With apologies for being a bit later than usual, the May Silicon Valley real estate trends showed continued upwards median price levels for the Silicon Valley real estate market. May’s median prices ended at $825,000 for Santa Clara County and $1,001,000 for San Mateo County.
In much the same vein, the median price in May for condos and townhouses in Santa Clara County was $507,000.
As you know, a median price figure is the middle transaction so this statistical calculation won’t necessarily translate into an across the board increase for every home. Still, this demonstrates a continued strong market demand with relatively lower supply or inventory of available homes for sale for the Silicon Valley real estate market.
The frequency of sale prices exceeding list prices remained the same in Santa Clara County at 73% and increased to 74% from 68% in San Mateo County. While we don’t have statistics that show the percentage of homes generating multiple offers, I use this as a proxy for that. The magnitude of the over-bidding is represented by the sale price to list price ratio. The ratio showed 105.9 and 106.3 for Santa Clara and San Mateo counties, respectively. Still high but not in record territory.
Median days on the market is another important indicator of the health of the market. Median days on the market is the middle transaction or how long does it take to sell one-half of the available homes on the market. In Santa Clara County, this stood at 10 with the Cupertino and Sunnyvale market area (median price of $1,250,000) the strongest in the county. For San Mateo County, this indicator stood at 12 with the Redwood City market area (median price of $958,000) as the strongest in the county.
If it is not one thing keeping buyers from buying, it is something else. During the last few weeks, it seems that every time the Fed Chairman speaks the markets get jittery. This has caused ripples throughout the bond market as the words seem to indicate that the Quantitative Easing (QE) program where the Fed purchases $85 billion of a mixture of U.S. Treasury and mortgage-backed securities each month may be adjusted sooner. This has spooked investors into fleeing bonds (prices down and yields up). The largest bond fund dropped about 3.65% or $10 billion in value last month alone! So, yes, mortgage rates are up!
Los Altos home sales continue to amaze. Last month, I listed a 3 bedroom, 2 bath, 1,448 SF home on a large, 12,432 SF lot on Stanley Avenue. Well, just two days later and no time for any open houses, we had generated nine offers and it sold for $1,650,000, 18% over the list price of $1,395,000. The home closed escrow in just five days as it was all-cash allowing my seller to purchase a condo in Campbell for cash. The remarkable thing was that the home lacked recent updates or expansions. The buyers will no doubt raise it to rebuild a new home.
So, for the time being, the Los Altos and Palo Alto market area remains strong, especially the Los Altos home sales in the area with list prices below the median of about $2 million.
If you would like me to respond to your question or comment, please let me know. Any observations that you have of what is happening in your neighborhood would be welcome.