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Sales activity lighter than 2009

Santana Row area neighborhoods continue to show lower activity after the homebuyer tax credit expired in April. Buyers continue to pay list price on homes sold in these neighborhoods but the activity has been half of 2009 levels. In 2009 there were 114 sales compared to 54 in May – July 2010.

Conventional is king

Conventional sales were the predominant financing method used to purchase homes following the same pattern of 2009. FHA continues to be in the least used or accepted financing method by sellers when reviewing offers. Buyers should consider conventional loan products to increase their chances of getting an accepted offer.

Median rises in 2010

2010 median sales prices was $610,000 compared to $533,500 in 2010. Buyers also had more negotiating power in 2009 to 97% of original list. 2010 buyers are having to pay slightly more to 102% of original list making it 5% more expensive to buy a home in these neighborhoods.

January 2010 sales data for Santa Clara County.

Chart shows sales climbing slowly while inventory declines

Associated Press article discusses signs of a possible comeback in home sales. Santa Clara County sales over the last 90 days have been HOT to say the least.

Read Article here

NAR May 2009 Existing Homes Sales Data

NAR report credits interest rates, $8,000 tax credit, affordability, and distressed properties for the increased sales but the fuel for this fire is coming more from the lack of affordable homes causing a flurry of multiple offer activity on the sparse inventory in our area.

Read NAR report: REPORT

2009 sales chart

Those of you looking to time the market should take a look at this article from the Mercury News. Affordable homes in Santa Clara County have once again become a reality. Combined with all time low interest rates and first time home buyer programs we have the makings of a combination buyers should not overlook.

Read Mercury New Article

Available Homes

Pending Sales

If I told you I could wave a magic wand and teleport you into the past you would think I was crazy but ladies and gentlemen its true!

As of October 2008 I can now say that we have all been teleported back to November of 1999, that’s because the affordable areas in Silicon valley have returned to 1999 levels. I recently previewed homes in a San Jose neighborhood and was astonished to see the REO(Bank Owned Properties) activity, to my surprise there were homes selling in the $210,000 to $250,000 range. 80% of activity in this area was REO sales, California is averaging an 80% REO close ratio. Unbelievable to see these prices but so surreal. Investors who have been waiting for an opportunity to jump in are now trying to time the market. I’d say not to wait much longer because at these prices its hard to argue the feasibility of having a positive cash flow property at this point.

The Median home price for Silicon valley has catapulted us back to April 2000 levels and as such reflects what we are seeing from the economic downturn. For some this means not only a loss of their 401k net worth but a loss of equity in their homes, for others its an open invitation to pay attention and get ready for a bottom that may come as early as Q3 of 2009. Silicon Valley and the bay area in general have always been the leading indicator for California. Historically speaking we can count on the Bay Area to rebound first.

The bad news is that we have had an average of a $50,000 loss in the Median sold price month over month where the median Sales price went from $719,500 in July to $550,000 in October.

Median days of unsold inventory for the Silicon valley have creped up to 90 days. We are heading into a historically slow time of the year and as such the number of new listing drop off until we get past the Valentines Day Holiday.

With all the negative news the bright spot is that if you price the property right and can be aggressive then the averages are in your favor. Sales price vs list price average shows a 99% average, great news for those who can be aggressive in their list price. Likewise if you manage to get an offer in the first 42 days you have an 19.3% chance of it closing.

Available Homes

Pending Sales

The 2008 Silicon Valley market historically resembles 2001 data.  The next major indicator for our area will be how the market reacts to the current credit turmoil of October 2008, Historically speaking  some spikes in our market place have taken 60 days to correct themselves.

October 2001 was a tipping point and ultimately when the market then began to heat up.  Obviously there are major differences from outside influences affecting the market but if we are trying to get a historical perspective then 2001 is the best year to compare to a 2008 Santa Clara County real estate market.

1/3 of  all Santa Clara County properties has sold over asking price, September coming in at 31.3% of the closed transactions.

We have returned  to the median price point set in Santa Clara County back in May 2000, from 2000 to the 2006 we saw an increase in the median sale price from the low $400,000 to $650,000 and now have see those prices drop back to $470,000.

Transactions that are likely to close are the ones that have been on the market for less than 60 days and properties that have been on the market for over 90 days are likely to TFT (transaction fell through) at an average rate of 12%.

Median days on the market for pending sales was 61, meaning that it took an average of 61 days or less for most people to get into contract.

Pending category is skewed based on our MLS regulations that state “short sales must be reported as pending once an offer is accepted”. As a result we are in contract at record levels, at the highest level in an 8 year average.

Inventory for January 2008 was over 300 Days on the market and is now at 121 of inventory. May 2008 saw an upward trend in the market. Setting aside normal declining levels of inventory during the holidays, it appears as though leading indicators are suggesting a rebound somewhere between February 2009 and April 2009 towards a balanced market environment.