Santa Clara County real estate pulse... + notable fundraising event

The average price for a house in the Silicon Valley (Santa Clara County to be more precise) went up a whopping 14% when compared with the month of February (to ~ $767K), and about 3.6% over what it was a year ago. (note: this is "average", not "median").

There is a graph, published every week in the San Jose Mercury News real estate section, that shows that about 34% of houses sell for more than list price in the County.  How can it be, one wonders?

Some of it is, for instance, in what happened to one of my clients recently when placing an offer of an REO (= real estate owned; or in other words, a foreclosure): there were 7 offers, and of course the sales price is going to be higher than the asking price.  We have a very enviable situation in our area, in that investors and homeowners alike see value in the Valley, and when prices are low enough, they buy.  Also, there is quite a bit of money in the Valley.  As a consequence, property values are quite sustained, and in the best areas the market is competitive - a sellers' market.


For single family homes - 3-month moving average.

Coming soon near you:  Craft Faire: an exciting fundraising event for our veterans programs. The event will have about 40 crafters indoors and outside at the American Legion Hall, 958 Homestead Road, Santa Clara. The hall is located just a few blocks from El Camino and is near the corner of Lafayette & Homestead. The event will be held on April 9th from 9 a.m. to 4 p.m.

Thank you for reading!
Francis

Silicon Valley real estate.

A few "fast facts" - on local real estate

The inventory of available homes in the area is a sure sign of where prices are going.  Lack of inventory = trends up in prices for the most part.
For the County of Santa Clara, available homes and condominiums combined are as follows, as of March 21, 2011:
2008 = 6899 homes. 2009 = 5979.   2010 = 3467.   2011= 3501.
For the area comprised of Menlo Park, Palo Alto, Mountain View, Los Altos and Los Altos Hills, the figures are as follow:
2008 = 392 homes.  2009 = 685.  2010 = 483.  2011 = 369
This latter figure explains why, currently, about half of the homes offered in Palo Alto receive multiple offers and prices are going up as a consequence.  What I experience is that the best products for sale right now are very much in demand, and based on the number of offers on some of these properties for sale, there are a lot of people in a position to buy "right now".  On the other hand, those properties that are not particularly attractive for some reason or another can linger a long time on the market. Now more than ever quality & desirability rule.

On an other front, according to C.A.R.’s February sales and price report, the median price of an existing single family residence declined about 2.5 percent year over year (California Association of Realtors).  Go figure...
Calif. median home price:
Calif. median home price: February 2011: $271,320 (Source: C.A.R.)
Calif. highest median home price by region/county February 2011: Marin $632,580 (Source: C.A.R.)
Calif. lowest median home price by region/county February 2011: Merced $117,270 (Source: C.A.R.)
- Mortgage rates:   Week ending 3/10/2011 30-yr. fixed: 4.88 Fees/points: 0.7% 15-yr. fixed: 4.15% Fees/points: 0.7% 1-yr. adjustable: 3.21% Fees/points: 0.5% (Source: Freddie Mac)


Thank you for reading.  Let me know if you need specific statistics on your neighborhood.
Francis Rolland
Dir: 650-947-2259
 
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Short sales in California: fewer than 3/5 close ...

I find it difficult to explain to potential buyers the difficulties that short sale situations pose.  A lot of the time, I give a copy of an article or two describing the problems involved.  - and there are many, many different types of problems.

The California Association of Realtors (C.A.R.) released the results of a statewide survey on short sales and the challenges we as REALTORS® face in working with lenders and servicers.

The most vexing problem is the unresponsiveness of the parties involved in the banks, and the length of time it takes to get anything done.  But let's not put all the blame in one place: it is true that the sheer quantity of files that one given person in a bank has to deal with is a challenge, whoever is there to do the work.  But the differences between banks, departments, locations, makes it really difficult to have a standard approach.  When a second or 3rd loan is involved, which is very often the case, then all bets are off...
“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said C.A.R. President Beth L. Peerce. “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.”

Bottom line, these transactions are not for everyone.  You have to be very patient and go with the flow. You cannot put your heart in the property you want to buy.  You should not expect the succession of events to be logical, nor to make sense necessarily.  And you have to know that it may not go through, even if you, on your end, have done all you could and should do:  fewer than 3 in 5...
Francis
http://www.francisrolland.com/
Silicon Valley Realtor, - since 1985.

All cash buyers... a follow up...

To piggy back on my previous post, the number of homes purchased with cash in California jumped to a record 30.9% in January, per DataQuick.  According to the same source, 52% of the homes purchased with cash in Jaunary were being foreclosed on in the prior 18 months - which points to buyers-investors in large part.
Francis
Silicon Valley real estate.
Silicon Valley stats

Silicon Valley: all cash buyers.

Confirming what the studies were showing at the end of 2010, figures came out (DataQuick information services) showing that 26.3% of homes were purchased with cash in Jan. 2011 in the County of Santa Clara, compared with 12.6% in Jan. of 2007.
In the County of San Mateo, it is roughly the same, at 25.4%
Prices adjusted so much that a lot of investors put their (cash) money where they believe the market will do well in the future.
In February 2011, the median house price is $530,000 in the County of Santa Clara, and higher in the County of San Mateo: $634,000. - there are as many houses that sold over this number as under.

Francis

Silicon Valley real estate
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Smart statistics, locally.

Silicon Valley: Los Altos Hills real estate market

Los Altos Hills ranks 4th on the list of the richest small towns nationwide according to Bloomberg Businessweek: Businessweek, which tallied the 50 most expensive small towns with populations of less than 10,000, indicate that Los Altos Hills notched a median home value of $2.16 million, a 13% decline since last year. The U.S. Census Bureau estimated that Los Altos Hills residents maintain a median income of $218,922.
Los Altos Hills is part of the Silicon Valley in California.  It had 81 properties sold in 2010, 5 of which show reo's or short sales according to the MLS.
Thanks for reading,

Francis

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Current market in Los Altos (Silicon Valley) 2-11

The number of homes over a million dollars dropped a bit in December 2010, but the median sale price of luxury properties inched higher, according to Coldwell Banker Residential Brokerage.
A total of 158 homes sold for more than $1 million in Santa Clara County in Dec., down 8.1 % from Dec. 09. However, the median sale price of million-dollar properties rose to $1.35 million, up 2.5 % from the previous month and 3.6 % from the year before.

Los Altos had the highest number of luxury sales in the county at 35, up from 30 a year ago, and the most expensive sale last month at $3.61 million.

Two other key market indicators were higher as well in December: the “days on average” of million-dollar properties (on the market until they were under contract) came down, and sellers received 97% of their asking price, up from 93 % last year.

Some other titbits from the Coldwell Banker luxury report:

- The most expensive sale in Santa Clara County in Dec. was in Los Altos for $3.6 million

- Los Altos boasted the most million-dollar sales with 35, then San Jose: 30, Palo Alto: 29, Los Gatos: 18, Cupertino: 16. – this is the Silicon Valley…
Francis
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How is the market now, locally (around Palo Alto)?

How does the activity compare with the previous years, in the 5 combined Cities of: Menlo Park, Los Altos, Palo Alto, Mountain View, & Los Altos Hills?

The inventory of all homes for sale stands at 330, with 181 homes over $1 million, and 78 over $2 million.
Exactly a year ago, there were 370 homes for sale, with 231 homes over $1 million, and 118 over $2million.
Exactly 2 years ago, there were 485 homes for sale, with 292 homes over $1 million, and 118 over $2 million.

Clearly there are fewer homes for sale, which traditionally fosters a rise in home prices.

Week-end open houses see a lot of traffic, with many pre-approved buyers ready to buy “right now”. There are also a lot of people who are just starting their search. (I would say about 50%).

The best properties (showing well and/or upgraded) sell with multiple offers, often with all cash offers.  This indicates a lot of potential buyers who have been looking for a long while.

However, I also notice that buyers are very selective, and cautious.

Out of 109 properties for sale in Palo Alto, 50 are pending sale (in contract) with an average number of days on the market of 88 day, before entering in contract. This figure however includes 6 properties which have been on the market for over 200 days… (even one with 644 days on the market). One can say that the market is pretty active, but not unreasonable. It is also unforgiving...

Do you have any experience or input on the subject?

Thanks for reading,
Francis

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