With continued low inventory levels and higher demand from buyers, the April median price in the Silicon Valley real estate market jumped to their highest level since 2007 to $800,000 for a single family home — up 24% from the same month a year ago.
Similarly,, the median price in April for condos and townhouses in Santa Clara County was $510,000, compared to $349,000 the same month a year ago which was a phenomenal 46% change.
For San Mateo County, the San Mateo real estate trends showed April median prices at $956,000, compared to $760,000, last year or a 25.8% increase.
A median price figure is the middle transaction so this statistical calculation won’t necessarily translate into an across the board increase for each and every home. What is does indicate is a strong market pressure and an upward trend for the Silicon Valley real estate market.
The frequency of the sale prices exceeding list prices is 73% in Santa Clara County and 68% in San Mateo County. An indicator of the magnitude shows that the sale price to list price ration averages 106.1% and 105.8% in Santa Clara County and San Mateo County, respectively.
An indicator I track closely in addition to the above ones, is the median days on market. This represents how long it takes for one-half of the listings to sell. In Santa Clara County, it is 10 days but just 9 in the Cupertino/Sunnyvale market area (hottest area in the county with a median sale price of $1,223,000) to 17 in the South County area which comprises Morgan Hill to Gilroy with a median sale price of $629,000. For San Mateo County, it is but 11 days.
If a listing lingers on the market significantly longer than the median, well then it is a candidate for an analysis to determine the possible cause(s) including price, condition, marketing, etc.
As the old Meat Loaf song went, “two out of three ain’t bad”. The last three buyers I helped recently, two strategies out of the three were successful. In the first one, with multiple offers, my advise to my buyers was to offer in a range above list price and beat out the second-place offer by just $1,000 with eight offers and a sale price over $800,000. The second buyers didn’t follow my advice, instead choosing to calculate a dollars per square foot against comparable homes in competing against nine other offers. This approach only works when you get lucky as in winning the lotto. Their offer came in tenth out of ten and they missed it by over $100,000. For my third buyer, he listened and followed my advice to offer in a range above list price and even though he didn’t have the highest offer, the seller did accept his offer and closed recently. In the two successes, I not only gave advice on the minimum but on the maximum to pay for the home. By the way, my long-term average is about 60% success rate so these last three upped my average slightly!
In the last few weeks, I’ve noticed a change in the market in the favor of buyers! Many homes have generated multiple offers but not to the extent that we saw in the early part of the year. This is in keeping with the historical tendency as we near Memorial Day weekend that buyers decide they have other things to do — e.g., graduations, weddings, anniversaries, planning for vacation when school gets out, etc. Also noted is that inventory levels or those homes available to purchase have risen lately. For single family residences, the highest inventory in seven months and for condos and townhouses, the highest level in eleven months!
Notwithstanding my prior comments about the market conditions during April, buyers that have pulled back from actively looking for a home for whatever reason, now stand a much better chance of being able to buy with less competition than in the recent past. Mortgage rates still remain at artificially low levels as the Feds continue to purchase a mixture of U.S. Treasury and mortgage-backed securities to the tune of about $85 billion per month! In following the money, a lot of this has gone into asset categories like stocks and real estate.
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