Feb 2023 Update on the Silicon Valley Real Estate Market

Latest stats on the Bay Area real estate market.

The Take-Away:
Year-over-year prices have adjusted: prices have fallen about 15% from the highs of the market in April 2022, and then started to go back up a bit: prices have stopped falling and are now quite well sustained as a whole.  However the picture is different locally depending on how desirable the location is, or the size of the home - since the pandemy larger homes are more desirable.  The premium locations continue to draw multiple offers and experience an active market.  Good pricing is as always key to a good sale.

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Trends At-a-Glance for Santa Clara County Trends At a Glance Jan 2023 Previous Month Year-over-Year Median Price $1,529,000 (+4.4%) $1,465,000 $1,688,890 (-9.5%) Average Price $1,932,710 (+9.4%) $1,767,070 $2,041,660 (-5.3%) No. of Sales 262 (-35.9%) 409 429 (-38.9%) Pending 869 (+1.9%) 853 902 (-3.7%) Active 533 (+8.3%) 492 389 (+37.0%) Sale vs. List Price 98.9 (+0.2%) 98.7 113.7 (-13.1%) Days on Market 34 (+7.8%) 32 14 (+142.6%) Days of Inventory 61 (+69.1%) 36 27 (+124.4%)

Market Barometer

Prices and Sales Days of Inventory

Sales Year-to-Date Sale Price/List Price Ratio

Market Overview Home Sales Prices Mixed   The median sales price for single-family, re-sale homes rose, month-over-month. It was up 4.4% from December. It was down 9.5% compared to last year. The average sales price for single-family, re-sale homes was up 9.4%, month-over-month. It was down 5.1% year-over-year.  There were 262 homes sold in Santa Clara County last month. The monthly average since 2000 is 987. The sales price to list price ratio rose from 98.7% to 98.9%.  As of February 5th, there were 533 homes for sale in Santa Clara County. The average since January 2000 is 2,703.  It took thirty-four days to sell a home last month. That is the time from when a home is listed for sale to when it goes into contract.   The median sales price for condos was flat 9.4% compared to last January. The average sales price gained 0.9% year-over-year. Condo sales were down 52.8% year-over-year. There were 110 condos sold in December. The sales price to list price ratio rose from 99.2% to 99.4%.  As of February 5th, there were 247 condos for sale in Santa Clara County. The average since January 2000 is 757.  It took an average of thirty-three days to sell a condo last month.   If you are planning on selling your property, call me for a free comparative market analysis.

 

Warm regards,

Francis C. Rolland
Coldwell Banker - Los Altos
- Serving you since 1985

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Americans Misinformed on The Housing Market

 Source: The Hill

Americans who are planning to purchase a home in 2023 are woefully misinformed about the nation’s mercurial housing market, even as millions of them prepare to buy homes, according to a survey by NerdWallet. On average, they hope to spend $269,200, which falls more than $100,000 short of the median home price, which was $388,100 in December, according to the real estate brokerage Redfin. Home prices crossed the $269,000 threshold sometime in 2013, Federal Reserve statistics show. 

Two-thirds of those surveyed said they expect an imminent crash, however, real estate economists do not. Lawrence Yun, chief economist for the National Association of Realtors, forecast an average sale price of $385,800 this year, about the same as last year. Redfin predicts a 4 percent drop: bad news for sellers, but hardly a crash.   

See the whole article here.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

About 1/3 of US Home Purchases Were Paid in Cash

 About one-third of U.S. home purchases were paid in cash.

Nearly one-third (31.9%) of U.S. home purchases were paid for with all cash in October, according to a report from Redfin. That’s up from 29.9% a year earlier and the highest share since 2014.

All-cash home purchases increased in 29 of the 39 metros in Redfin’s analysis from October 2021 to October 2022. They increased most in Riverside, Calif., where they rose to 38% of all home sales from 19.2%. The lowest share of all-cash purchases was in the West coast market, especially in the Bay Area of California. Just 14.3% of home purchases in San Jose and 16.5% in Oakland were paid in cash. 

Source: National Mortgage Professionals

Like my updates? Subscribe to my Blog! Thank you for reading,

Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Guide to Buying Your First Home

Down times are excellent times to be buying a home.  

Some of my clients were not bothered buying their first home in the worst of time, like at the worst of the last crisis.  With hindsight, they are the smart ones now.  Yes the market has slowed down, and prices are back to what they were last year, but so what? Buying a home is for the long term.

I always remind my clients: as long as you can afford comfortably the home you buy, you have a fairly
stable job, and you know you can find a new job should you lose your current one, then any time is good.  If you know you may have to sell in one or two years, then it may be best to continue renting until you are more sure of your situation.  Otherwise, why continue paying a mortgage - your landlord's mortgage?

This being said, buying a house requires a significant amount of money and time. The journey isn’t always easy, but when you get the keys to your new home, it can be one of the most rewarding feelings ever. 

Knowing the home-buying journey, what tools are at your disposal and creating relationships with experts who can help you get the job done is the key to getting there.

 Here is a link to this nice article, a recap of what to think about.  Source: House Logic

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Francis

Silicon Valley real estate

Tre

nds: Local prices and graphs.

How much is your home worth?

Conforming Loan Limits are raised to $1,089,300 !

 Conforming Loan Limits are raised to $1,089,300  by the Federal Housing Finance Agency, and this is a big deal for home buyers in California.  

Why is it so?  because "jumbo loans" which amounts would be higher than the "conforming loan limit" are less flexible in their conditions.  This means that buyers can qualify more easily as they seek to purchase a California home, which is often much higher than the previous limit of $970,800 in high cost areas.  This nationwide figure needed to adjust to the price level that is more common in California.

“C.A.R. [the California Association of Realtors] applauds the FHFA for its continued commitment to homeownership by increasing the conforming loan limits. The higher limits will help make homeownership more accessible to Californians across the state and provide homebuyers with more financing opportunities,” said C.A.R. President Jennifer Branchini, a Bay Area REALTOR®. “This year in California, nearly one out of every four homes sold between $1.25 million and $2 million were purchased by first-time homebuyers,” Branchini said.

C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) both have long advocated for loan limits that reflect an area’s cost of housing. As a result of C.A.R.’s and NAR’s efforts, areas with high median home prices have benefited from a loan limit above the national conforming loan limit.

Source: California Association of Realtors

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

International Home Purchases in California Drop

 Key Highlights

International buyers purchased $59 billion worth of U.S. residential properties from April 2021–March 2022, up 8.5% from the previous year and breaking a three-year streak of declines. 

The average ($598,200) and median ($366,100) purchase prices for international buyers were the highest ever recorded by NAR.

China, Canada, India, Mexico and Brazil were the top five countries of origin by U.S. residential sales dollar volume. The top U.S. destinations for foreign buyers were Florida, California, Texas, Arizona, New York and North Carolina.

See the full article here by Troy Green, National Association of Realtors.

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

A Few Local Real Estate Pointers

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Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Just Sold: 876 Elbridge Way, Palo Alto

Santa Clara County Home Prices Seasonality

These are the average and median prices for all sold homes combined in the County of Santa Clara over the past 2 and a half years, month after month.

In this graph we can see that:

- while January is always lower, the best months for a higher sales price (in average) are March to June. while we note that, we have to remember that January average prices are the results of DEC. sales, so all months graphs are the results of the previous months sales.  It is not true of all transactions, of course, but we are talking "statistics" here.  This is over a large number of transactions.

- the arrows point to the usual rebound in prices in September and October, after the months of July and August, which are traditionally slower.

- the months of November and December are traditionally slower and prices are down during these months - as an average.  This was not true this past year though in 2021, and this is noteworthy.  In fact, "in the trenches", us Realtors were surprised to see the level of activity in November and December.  In general at that time of the year buyers can expect a more relaxed and slower market.   Well, not in 2021! 

- prices in 2022 are geared for an overall up year as an average; the market started very strong at the beginning of the year, and as we now know has slowed down significantly around may (which is more visible on the median price graphs).  However the market is still very active, just not at the high of April-May.  The market is now more balanced, with fewer multiple offers and prices which have scaled back at the level of six to nine months ago.  

It is important to remember that:

1/ multiple offers depend on the asking price.  A very low asking price will draw multiple offers.

2/ it is not expected that prices will "crash" as demand is still very strong, and interest rates are still historically low, as the 3rd graph shows.

3/ a recession, even if it comes around, does not equate necessarily to lower real estate prices - see the last graph.

4/ most analysts and banks forecast real estate prices up every year for the coming years.

Like my updates? Subscribe to my Blog! Thank you for reading,

Francis

Silicon Valley real estate
Tre

nds: Local prices and graphs.

How much is your home worth?

Just Sold: 876 Elbridge Way, Palo Alto