– Market turns in favor of sellers.
– Inventory at lowest level since December 2004, and, only at 20% of its peak in July 2008.
– Multiple offers are again the norm.
When you have too much money chasing too few properties, what do you get? You have the Santa Clara County real estate market. Due to a confluence of events, and perceptions, the real estate market in Santa Clara County is out of balance.
The two major events in the Silicon Valley real estate market are a surging tech industry, plus its attendant IPOs, along with a surge of Chinese taking money out of China and moving it into the United States. See this link from USA Today for a full discussion: http://tinyurl.com/cyuom4t.
The major perception, or mis-perception, within the local real estate market by sellers is that the recent and imminent IPOs will generate a few thousand new millionaires thereby exacerbating demand and driving prices up further.
Unfortunately for these sellers’, there’s a new kid on the block, it’s called the secondary stock market. Many of the paper millionaires have already cashed out all or some of their stock in the secondary market and they’re now on the market for homes. See this link from Business Insider for more details: http://tinyurl.com/6m23zv8.
With inventory at its lowest level since December 2004, and at only 20% of its peak in July 2008, multiple offers are once again the norm. This is true in the best neighborhoods, i.e. those with the best school districts.
When we say multiple offers, we’re not talking 3, 5, or 7 offers. No, we’re talking 10, 20 and 30 offers, and, in some instances, 50 offers on the same home.
So, to all you potential sellers out there, it’s time to re-think your strategy.
MARCH MARKET STATISTICS
As was to be expected, the largest price increases for single-family, re-sale homes were in Los Altos, up 19.9% year-over-year, Palo Alto, up 6.5%, Los Gatos, up 8%, and Mountain View, up 12.2%.
Average prices were up even higher, reflecting the high demand for $1MM+ homes. The average price is Los Altos gained 26.8% year-over-year. In Los Gatos, the gain was 15.8%.
Home sales were down 5.9% year-over-year. But, as we mentioned in our opening commentary, that’s more a function of low inventory than demand, which is quite high. Now if only the banks would start releasing some of their inventory onto the market. As of February, the banks owned 1,939 properties, of which only a small percentage are currently listed. Compare that with the 1,288 homes actively for sale.
The median price for condos was up 10.3% compared to last March.
Inventory of both homes and condos continues to be weak. Home inventory was down 29.2% compared to last February. Condo inventory was down 74% year-over-year.
Pending home sales were up 31.8% year-over-year. Condo pending sales were up 10.1% year-over-year.
Go to my on-line site SCVReport.com for the full report, plus a city-by-city breakdown.
If you would like to search for properties in the Santa Clara Valley, go to my online search form at: MLS Search
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