San Jose Real Estate * Santa Clara County * Richard Gonzalez * Real Estate Broker * Realty World Powerhouse Brokers

Months Supply of Inventory

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July’s Market data shows a huge drought in available San Jose inventory complicated by the less than two months inventory we are currently experiencing. While there continues to be rumors of an influx of foreclosed homes my feeling is that investors holding the inventory will release it at a measured pace to maximize net profit.

Supply vs Demand

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Another chart showing the shrinking inventory compared to the up swing in sales activity.

Pending Home Sales

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A year ago the amount of inventory was evident but since then the introduction of FHA loans and low interest rates have obviously fueled pending sales activity. Furthermore the low affordable home prices are contributing to the frenzy and cash investors taking advantage of cash flow positive opportunities.

Median Sales Price

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Affordable homes prices between $250,000 and $350,000 are generating twice as many sales thus impacting the median sales price. This is not an indication that home prices are sliding, it shows the huge pool of affordable homes have been moving over the last 90 days.

New Listing Activity

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while we continue to see foreclosure activity and short sales driving the San Jose market more and more sellers are opting to wait out the volatility of the economy before considering trading up to another home. Remember that any seller may have to take consider taking a haircut in price ultimately preventing some sellers from entering the market.

Summary

Affordability continues to be the name of the game. The sweet spot for our market are properties under $500,000. Buyers considering purchasing a home should prepare themselves for a sellers market. Average months of inventory under six months are considered sellers markets. We are currently under two months of inventory.

Silicon valley Bidding War is Back

This mercury news article takes a tour of  the Silicon Valley housing market and affirms what all full time real estate brokers have been experiencing over the last 90 days. “The bidding war is back”  states the headline in this article and to say the least is a true  statement that describes the current housing environment.

Buyers beware; low ball offers will only end up in one frustration after another because of cash coming in from overseas investors and low interest rate loans.

Other buyers are doing their best to time the market and have been in the trenches for months on end. My suggestion to those of you caught up in this market is stay positive and be persistent.

Read Article Here

Click Here to enlarge  County Assessor map for Santa Clara County

Although most of our county has seen some improvement Santa Clara County assessor Larry Stone has expressed concerns about the lack of tax dollars in this San Jose Mercury News article.  The concern is that city and County services are feeling the impact even with a recent jump in the affordable home sale activity. Read the article

HVCC guidelines backfires on buyers during the appraisial process causing unnessisary apprasial costs. As a result the California Association of REALTORS has been lobbying for a Moratorium to address this issue. Its already bad enough as it is working through underwriting delays in the pipeline and now HVCC appears to be affecting a buyers ability to perform in some cases leading to unnessisary fees from lenders.I agree that we need to protect the consumer but this may be overkill.

I am attaching a FAQ published by Fannie Mae Download Document

C.A.R.  Supports  HR 3044
“California Congressman Gary Miller has introduced H.R. 3044, which would place an 18-month moratorium on the recently imposed Home Valuation Code of Conduct (HVCC). The HVCC was worked out through an agreement between Fannie Mae, Freddie Mac, and the New York Attorney General’s Office (NYAG) in response to an investigation by the NYAG into Fannie and Freddie.

The purpose of the HVCC was to try and insulate the appraisal process from undue influences. The HVCC attempted to do this by placing tight controls and restrictions on the ordering of the appraiser, as well as purposes for communicating with the appraiser during the process.  However, the implementation of the HVCC, which came about by neither regulation nor Congressional statute, has resulted in appraisals that cost more, take longer to perform, and are inaccurate.  C.A.R. has heard from members throughout the state of similar difficulties with the HVCC and its negative impact on the California real estate transaction. C.A.R. is supporting H.R. 3044, and is asking California’s Congressional Delegation to sign onto the bill as a cosponsor.”

Bay Area Median up in April

Check out this local news story indicating that the bay area is showing signs of a recovering real estate market.