 16 years. The surge in Coronavirus cases since late October likely played a role in the biggerthan-normal drop in active listings this year as many homeowners have been reluctant to put their house up on the market because of public health concerns.  

Click to see the full Jan.1 report.

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Francis

Silicon Valley real estate
Trends: Local prices and graphs.
How much is your home worth?

Fabulous 1 Bedroom for sale in Mt View - Los Altos Schools - www.49ShowersA238.com 

Try And Try Again - A Home Buying Tale

Try and try again...

The market "has softened", or the market "has slowed down".  Or has it?

I was just hearing MarketPlace on NPR yesterday afternoon saying that the market was going to have a renewed jump in activity soon, with more multiple offers than we even had lately, due to lack of inventory and very low interest rates.  Whether this comes true or not, we will see.  But these stats below tell the tale of California home buyers and their successes, ...or delays during the 2nd quarter of this year.

Click to see larger

Truth be told, in the SF Bay Area, whether the market has slowed down or not depends a lot on the exact area, the type of property, the time of year and also... the asking price.

For instance for well-priced properties in Palo Alto, or towns with good schools, the activity is still quite brisk.  For smaller homes like condominiums in areas where there is more inventory (i.e. some areas in San Jose or Santa Clara, or Sunnyvale) prices have certainly come down from the highs of last year.  It is all a question of knowing the market.  A qualified buyer's agent is a must to make sense of all this, someone who carefully evaluates the home value and the recent sales before placing an offer, above or under asking price.  It will depend on the condition, the location, the local inventory for the particular home you are considering.

Questions? Call or text!

Thank you,

Francis

Home Valuation tool

Detailed, local trends etc...

Current mortgage rates   - low, with some volatility.

The Silicon Valley Real Estate Market

There is some confusion about the state of the real estate market in the Silicon Valley lately.  Are prices going up, are they going down? You hear anything and everything.

These two graphs show the average price per month since the beginning of 2018, one for houses, and the other one for condominiums and townhouses combined.  I show here the cities of Mountain View, Sunnyvale, Palo Alto, Los Altos and Los Altos Hills, and Menlo Park. (East Palo Alto for houses).
The Counties of Santa Clara and San Mateo as a whole are also shown, giving some perspective on the larger numbers.
For May, figures are just trends - it is as of 5/20/19

Click on the graphs to see larger

Conclusion? Prices are about at the same level. The reality is that there are segments of the market which are rather up, and some segments which are down from their highs of a year ago (which were the results of many multiple offers).  Small entry level condominiums would be in the "soft" category,  and I would consider them a deal right now. Remodeled homes in desirable areas would be in the "solid" category.

To know in which category you are and how to structure your offer, you definitely need a specialist.

Factors helping the market:
- low interest rates,
- more inventory for some categories

Factors keeping it competitive:
- very high job creation in the Valley - see this recent article from the Mercury News, by George Avalos.

Thank you for reading!  Share if you like, and contact me for your real estate questions!

Francis Rolland

My Home Valuation tool
Detailed, local trends etc...
Current mortgage rates   (low!)

Seasonality of real estate sales prices - Silicon Valley

To piggy-back on one of my earlier blogs on the evolution of prices in the Silicon Valley, here is an updated graph showing the median price of a residential piece of property in the County of Santa Clara, between a bit before Jan 1, 2015, and right now: July of 2017.





















Click on the graph to see it larger.

The green arrows point to a seasonal low in Aug./ September (corresponding to August sales) and a movement downwards in january, which corresponds to sales in November and December.
As mentioned in my previous blog, it does not mean necessarily that the same property will sell for less in December than in January, but it does mean that more properties of a lower value sold in November / December than in January.  One can see that in February the median price starts going higher (these are the January sales).

Will the same property sell for less during those times?  It is open to question, but my experience is that a prime piece of real estate, with good location, very good condition etc... will sell for about the same price.  By experience, if a property is not top notch, it may suffer somewhat from the timing.   Otherwise, these ups and downs relate to the fact that:
- many people are away during the months of July and August,
- many people wait for right after Labor Day to put a property on the market (feeling that fewer people will be in the market to buy a home, because away on vacation),
- fewer people are looking to buy in November and December because of the holidays and the weather.
- statistically, more homes go on the market during those slower times because they have to.  This can  also explain why the sales price is lower.

Thank you for reading!
Francis

Trends: Local prices and graphs.
Check your Home Value
A worthy local non-profit to remember: Community Services Agency in Mountain View

First-time home buyers

First-time home buyers make about a third of all home buyers, nationwide, according to the National Association of Realtors. 

The median age of a first-time buyer is 31, (making about $70k), while the median age of a repeat buyer is 53, (making nearly $100k).  It is safe to say that they do not have the same priorities.

While first-time home buyers usually settled in the past for a cheaper “starter home”, there are signs now that more want to have a home for the long term, holding back for a home that will work for them for a much longer time.  70% are willing to wait, rather than settle for that cheaper, smaller house with some repairs. 

Since we have been faced with a severe scarcity of “starter homes” for sale, compared with a few years back, the price tag of those properties went up drastically.  It is possible that first-time home buyers find that the price is not worth it any more and prefer to wait for more savings to buy a larger first home that will serve their needs for many more years.

Per the Residential Specialist (trsmag.com) the main home features that first time home buyers like most are, in order:

- updated kitchen and bathrooms (81%),

- an open floor plan (59%),

- low maintenance characteristics (43%),

- walkable communities (36%),

- energy efficiency (20%),

- cell phone service and wifi access (19%).

Those feature preferences are definitely evident in our market in the Silicon Valley, and with the exception of the last one, I think the order is pretty much the same.  Here, phone reception and wifi access is also close to the top of the list in my experience.

Thank you for reading!

Let me know if I can be of assistance to you, or someone you know, with real estate questions.

Francis

Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View

Report from the trenches - The Silicon Valley & SF Peninsula real estate activity.

Our latest "report from the trenches", from the Coldwell Banker office managers all along the Peninsula:

SF Peninsula – ...  In her decades of experience in this area, our Menlo Park manager has never seen the market so low on inventory – even for this time of year.  Buyers are out in droves yet after last week in the equity markets, they are a bit in a wait and see attitude.  Properties are still moving quickly but there are more buyers than actual ‘bidders’ right now, she says. Anything under $1.4 million is getting a lot of attention and selling quickly. $5-6 million homes are becoming more and more common in Menlo Park. Inventory is seasonally low in Palo Alto, but demand is still there. Amazingly there is still an incredible lack of inventory all over the Peninsula, says our Redwood City manager. Because of this almost all offers are multiple offers. There still are a lot of buyers with sufficient funds to purchase but due to the lack of inventory there is a tremendous amount of frustration. More inventory is hitting the San Mateo area market, our local manager says. Agents have a number of listings inked and ready to come on in the next couple of weeks. The market is “moribund” right now in the country offices, reports our Portola Valley-Woodside manager.  But she says that this area always seems slow to start the new year.

Silicon Valley – New inventory is slow to hit the Cupertino area market. The few new open houses our local agents held had 200-300 visitors in some cases. There are currently 25 homes for sale in Los Gatos, down 40% from the same time last year, reports our Los Gatos manager. The San Jose Almaden market has been more of the same with lower inventory than previous years, although it has increased since December.  Buyers aren’t waiting to write up offers.  Most of the listings are going into contract during the first weekend of open houses.  A 1,330 square foot SFR in Santa Clara (with Cupertino HS) that had a list price of $895,000 received 46 offers and sold for $1,330,000.  With the New Year underway the post-holiday local Willow Glen market is busy although it is still experiencing extremely low listing inventory. The year started with only 23 active listings and dropped to 21 in week two. Open houses are jammed, and multiple offers well over list price are the norm. Agents all have a bounty of buyers they are trying to get into something.

My personal experience has been a difficult market for buyers, even towards the end of the year, when buyers typically are given a break. The transactions I have had in the past two months have been tough, and buyers could not ask for much... 
Such is the market!

Thank you for reading,

Francis

Silicon Valley real estate

Trends: Local prices and graphs.
A worthy local non-profit to remember: Community Services Agency in Mountain View

Bay Area home prices leveling off.

Prices in the Bay Area at large are leveling off.

Not everywhere, and not all in the same manner.  But DataQuick, the La Jolla-based real estate information services firm, said the median sale price for new and existing homes in the region in July stayed at a 3-month plateau at $617,000.  That was down .2 % from June's median price but up 9.8 % from the $562,000 median in July 2013. 

Complete information along the Peninsula can be found in this Coldwell Banker article, with the following remarks with regards to the area close to Los Altos and Palo Alto, and referred to as "Silicon Valley" (always more competitive):


...... Silicon Valley – The market is a bit spotty, according to our Cupertino manager. The demand for

great houses with Cupertino schools is as high as ever, but certain segments seem to have cooled off. It’s August, after all! Our Los Altos manager reports that there is lower inventory currently in most of the local cities, which is basically seasonal. But the stagers are booked out the whole month of September, so that means some new inventory hopefully. Downtown Mountain View houses often sell within one week. The condos are still getting strong activity with multiples either the next week or following. Palo Alto still has low inventory, but if the house is priced too high, it doesn’t sell. The best sections of town still lack inventory and there are buyers lined up for each one. Last week a house in old Palo Alto sold for more than 1M over list ($6,700,000) with multiple offers. Los Altos Hills with Palo Alto schools attract many buyers and multiple offers. North Los Altos is still in huge demand as is most of the city and Mountain View west of El Camino. Sunnyvale is still occasionally seeing a new all-time high. In Los Gatos, inventory is tightening up even more as school heads back into session. San Jose-Almaden agents are not seeing as many multiple offers in Blossom Valley and Santa Teresa but they are in Almaden and Cambrian. One listing in Cambrian had 20 offers. Our San Jose Main office manager said the local market is seeing another drop in inventory, while buyer demand has pulled back as well. Open houses are well attending with some open houses having 40 groups each day on the opening weekends. Multiple offers are still prevalent, but the sheer number of offers has seemed to decrease. All signs indicate that we will have a strong fall. The local Willow Glen listing inventory remains consistent where it has been the last month. Agents are waiting to see if the post Labor Day weekend will bring a surge of new listings for the fall selling season. With tight inventory and strong buyer demand agents there have seen heavy open house traffic. With this increased demand agents starting to see the pre-emptive offers, multiple offers and aggressive offers way over asking price. The market is getting hot again in Willow Glen. ...

thank you for reading!
Francis


Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

non-profit organization worth noting: Partners for New Generations - now called:
Mentor Tutor Connection.

New to the Silicon Valley? This blog's for you!

FUN FACTS

- Silicon Valley has the nation’s second highest concentration of wealthy people, according to the U.S. Census Bureau.
- Money Magazine named Cupertino one of the nation’s best places to live in 2012.
- Forbes ranked San Jose No. 6 on its 2011 list of “America’s Safest Cities”.
- The name “Silicon Valley” originally referred to the region’s large number of silicon chip innovators and manufacturers, but eventually applied to all of the tech companies in the area.
- The “mouse” was invented in Silicon Valley in 1963.

See more at: The CaliforniaHome Blog

Francis
Silicon Valley real estate specialist
Detailed, local trends etc...
Current mortgage rates

Price increase in the Silicon Valley

To piggy up on my last blog (is the market slowing down?) here is the evolution of sales prices of houses and CID's (common interest development = condos and townhouses).

These graphs that I just pulled show the amount of increase in average prices in a year and a half, and illustrate how indeed this is a factor in a possible slow-down of the activity.

They also show something that is unusual: prices did not really go down a lot at the end of 2012.  On previous studies I showed how prices really adjusted towards the end of the year, in 2011 and 2010.  But the market stayed strong at the end of 2012.

Finally these graphs show that indeed prices are (somewhat) flattening at this point, at least in the case of the County of Santa Clara.

 

 

If you have any area of interest, very local or at the City level, let me know and I will publish it for you.

 

Thanks for reading, as always!,

Francis

 

Silicon Valley real estate

Local market trends
Current Mortgage rates

Non-profit organization worth noting: Partners for New Generations.

Luxury Market - Silicon Valley - an update...

Silicon Valley’s Luxury Home Sales Soar Again in May

Posted on June 20, 2012  - from our Coldwell Banker posts.
Silicon Valley’s luxury housing market turned in another stellar month in May as high-end property sales soared from the previous month and year-ago levels, according to a new report by Coldwell Banker Residential Brokerage.

A total of 148 homes sold for more than $1.5 million in May, up a whopping 59 percent from May 2011, when 93 high-end properties changed hands. Last month’s sales were also nearly 16 percent higher than April’s total. May had the most monthly sales since last November.

The upper end of the luxury market also turned in an extremely strong performance in May with 57 sales above $2 million compared to 42 a year ago, and 14 transactions over $3 million, nearly double the eight sales at that price range last year.

The median sale price for a luxury home was essentially flat from a year ago, measuring $1,887,500 last month and $1.9 million in May 2011.

The figures were derived from Multiple Listing Service data of all homes that sold for more than $1.5 million last month in Santa Clara County.

“Silicon Valley is showing all of the signs of a classic seller’s market with strong buyer demand, a severe shortage of home listings to choose from, and multiple offers on many properties,” said Rick Turley, president of Coldwell Banker Residential Brokerage. “With inventory levels remaining near record lows, I suspect we’ll continue to see this scenario play out, at least for the near term.”

In many areas of the South Bay, inventory is down 30-50 percent from just a year ago, leaving the scales of supply and demand tipped heavily in favor of sellers. Multiple offers are becoming the norm in a number of communities and homes are often selling for more than the asking price – sometimes much more.

Some key findings from this month’s Coldwell Banker Residential Brokerage luxury report:

■The most expensive sale in Silicon Valley last month was a six-bedroom, seven-bath 4,500-square-foot home in Palo Alto that sold for $5,098,000;
■Palo Alto and Los Altos tied for the most luxury sales with 40 apiece, followed by Saratoga with 23, and San Jose and Los Gatos with 15 each;
■Homes sold in an average of 36 days compared to 41 days a year ago and 35 days the previous month;
■Sellers on average received 103 percent of their asking price compared to 101 percent the previous month and 99 percent a year ago.

The Silicon Valley Luxury Housing Market Report is a monthly report by Coldwell Banker Residential Brokerage, a specialist in high-end real estate sales. Through its internationally renowned Coldwell Banker Previews® program, the company is recognized around the world for its expertise in the luxury housing market.

Thanks for reading!
Francis
http://www.frolland.com/

Rents are up 5% nationwide

Taken from a Trulia article:

Rents Continue To Climb, Rising Nationally 5.0 Percent Year-Over-Year

Asking rents rose over the past year in almost all large metro areas included in the Trulia Rent Monitor. In the largest metros, rents rose 6.2 percent in New York and 6.1 percent in Chicago, but only 0.6 percent in Los Angeles. Rents rose strongly in Miami (12.1 percent) and Denver (9.9 percent), which also experienced large asking price increases. Meanwhile, rental affordability declined in places where rents rose while prices fell, most notably in San Francisco (rents up 11.1 percent), Seattle (9.7 percent), San_Jose (9.4 percent) and Boston (9.2 percent).

On the ground I find that there is a complete penury of rentals in the area centered around Palo Alto, and that rents have gone up in the Silicon Valley by a lot more than 10% in some cases.  It is good to check with your Realtor on the latest values if you are thinking of renting out your property for a while.
I often advise to also check Craigslist's listings.

Francis Rolland

Silicon Valley Real Estate

Local market trends

Francis - on Trulia

Current Mortgage rates

Rental market is tight here in the Silicon Valley

I have been exposed to the rental market recently through 2 properties that I have put on the market for rent locally, one in Palo Alto, and one in Redwood City.  (Not all agents deal with rentals BTW...).

I have experienced first hand what has been known for a while now: that the rental market is difficult in the Bay Area (for renters), and prices have gone up since last year - if I had to guess I would say by about 10% easily.  In each instance these properties had several applications within a few days of being on MLS.

Several reasons can explain this increase:
- a better economic outlook in the Valley, leading more people to come here than people leaving the area, (which, incidentally, is also tied to registration in some schools such as the French-American schools and the German-American schools of the Bay)

- a significant number of people loosing their home (i.e. short sales and foreclosures) who find themselves renters suddenly,
- a relative lack of new construction - although there are some new projects being built around which will  somewhat address this penury.

Although this is true in general nationwide, it is more accute in Cities like San Jose, as described in this recently published article in the Business Journal, which goes over a few of these figures and facts.

Thanks for reading !
Francis

Silicon Valley Real Estate

Local market trends

Useful links

Latest Mortgage rates

Bay Area Investors...

Investors: the trend continues in the Bay Area with a lot of buyers investors:

- 17% in the County of Santa Clara,

- 21% in San Mateo County - 27.5% in Solano County
- 25% Contra Costa County.

Over 20% of all purchases are all cash, with no loan involved.

In fact, an interesting phenomenon occurs in some depressed areas:
in some condominium complexes, where over 15% of the units are delinquent, (typical) banks will not lend…  So this leaves only cash buyers as potential buyers of these properties.  Obviously these buyers purchase the units for the long term, hoping that the real estate market will improve enough that the complex will go up in value.  The rents have increased so much in the past 2 years that the return on investment makes it a very viable deal.

An other problem can occur there though: if more than 50% of the units in a complex are non owner-occupied, loan are also almost impossible to obtain - or more expensive.  One of the rules of most lenders is that this important percentage has to be over 50%.  So that would leave future buyers and future homeowners in those complexes with a difficult situation: potential buyers who need a loan may not want to pay the extra fees and rates in order to get these loans.

Do not underestimate the need for good advice when you purchase a condominium.  A seasoned agent is a must, to make sure you are informed.  Here is a good informational page on this "condominium"subject.

Thanks for reading.
Francis

Silicon Valley Real Estate

Local market trends

useful links

Mortgage rates

Silicon Valley and FHA loans..

Home prices are pretty high in the Silicon Valley.  Here, where sometimes wages are comfortable and disposable income or savings pretty low, it is good to remember that it is still possible to purchase a home with as little as 3.5% downpayment. 

How is it possible? with an FHA loan, which is an (almost) normal loan, guaranteed by the Federal Housing Administration.

How does it work? Well it is fairly easy in fact - there are few limitations: the buyer does not have to be a first-time home buyer, there is no limitation of income for the buyer, and the property purchased can be pretty much any price.  The loan amount is limited to about $730,000.

So I like to remind my clients of this option if they have little savings or family help for the downpayment, or if their salary is modest: they can still think in terms of homeownership while prices and interest rates are low.  It is quite a good loan, with an attractive interest rate (at or slightly lower rate than a normal conventional loan).  It is a little more expensive to get: there is a 1% upfront fee for the mortgage insurance and a fee of about 1% every year on the amount of the loan.  Note: If it is used to purchase a condominium, the complex has to be FHA approved.

If you know someone who wants to take advantage of such a loan program let me know: I will share names of lenders who know FHA loans well.  Time is also important: the loan limit will go down on October 1st to $625,500. 

Thanks for reading, and sharing!
Francis Rolland
- Since 1985

Silicon Valley real estate
Search for homes in Los Altos

A link of interest:  American Legion Santa Clara Post 419