April Silicon Valley Real Estate Market Update

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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!

March Silicon Valley Real Estate Market Update

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For February in Santa Clara County for single family residences, there were a very low number of closings which would have set a new low except for February 2008 (before the financial crisis!). Closings in one month are more times than not, sales the previous month so these were in large measure indicative of January’s slower activity. As we look at inventory, the amount or supply of single family residences available to purchase in Santa Clara County stood at 776, the second lowest February other than the 721 reached in 2000!

All the while, the Silicon Valley real estate market continues to be rather slow but gaining speed as it usually does this time of the year. Last month, I noted that we saw continued buyer demand to prop up prices and I advised buyers to buy quicker rather than later for this purpose. For February, that translated into a record median price of $801,000, an increase of 12.3% from the same month a year ago. Where else can you reap an average 1% a month return on your investment? I believe this demand will continue and probably increase as we get into the strongest portion of the selling year (after Super Bowl Sunday to just before Memorial Day weekend). I see higher prices ahead with somewhat stable mortgage interest rates.

Last month there were 65.6% of the sales with sales prices greater than list prices, second highest since February 2005 (an extremely hot real estate market). Additionally, the average sale price to list price ratio stood at 104.3%, higher than the 103.9% for the same month a year ago and means that the average sale took place at better than 4% higher than list price. This continues to indicate to me that there is ample buyer demand to further push up prices in the near future as activity usually increases as we go deeper into spring. Also, when we see a sale price higher than list price it infers that there were multiple offers — otherwise why would a buyer offer more!

Silicon Valley real estate trends continue to be positive and we should see higher prices in the future. Mortgage rates have trended higher but have fallen slightly and are currently in the low to mid-4% range. The gains in the stock market help supply of the down payments for some buyers to afford the prices and most buyers using loans decide upon a fixed rate mortgage with 20% or more down payments. Along with this, almost one-third of the closings were cash transactions.

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!

4 Reasons to Stop Renting

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You already know you live in a great community and you can see yourself living here for years to come. You love the specialty lattes at the corner coffee shop, are on a first name basis with the local vet and can’t imagine life without that honest mechanic it took years to find. You’re not leaving anytime soon, so why are you renting?

Benefits of Buying a Home

The Hassles of Renting

The benefits of owning a house far exceed the headaches associated with renting; for starters, that creepy landlord who’s always showing up on your doorstep for one reason or another. One day, he’s knocking on your door wanting access to your apartment because your neighbor’s garbage disposal needs to be fixed and before you know it, 5 maintenance men with muddy boots are tracking dirt across your kitchen so they can snake the sink. Your neighbor thought it was a good idea to put grease down the drain and now you have to deal with the consequences.

Shared Walls

If you’re currently renting or have rented an apartment unit in the past, you are well aware of the downsides of having to share walls. Most of us don’t care to know what music our neighbors listen to, nor do we want to have to listen to it ourselves. Especially at a time that is as inconvenient as when we’re trying to sleep or study. Music or TV at a volume even the deaf can hear is a common complaint among apartment dwellers. When owning a home instead of renting an apartment, not only is this much less likely to happen, but there are additional perks to ensuring financial stability in your future as well.

If your rental unit is upgraded with hardwood flooring, consider yourself one of the lucky ones. If the choices in flooring, paint and hardware in your apartment are unfortunate, there’s not much you can do about it. One of the major reasons to buy a house versus rent is the control to do almost anything you want. Kitchen counters too low? Fix it. White walls bore you? Add some color!

As long as modifications don’t go against the HOA or break area building codes, feel free to add your own personal style and functionality. Never again will the decisions of your living space be in the hands of a landlord whose answer will most likely be NO.

Rent Increases

You have had a long day at work and you’re so happy to finally be walking up to your doorstep, all you can think about is how you’re going to kick off your shoes and put your feet up. That’s when you spot an envelope wedged in the door. It’s a notice of rent increase.

Not only does your landlord have the right to enter your apartment within 24 hours, your landlord also has the right to increase the cost of your living space at any time. For many of us, the last thing we want to come home to, is an unexpected notice of rent increase. Life is stressful enough as it is and living expenses are already high. Buying a home means knowing your monthly cost will never fluctuate and ensuring you’ll never have to come home to one of these depressing letters again.

Want to find out how to purchase a home the right way? Give me a call at 408-830-0092 or send me an email to tom.mcevoy@remax.net to get started. We’ll arrange to meet to get to know each other and I offer a personal, private consultation with me — a top real estate negotiator. I’ll educate you on the home buying process, how lenders work, the importance of inspections, information as to escrow and give you background as to how I use key strategies I’ve developed to help buyers navigate the multiple offer situations prevalent in the market without overpaying.