Real Estate Report – February 2016

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Multiple Offer Offers

The sellers’ market continues to rage in Silicon Valley. Multiple offers are the norm, especially in desirable neighborhoods, which are those defined by:

  • Low-crime,
  • Good schools,
  • Stable, long-term residents,
  • Neighborhood amenities, such as parks, libraries, tennis and/or basketball courts, and curb appeal,
  • Short commute times and/or public transportation, among other things.

When deciding to buy a home in a multiple bid environment, there are some things buyers must do and some things they can do to increase the chances of winning the offer war.

First, all–cash offers are hard to beat, with no need for appraisals and the ability for the buyer to close quickly.

Yet, they can be beat.  First, don’t just get a pre-approval letter, get a pre-approval letter on steroids.

That kind of pre-approval letter will include some words from the lender verifying that you are a well-qualified buyer. Have the mortgage broker or agent provide some financial information about you and your offer. Also, have your mortgage broker take as much of the loan through the process as possible.

Reduce the loan and appraisal contingency time by pre-ordering an appraisal, this is more probable with smaller banks, direct lenders or mortgage brokers. You can then tell the seller, when you present the offer, the appraisal has been scheduled.

Next, get your inspections done early. Spending a few hundred dollars to get the inspections done within days of having your offer accepted shows the seller you are serious.

The cash buyer is going to expect a discount because he/she is paying all cash. You need to beat their offer.

Lastly, make yourself known to the seller. Write a letter letting the seller know who you are, why you like the home and what your intentions are. It doesn’t always work, but it’s another arrow in the quiver.

 

Real Estate Report – November 2015

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Santa Clara County Stats At A Glance

Year-Over-Year

  • Median home prices increased by 13.8% year-over-year to $970,000 from $852,500.
  • The average home sales price rose by 10.1% year-over-year to $1,220,730 from $1,109,020.
  • Home sales fell by 2.8% year-over-year to 684 from 704.
  • Active listings rose 19.9% year-over-year to 1,656 from 1,381.
  • Sales price vs. list price ratio fell by 0.2% year-over-year to 102.5% from 102.8%.
  • The average days on market fell by 6.7% year-over-year to 28 from 30.

Compared To Last Month

  • Median home prices improved by 1.0% to $970,000 from $960,000.
  • The average home sales price fell by 1.7% to $1,220,730 from $1,241,810.
  • Home sales down by 19.1% to 684 from 846.
  • Active listings dropped 14.7% to 1,656 from 1,941.
  • Sales price vs. list price ratio dropped by 0.4% to 102.5% from 103.0%.
  • The average days on market increased by 6.6% to 28 from 26.

Lack of Affordable Homes to Continue

Housing affordability is one area where California can expect to experience long-term pain. Statewide, the percentage of households that earn enough to purchase a median-priced home rose 34 percent in early 2015 before settling in the low 30s—down from a high of 53 percent in 2011 and 36 percent in 2014. In high-priced coastal cities, percentages have fallen into the teens and lower.

The cause? Too many people, not enough homes being built, and rising prices that make it difficult, if not impossible, for many renters to buy. With renters paying a larger share of their income on rent, it is more difficult for them to save for a down payment.

“When I think about affordability, the first thing I think is, ‘Do we have an adequate supply?’” said Raphael Bostic, Ph.D., Judith and John Bedrosian Chair in Governance and the Public Enterprise at USC’s Price School of Public Policy, who recently returned to USC following three years as chief policy and research advisor to the Secretary of the U.S. Department of Housing and Urban Development.

“In many markets in California, the answer is no.”

Santa Clara County Stats At A Glance – September 2015

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Year-Over-Year

  • Median home prices increased by 12.9% year-over-year to $960,000 from $850,000.
  • The average home sales price rose by 11.7% year-over-year to $1,233,240 from $1,104,120.
  • Home sales fell by 2.2% year-over-year to 891 from 911.
  • Active listings fell 4.2% year-over-year to 2,155 from 2,249.
  • Sales price vs. list price ratio rose by 0.3% year-over-year to 103.8% from 103.4%.
  • The average days on market fell by 14.7% year-over-year to 23 from 27.

Compared To Last Month

  • Median home prices slipped by 0.8% to $960,000 from $967,400.
  • The average home sales price fell by 1.6% to $1,233,240 from $1,252,710.
  • Home sales down by 7.7% to 891 from 965.
  • Active listings dropped 0.6% to 2,155 from 2,167.
  • Sales price vs. list price ratio dropped by 1% to 103.8% from 104.8%.
  • The average days on market increased by 3.4% to 23 from 23.

Market Leveling Off?

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The median price for single-family, re-sale homes went over $900,000 in February. Then, it proceeded to march straight up to a new record of $1,000,000 In May, where it stayed in June.

In July, the median price dropped back to $965,000. Of course, one month a trend doesn’t make. Yet, reports from the field signal a slowing down in activity.

Sales of single-family, re-sale homes were down slightly in July from June, but managed to eke out a small gain year-over-year.

Active listings actually grew last month and were at their highest level last September. Nevertheless, they were down by double-digits for the fourteenth month in a row. Not just down, but down by over 20%.

Pending sales showed single-digit losses for the sixth month in a row. At a 1.2% loss, that is actually a positive.

The sales price to list price ratio has been over 100% for forty-one months in a row.

Looking at median price market momentum, after peaking in the middle of 2013, it has been pretty flat since the middle of 2014.

There is still an enormous amount of money chasing low inventory.

July Market Statistics

Year-Over-Year

  • Median home prices increased by 12.2% year-over-year to $965,000 from $860,250.
  • The average home sales price rose by 10.4% year-over-year to $1,225,200 from $1,109,490.
  • Home sales rose by 0.8% year-over-year to 1,089 from 1,080.
  • Total inventory* fell 14.1% year-over-year to 2,190 from 2,549.
  • Sales price vs. list price ratio rose by 1.4% year-over-year to 105.4% from 103.9%.

Month-Over-Month

  • Median home prices slipped by 3.5% to $965,000 from $1,000,000.
  • The average home sales price fell by 6.7% to $1,225,200 from $1,313,490.
  • Home sales down by 0.6% to 1,089 from 1,096.
  • Total inventory* increased 0.4% to 2,190 from 2,182.
  • Sales price vs. list price ratio dropped by 1.5% to 105.4% from 106.9%.

Condominiums

Year-Over-Year

  • Median condo prices increased by 21.0% year-over-year to $635,000 from $525,000.
  • The average condo sales price rose by 20.1% year-over-year to $696,489 from $579,740.
  • Condo sales fell by 3.4% year-over-year to 429 from 444.
  • Total inventory* fell 27.7% year-over-year to 656 from 907.
  • Sales price vs. list price ratio rose by 2.9% year-over-year to 106.6% from 103.7%.

Month-Over-Month

  • Median condo prices slipped by 2.5% to $635,000 from $651,000.
  • The average condo sales price fell by 2.9% to $696,489 from $716,991.
  • Condo sales down by 4.2% to 429 from 448.
  • Total inventory* dropped 3% to 656 from 676.
  • Sales price vs. list price ratio dropped by 1% to 106.6% from 107.7%.