March saw a record median price for Santa Clara County single family residences. What I did analyze was comparing the previous 15 Marches to march 2014 and noticed the record high median price of $865,000. This represents an increase of 18.3% over the same month a year ago which was $731,000. The last time the median was in the 800’s was in 2007 when it reached $830,000. There have been higher median prices but they have been in months other than March. Turning to closings (closed escrow transactions), closings in March represented the third fewest in the last 15 years. Closings in one month are more times than not, sales the previous month. As we look at inventory, the amount or supply of single family residences available to purchase in Santa Clara County stood at 951, the second lowest March in the last 15 years with only March of 2013 being a bit lower.
The number of sales (accepted contracts) were 5.6% lower than March 2013 while the inventory actually increased 4.7%. This blows the myth that the lower sales are caused by fewer homes (inventory) on the market. Back in march 2000, there was 8.4% higher inventory but 203.7% higher sales! The Silicon Valley real estate market awakens from the winter months with signs that momentum is getting quicker. In the past, I posted that we continue to see good buyer demand and I advised buyers to buy quicker rather than later for this reason. We are now in the months between Valentine’s Day and Mother’s Day which historically has been the strongest selling season with the most buyer activity.
In March there were 70.9% of the sales with sales prices greater than list prices, second highest since March 2000 (an extremely hot real estate market). Additionally, the average sale price to list price ratio stood at 105.8%, higher than the 105.2% for the same month a year ago and means that the average sale took place at better than 5% higher than list price. For history buffs, the record for a March was reached in 2000 at 109.0%! We’re not too far from this level. This indicates that there remains ample buyer demand to further push up prices in the near future. While we don’t have statistics on the number of multiple offer situations or the percentage of them, we can infer it using this indicator.
In a research of 39 closed transactions in the Cupertino-Sunnyvale market area with Cupertino Schools, 37 of them sold above list price or nearly 95% representing a super heated seller’s market.
Silicon Valley real estate trends continue to be positive and we should see higher prices in the future. Mortgage rates have moved higher but have stabilized in the mid-4% range. I see more stable rates going forward as the Federal Reserve still purchases $65 billion a month of mortgage-backed securities and U.S. Treasury securities.
For questions, comments on the Silicon Valley real estate market or update in your neighborhood or your target area you are considering, please contact me and I’ll personally respond to assist you with the current market dynamics. Thanks for reading!