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

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.

Home sale strategy: set a date for offers, or not?

Home sale strategy: set a date for offers, or not?

You have prepared carefully for the big day when your property goes on the market;  first it goes on MLS, then you have a Realtor tour, and an open house during the week end.  The critical “exposure” time has started, a full marketing campaign is in place, with paper advertising and internet advertising - the world is starting to learn about your house.

Should you hold off for offers until a certain date (hoping for multiple offers), or do you take offers as they come?


Holding off for offers is a good strategy, if the house is well priced: it ensures that the house has been seen enough, and that potential buyers have had the time to decide what they want to do, and look at all the disclosures and reports your agent carefully helped you prepare upfront.  When offers are reviewed, chances are they are well thought out, and you have a choice between solid offers.  Odds are higher the transaction will close without problems.

But the down side of this strategy is that some buyers are turned off by the process, and do not want to participate in a competition.  Also, if you hold off too long, other competing properties will come on the market and you will lose some potential buyers.  Finally, with this strategy comes the difficult choice to make if a “preemptive offer” is presented to you, often higher than the asking price.  If you take it you will never know what the other offers could have been (the ones that followed your instructions and waited for the “offer date”).  If you do not take it you could lose out on that high offer.

So the alternative is to “take offers as they come”.  But what do you do when one comes too fast, may be even higher than your asking price, and you have the feeling that “not enough people have seen the house”?  Could you have a higher offer by waiting for more people to have the time to see the property and work on an offer?  In real estate we say that the first offer is often the best one...  In a typical market it is often true (the subject of another blog), but the Bay Area market is not typical.

Several elements are in play here:

1/ the (pricing) strategy you prefer to use (low, average, high?)

2/ how active the market is at that precise moment.

3/ how easy it is to show your property,

4/ how desirable your property is (objectively),

5/ the quality of the information you get.  The tools your Realtor is using are going to be critically important, in order to assess the real interest your property generates.  You’ll want to know: - number of showings, - number of page views on the various web sites, - how many people are looking at the info online, - and what exactly they are looking at: some info, or all of the info available?

What I would like to stress here is that you must have this conversation with your Realtor ahead of time, and stick to your chosen course of action. One cannot really have it both ways.  If you set a date for offers, and take a pre-emptive offer, you may hurt yourself by never seeing the offers that played by the rule, and waited to come forth.  The thing is that you will never know - it is a gamble.  My experience has been that, in very active markets, it is better to hold off until about a week after the house has been in full marketing mode.  Taking an offer too fast may leave you with a lot of question marks about what other offers could have been a few days later.

Finally, it is critical that your Realtor follows closely any interested party, and answers questions as best as possible: better informed buyers, or agents, will bring you an offer, and one additional offer may mean a big difference in the final sales price.

Thank you 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.

Silicon Valley Luxury Home Sales - up 54% from year ago, Coldwell Banker residential brokerage reports

SiliconValley Luxury Home Sales Up 54% from Year Ago, Coldwell Banker ResidentialBrokerage Reports

by cbwesternregion

Luxury home sales in Silicon Valley surged 54 percent last month from the same period a year ago, according to a new report by Coldwell Banker Residential Brokerage, the Bay Area's leading provider of luxury real estate services.

The figures are based on Multiple Listing Service data of all homes sold for more than $1.5 million last month in Santa Clara County.

A total of 113 homes sold for more than $1.5 million in December, up from 73 in December 2011. The median sale price of a luxury home closing last month was down 7.8 percent from a year ago to stand at $2,019,500.

On a monthly basis, sales in December were down slightly from November's level of 121 transactions, but the median sale price was up 6.8 percent from November's median of $1.89 million.
Other key indicators for the luxury market improved last month from the same period a year ago. There were 58 sales over $2 million compared to 33 a year ago, and 20 sales over $3 million versus six a year ago. Homes also sold faster and sellers received a higher percentage of their asking price on average.

“The luxury market in Silicon Valley closed out 2012 the way it began, with healthy sales and strong buyer interest," said Rick Turley, president of Coldwell Banker Residential Brokerage in the Bay Area.
Turley noted that some of the increase in sales could be due to luxury homeowners deciding to sell before the expected increase in the capital gains tax rate took effect in January. Additionally, demand remained strong from employees of Silicon Valley technology companies with stock option money to invest.

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

• The most expensive sale in Silicon Valley last month was a three-bedroom, two-bath approximately 3,200-square-foot home in Palo Alto that sold for $6.75 million;
• Palo Alto boasted the most luxury sales with 33, followed by Los Altos with 31, Saratoga with 21, and Los Gatos with 14;
• Homes sold in an average of 58 days, down from 65 days a year ago but up from 50 days the previous month;
• Sellers received an average of 101 percent of their asking price, up from 97 percent a year ago and the same as the previous month.

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, Coldwell Banker is recognized around the world for its expertise in the luxury housing market.

Coldwell Banker Residential Brokerage serves Santa ClaraCounty with 21 offices from Palo to Hollister.

Thanks for reading!
Francis

Silicon Valley real estate
Local market: Smart graphs

PS: coming soon: The French Fair, in Palo Alto.  March 23rd, 2013