Posts Tagged ‘February’

Santa Clara Valley Real Estate Report March/April 2012

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HIGHLIGHTS

– 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

If you find the Santa Clara Valley Real Estate Report useful and know someone else who might, please feel free to forward this e-mail to them. There is also a four page printable version with more articles here:
Printable Report.

Santa Clara Valley Real Estate Report – March 2012

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– Mortgage Debt Relief Act to Expire at end of year.

– The median price for homes was up 4.4% year-over-year in February.

– The number of properties owned by the banks was down 15.6% year-over-year.

Once upon a time, when a homeowner did a short sale, the IRS counted the difference between what the bank took and what the homeowner owed as income. Not much incentive there for sellers.

In 2007, the federal government enacted the MDRA that allows qualified taxpayers to exclude that “income”.

The law will end December 31st.  You must close the short sale by then.

Other qualifications include:
· Good for up to $2,000,000 in forgiven debt.

· Only works for principal homes.

· The tax rule can be applied to debt used to refinance your home, provided the principal balance of the old mortgage, immediately before the refinancing, would have qualified.

See “The Mortgage Forgiveness Debt Relief Act and Debt Cancellation” for additional information. Use this link: http://tinyurl.com/5pe43f.

If you are upside down and are having problems making your payments, it’s time to do something. It’s going to take a long time before an upside down property becomes positive.

FEBRUARY MARKET STATISTICS
For fifteen months the median price for single- family, re-sale homes has been lower than the year before. But, in February, the median price was up 4% year-over-year.

Even better, the average price was up 11.9% compared to last February, reflecting that more $1MM+ homes are selling.

Home sales were down 3.4% year-over-year. Condo sales were down year-over-year by 3.9%.

The median price for condos was up 5.1% compared to last February.

Inventory of both homes and condos continues to be weak. Home inventory was down 23.3% compared to last February: 1,389 homes actively listed. Condo inventory was down 70.8% year- over-year.Pending home sales were up 22.9% year-over- year. Condo pending sales were up 12.8% year- over-year.

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