California real estate: to keep in perspective...

To keep in perspective:

- California's largest gain in annual median price was in 1977: it went up 28.1% from 1976.

- California median price was $3,527 in 1940, and it was $447,010 in 2014.

- The largest decline in annual median price was in 2008: it dropped 37.8% from 2007.

- Between 1968 and 2014, the median price for single family homes has increased at an annual rate of 6.6%.
Source: California Association of Realtors.

Local Inventory:
In the County of Santa Clara, the number of houses and condominiums on the market went up to 7000-7500 in 2008.
By contrast, it was around 700 to 800 in the first few months of 2015.
This is an essential element of the real estate market locally, and the fact that it is currently (as of the last week of September) at around 1680 is also important: it is a relatively better time to look at buying a property than at the beginning of the year.  The inventory has been steadily increasing.

Thank you for reading!
Francis

 

Silicon Valley real estate

Trends: Local prices and graphs.
A noteworthy local non-profit event:  Second Harvest Food Bank

Median Sales Price - Santa Clara County - Good time to buy now?

Median sales price in Santa Clara County: is it a good time to buy now?

The time is about right now for an update on this fairly important matter, especially for buyers who have been in the market to buy for a while, or are thinking of making a move in the near future.
My last post on the subject, "the ratio of sales price over list price", and last year's post in September "the evolution of average prices" provide some perspective on this (as well as an article last week end in the SF Chronicle, BTW).

Below is the graph showing the monthly change in median price for all homes (houses and condos) sold in the County of Santa Clara, since the beginning of last year (2014).  On this graph we see the median price, and not the average price.  "Median Price" means this: the same number of homes sold over that price, as the number that sold under that price. But one can see that either way, the trend is similar to the one that the average price followed last year.

All in all, it means that it is statistically a better time to buy during the last months of the year than during the first six months of the year, when prices go up - because more people are looking, and need to buy during those months, to be settled in for the next school year.  Probably it also means that fewer people are looking to buy as we get closer to the winter months, and the Holidays.  It can also mean that the homes that sell during that time are in general less expensive than during the first 6 months (smaller homes may be?).  It is not a definitive call that a house will be bought for less money all things considered, but it certainly is worth keeping in mind the seasonal trend.

One last remark on the subject: the trends in years past are a lot more pronounced.  In the past 2 years, or so, the market is such a sellers' market that the slowdown in the market is just mild towards the end of the year.  One should remember that it is still very much a sellers' market, and that there continues to be a strong competition among buyers for the nicest homes.  But my experience has been that buyers are less stressed when buying a house closer to the end of the year.

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

Investing in Real Estate - Where is it best?

Investor clients often ask me where it is best to invest in real estate, in the U.S.

This is a tough question, and there is no easy answer: it depends partly on the circumstances and needs of the client, whether the investor wishes to manage himself/herself, where you believe the best prospects for appreciation are, opportunity, future family needs?...

RealtyTrac puts out a good study on their web site (see "RealtyTrac study on rental condition") showing that the best performing markets for rental returns are:

Baltimore, Maryland:  24.82%, followed by:
Clayton, GA with 24.26%,
Wayne, MI: 21.08%,
Pasco, FL: 19.2% .....

The markets with the lowest return on investment are:

New York County, NY, with 2.34%, followed by:
San Francisco County, CA: 3.2%,
then Kings County/Brooklyn, NY: 3.63%,
Marin County, and close behind San Mateo County and Santa Clara County, at 4.31%
... and Santa Cruz County at 4.54%

Return on investment is defined in this study as gross return: rental price divided into the purchase price.  There is a lot more that goes into a more real "net" return: you have to take into account expenses, which include such costs as: - management company, - repairs, - vacancy, - taxes & insurance, - wear and tear on the house etc ...  More on this subject with this "net operating income" link, noted above.

This study does not look at the rental market from the point of view of someone who has owned a place there for a long time, just someone who would be buying right now, in the market as it is currently.  What I mean is that it does not take into account the appreciation of the asset in that location over time.  This can be a strong factor in the buying decision, and an unknown in the future.

Thank you for reading,
Francis

Silicon Valley real estate

Trends: Local prices and graphs.
A noteworthy local non-profit event:  Coalition on Homelessness, SF - ArtAuction15

Los Altos Below-Market-Housing Update

Los Altos will soon have 17 additional BMR units:

As read in an excellent recent article in the Town Crier by Staff Writer Alicia Castro, Los Altos will soon have 17 additional below-market-rate apartments at the "Colonnade Los Altos" at 4750 El Camino Real (in front of the recently remodeled San Antonio shopping center).  Currently the City has 105 affordable multiple-family BMR units, including 32 rentals and 22 senior units, and 44 second-living units, according to the city's planning services manager, David Kornfield.

 

The requirements for people applying for these below-market units are as follows:

“Very low income” requirement is $37,250 for 1 person to $57,450 for 5 people.  “low income” requirement limits the range from $59,400 for 1 person to $76,400 for 3 people. (based on the County’s median income of $106,300 for a 4-person household).

 

The deadline for preliminary applications was extended to the end of July 2015 in order to allow more eligible applicants to participate.  Preference is given in the selection process to salaried employees of the city, the schools and fire department serving Los Altos residents.  Some preference is also built-in the selection process for Los Altos residents and workers.

More info on this subject in the Town Crier of July 8, 2015.  To submit a preapplication for the lottery process, and for full details on the program, go to: www.leaselosaltos.com/affordable-housing-information  

 

Francis

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