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 

Many Home Purchase Offers Are "Sight Unseen"

Nationwide, 45% of surveyed homebuyers said they made a bid on a home without first seeing it in person, up from 28% in 2019. Redfin agents cite health concerns around the pandemic and competition fueled by a worsening housing shortage as reasons more buyers are bidding on homes before visiting them.

See the  Redfin-commissioned survey in May and June of more than 1,400 people across 29 major markets.  Article by Lily Katz.

I have had one experience myself of an offer "sight unseen" on one of my listings, 3 months ago, and several agents have also experienced one of such offers within our Coldwell Banker Los Altos office.

Francis

Silicon Valley real estate
Trends: Local prices and graphs.
A noteworthy local non-profit:  Community Services Agency - in Mountain View

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!)

Bay Area: some relief for homebuyers?

As demand for housing remains quite strong locally in the San Francisco Bay Area and the Silicon Valley, are homebuyers going to see some relief coming their way soon?

Inventory is key to this equation.  Look at the situation the way it was last year, and what it is today, in the cities around Palo Alto and Los Altos:

Inventory for all houses, condominiums & townhouses, a year ago,
-------------  on March 31, 2015 ----- Inventory today - April 6 2016:
Los Altos:...............27               - - - - - - - - - -        29
Palo Alto: ...............45               - - - - - - - - - -        51
Mountain View:......26              - - - - - - - - - - -       43
Sunnyvale:..............46              - - - - - - - - - - -       82
Menlo Park: ...........21              - - - - - - - - - - - -     30
Cupertino: ..............31              - - - - - - - - - - - -     67
For Mountain View, Sunnyvale and Cupertino, this is almost twice as many homes for sale now than last year.  This could mean some relief for homebuyers.

From the trenches, dealing with the market on a daily basis, I think many agents would agree that the activity shows signs of leveling a bit - but we have to characterize this with a few caveats: buyers still need to be completely pre-approved, and very motivated.  It's just that where we could expect 10 offers, it seems that we are seeing, say, half that amount lately.  Several factors are in play here, influencing activity:

- overpriced listings will stay on the market for a while, (& there are a few more lately),
- the increase in price is not as high as it has been until now,
- the best properties (most desirable) will always be the ones with the most activity,
- more homes are coming now on the market, and this is normal for the time of the year,
- inventory is -still- not a lot higher in PA, Los Altos and Menlo Park,
- and finally, some buyers have been priced out of the market (hence, a bit less competition).

Whether you are a buyer or a seller, I think a real estate professional has never been so important in helping you see more clearly, and separate the hype from the facts.

Stay tuned! as things change pretty fast here in the Silicon Valley!

Thanks for reading,
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 - our last event there.

Properties off MLS...

Properties off MLS…. controversial.

 A lot has been said and written on the subject of properties selling “off MLS”, meaning they have not been on the Realtors’ Multiple Listing Service and were sold before making it to that database, common to all Realtors.

 Coming from a country where a common database of properties for sale is nearly non-existent, I can definitely vouch for the huge benefits that such a common database offers, both to buyers and to sellers. We could go on and on describing those benefits, but let’s just say that it pretty much ensures that a property for sale, by virtue of being exposed to all the agents around, will sell for its real, highest market value (low, high, but the most accurate result of supply and demand).  Also, a buyer will find all that is available for sale in one place, which means more choice and less wasted time going from one provider of information to another provider of information.

 So, why sell a property “off MLS”?  There are some unique situations where the sellers do not want the whole public to know that they are selling, and that is understandable.  There will always be special circumstances (i.e. very high price range, specific sellers’ needs or preferences, etc..).  But these exceptions aside, I see mostly downsides to not offering a property for sale through the MLS:

-          Less information for buyers and sellers about current sales activity, and "comparables". How do you price a property if you don’t know how, and how much similar homes sold for? This information is easily accessible (and reliable!) in the MLS.

-          A situation where both the seller and the buyer are “gambling”; one gambles that he/she bought for a lower price than if the house had been offered to all potential buyers, the other one gambles that he/she sold for the best, highest price.

-          A lack of confidence by the clients-buyers that they are being treated fairly: after looking for a home for several months and missing out on several offers, a buyer is not happy to learn that “that” house was for sale, but (s)he did not know about it,

-          The creation of smaller entities, or “channels”, where such properties are “known” or “available” to select agents and their clients; again, this is going back to a system without a reliable common database for all, and in my opinion does not serve the public well. Indeed, even those agents may be unaware of some other offerings in a different channel, and their clients will miss out on those opportunities.

 The practice of selling real estate through an MLS is not perfect, but it is the result of an evolution, and it is immensely practical and fair, and someone coming from a system where it does not exist sees it right away.  As an agent, I keep close tabs on all channels showing properties available for sale, even “off MLS”.  But using “alternative channels” excessively undermines the MLS, and I am afraid this will make it more difficult and unpredictable for the public to find or sell real estate – and a lot less efficient.

Let me know what you think!
Thanks for reading,

Francis

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

Revoking a real estate counteroffer.

The life of a real estate purchase offer....

Sellers may be in a situation where they receive what they think is an acceptable offer, one that they wish to work with, and then proceed to counter that offer.  What happens if, prior to acceptance by the buyers, the sellers get another better offer.   Are the sellers trapped? 

No, the sellers may revoke that counteroffer, as long as it is done in due time.  The definition of "due time" and "properly done" can get technical, and a little too involved for this current blog.  If it is not explained carefully by your agent, and if it is not carefully documented, it can be a costly matter.

But the reason for this blog is not to explain the above, it is to stress that many buyers, (improperly informed by their agent), think they can take their time to respond up to the expiration of the time stated on the counteroffer. That period of time however can be cut short by a seller's revocation of their counteroffer prior to the buyers' acceptance and delivery.

Buyers should be aware that the clock is ticking on their response from the time they have received the counter offer, and that they may not have until the expiration to respond.  Buyers who are eager should, therefore, get their response back to the seller as soon as possible after they have received a counter offer - before any revocation can occur.

Hot markets create situations that agents do not usually encounter in slower markets.  It is important to have a knowledgeable agent on your side to keep you informed of your options, and pitfalls to avoid.  The decision is always the clients' to make in the end, but it is important to understand the rules of the game - and I prefer to say, it is important to precisely understand the language of the counteroffer that is given to you. This is where your agent can save you a lot.

Thank you for reading,

Francis

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