Prices May Stay Pretty Stable in 2020

Prices may stay pretty stable in 2020?

Many clients ask me which direction prices will trend this year with the pandemic.

Some expect prices to go down, while others encounter multiple offers, at least here in the Silicon Valley.

For now, and just considering our local area, one thing is sure: the number of transactions has been cut roughly in half. But how prices will fare will depend mostly on the job market in both Santa Clara and San Mateo County.  And what we see a lot of is remote work, not so much lay offs (although unfortunately we will see some of that happen way too much).

In this article from Clare Trapasso, senior news editor of Realtor.com, the prediction is that prices will remain steady in 2020, because the inventory of homes has also gone down dramatically.  In the Silicon Valley where properties are still fairly scarce, my experience is that prices are currently soft, but this is compared to an early expectation of a strong price increase at the beginning of the year.  It is also not the case for prime, very desirable properties (i.e. very remodeled, or excellent location, or large lots, or just "rare finds").
Diana Olick, from CNBC, also reports a surge of multiple offers nationwide, with a majority of offers being made in a competitive environment in many local markets, from the East to the West.

Thank you for reading,

Francis

Home Valuation tool

Detailed, local trends etc...

Current mortgage rates   - low, with a lot of volatility.

Be sure to check this fabulous new listing in Palo Alto at: 3228 RossRd, near Midtown! Select "view full screen" at the bottom right for the best experience.

Bay Area: A (long) Perspective On Prices.

Bay Area, Santa Clara County, California State, and the US:

A long perpective on prices, since 1968.

A picture is worth a thousand words... This graph that I have updated for several years now shows the evolution of the median price of a single family residence at the County level, the 9-County region of the Bay Area, and compares them with the median price at the California level, and at the US level.

 

It shows that really, only the great Crisis of 2008- 2009 had a significant impact on prices over a whole year period.  The earthquake of 1989 definitely stopped prices from going up (along with an economic slow-down), starting a long drawn-out period of time when prices were essentially flat.  The dot-com bubble collapse in 2000 and 2001, coupled with 9/11 also had a significant impact on the curve.  After 2 or 3 years, prices started to go up again at all levels, but more acutely in the Bay Area and in California.

Pls click on graph for a full size picture.

Thank you for reading!
Francis

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

Positive Equity Rises in 2013 - local market place update

A new analysis by CoreLogic shows that 4 million homes returned to positive equity in 2013, bringing the total number of mortgaged residential properties with equity to 42.7 million. 

However, it is important to note that the CoreLogic analysis indicates that nearly 6.5 million homes, or 13.3 percent of all residential properties with a mortgage, were still in negative equity at the end of 2013.

In our local area, the Bay Area of San Francisco, it is difficult sometimes to keep some perspective on the local market, which has been on fire since the beginning of January 2012.  This study by CoreLogic gives perspective at the national level: things have for sure improved enormously, but all is not over from the 2008-2009 crisis.

In the Bay Area, let's note that the inventory of homes (SFR + condos) for sale was about 1,700 after the first week of July, as compared to 1,872 a year ago.  There are fewer homes for sale.  It explains why property values have gone up so much in the past 12 months.  Inventory was at 7,500 in May of 2008!
For the area that includes only Los Altos, Los Altos Hills, Mountain View, Palo Alto and Menlo Park, inventory stands right now at:
150 homes total for sale (both houses and condominiums and townhomes, called PUD's), vs
184 last year at the same period.

We still have a very low inventory.

Dealing in the local market place day in and day out, I can however note here that, overall in the County, the activity seems to slow down: I have noticed fewer multiple offers in general, and a slower price increase in many areas. Except for Palo Alto and all areas with the best schools, I can sense that it is a slower activity now, during July.  This slow down can be the normal cycle, which slows down during the summer vacations (see my last graph-blog on the subject), or it could be a more general trend tied to the market in general.  We'll see in September! 

Thanks for reading!

Francis

Silicon Valley real estate

Trends: Local prices and graphs.
A noteworthy local non-profit event:  Coalition on Homelessness, SF