Despite a return of mortgage interest rates to around 5.5% in June, Silicon Valley home sales held steady thanks to a consistent demand from buyers and investors. Meanwhile, the inventory continued to decline and the end result is we have less than three months’ supply of residential real estate in Santa Clara County, a bona fide sellers’ market in which the average sales price has increased for four straight months.
How can this continue with the rates so “high”? Well they aren’t high. They’re low. And where they were from March through May (below 5%, sometimes as low as 4.5%) was even lower – almost unheard of. So it’s no mystery to us why property values are recovering in neighborhoods where the median price is less than $1 million (i.e., most of the valley). The recovery will continue until we see steady increases in both inventory and interest rates.
Vital Signs:
Santa Clara County, Detached Houses and Condominiums/Townhomes, as of June 2009
Total Active Listings: 3,898
Average (Mean) On-Market Asking Price: $1,024,000 (remember, the recovery is happening primarily in the lower and middle price ranges)
Average (Mean) Final Sales Price: $614,000
Average Sales Price-List Price Ratio (includes only sold homes): 98%
Average Market Time: 62 days
Sales, year-to-date: 6,527
Expired listings in June: 375
1-year appreciation: -26.5%
Months of Supply, end of June: 2.8 (sellers’ market)
Average 30-year fixed interest rate (week ending 6/25/2009, not including points or fees): 5.42%
What’s Hot and What’s Not in Silicon Valley, June 2009:
Numbers represent “months of inventory.” The lower the number, the more likely prices there will be rising (sellers’ market). The higher the number, the more likely prices there will be falling (buyers’ market).
Sellers’ Markets: San Jose-Blossom Valley (1.6); San Jose-South (1.8); San Jose-Alum Rock (1.9); San Jose-Santa Teresa (2.0); Milpitas (2.0); San Jose-Berryessa (2.2); Santa Clara (2.2); Newark* (2.3); Fremont* (2.4); San Jose-Cambrian (2.6); Campbell (2.6); Cupertino (2.6); Sunnyvale (2.7); Mountain View (2.7); Morgan Hill/Gilroy (2.9); San Jose-Evergreen (2.9); Los Altos (2.9)
Balanced Markets: Palo Alto (3.1); San Jose-Willow Glen (3.3); San Jose-Central (3.4); San Jose-Almaden Valley (4.0); Saratoga (5.8)
Buyers’ Market: Los Gatos/Monte Sereno (8.1)
Extreme Buyers’ Markets: Los Altos Hills (14.6); Los Gatos Mountains (17.3)
* denotes Alameda County
