Benford Real Estate, Silicon Valley, Santa Clara County

A shaving was taken off the total number of homes for sale in Santa Clara County for the second month in a row in August. After remaining steady at nearly 3,700 units in spring and early summer, we’re now at our lowest level this year at 3,355. Although this is typical of the annual cycle, this time last year the inventory was still growing. And while it may bring modest relief to sellers who are concerned about soft prices, it means the first-time home buyer market (which has remained vibrant despite broader economic challenges) must face tighter competition with investors and cash-buyers. What the numbers don’t show is that many of these first-time home buyers are unexpectedly finding themselves being outbid on their first-choice homes. With just 2.4 months of inventory it is indeed a Silicon Valley market that slightly favors sellers in terms of units if not in price. Oh, by the way… the average 30-year fixed-rate mortgage last week was 4.09%. We’re (almost) tired of saying how amazingly low the rates are, but there you have it!

The Valley Breakdown – median prices and months of inventory for various parts of Santa Clara County – click image to enlarge

Santa Clara County Listings, Pended Sales, and Closed Sales: Houses, Townhouses, and Condominiums Combined

Vital Signs: (Santa Clara County houses, townhouses, and condos, as of August 2011)
Total Active Listings: 3,355
Average asking price of unsold homes: $895,000 (remember, luxury homes in higher price ranges take longer to sell and skew this number)
Average sales price of sold homes: $654,000
Median sales price of sold homes: $520,000
Average percentage of original asking price obtained by successful sellers: 97%
Average number of cumulative days on market: 66
Closed sales, year-to-date: 10,445
Listings expired during August 2011: 105
Average 1-year appreciation: -3.0%
Months of supply by the end of August, based on closed sales: 2.4 (slight sellers’ market)
Average 30-year fixed interest rate as of September 16, 2011: 4.09%, 0.7 points

We really ought to stop being surprised every time interest rates reach a new low – it seems like just about every month we’re talking about it! As of last Friday (August 19, 2011), the average 30-year fixed-rate mortgage, according to the California Association of REALTORS®, was 4.15% with 0.7% in fees.

If you were born in the ’70s or ’80s, do us one favor – for some jarring perspective, ask your parents what their interest rate was when you were born.

With U.S. credit having been downgraded earlier this month, some predicted rates were on their way back up, but soon thereafter the Federal Reserve vowed to keep interest rates steady for two years. This is akin to putting up a giant billboard saying, “Banks, you might want to make some loans now, and consumers… wouldn’t you love to own a home?” If you’re financially solvent, chances are you can.

The Valley Breakdown – median prices and months of inventory for various parts of Santa Clara County – click image to enlarge

Santa Clara County Listings, Pended Sales, and Closed Sales: Houses, Townhouses, and Condominiums Combined

Vital Signs: (Santa Clara County houses, townhouses, and condos, as of June 2011)
Total Active Listings: 3,521
Average asking price of unsold homes: $896,000 (remember, luxury homes in higher price ranges take longer to sell and skew this number)
Average sales price of sold homes: $677,000
Median sales price of sold homes: $530,000
Average percentage of original asking price obtained by successful sellers: 97%
Average number of cumulative days on market: 68
Closed sales, year-to-date: 8,996
Listings expired during July 2011: 157
Average 1-year appreciation: -3.6%
Months of supply by the end of July, based on closed sales: 2.9 (slight sellers’ market)
Average 30-year fixed interest rate as of August 19, 2011: 4.15%, 0.7 points

The federal tax credits for first-time and repeat home buyers expired on April 30th, and Congress took no action to renew it as some had predicted. The good news is that for those who were in contract by that date, they have until June 30th to close their transaction.

A new tax credit, at the state level, took effect May 1st for first-time home buyers and buyers of new construction homes. But funds for the California tax credit are limited, and most experts predicted that enough home buyers would claim the tax credit to cause the funds to run out within a few weeks.

In the midst of all this, the average sales price in Santa Clara County increased 6% from $648,000 in March to $687,000 in April. The volume of sales was outpaced by an increase in inventory volume, pushing the relative inventory to a supply of 3.1 months, where we consider it to be quite balanced. It is possible that we may see a mild slowdown in our market now that the tax incentives are no longer there; but that does not mean it is an inopportune time to buy! On the contrary, serious buyers may find that they will have more homes to choose from and fewer competing buyers.

Vital Signs: (Santa Clara County houses, townhouses, and condos, as of March 2010)
Total Active Listings: 3,597
Average asking price of unsold homes: $944,000
Average sales price of sold homes: $687,000
Average percentage of original asking price obtained by successful sellers: 97%
Average number of cumulative days on market: 58
Closed sales, year-to-date: 4,190
Listings expired during April 2010: 139
Average 1-year appreciation: 30.6%
Months of supply by the end of April, based on closed sales: 3.1 (balanced market)
Average 30-year fixed interest rate as of May 6, 2010: 5.00%, fees not included

Snapshots, April 2010
Top 3 sellers’ markets in Santa Clara County by zip code:
1t. 94303* (Palo Alto), 1.2 months of inventory
1t. 95119 (San Jose-Santa Teresa), 1.2
3. 95132 (San Jose-Berryessa), 1.5
Top 3 buyers’ markets:
1. 95033 (Los Gatos Mountains), 22.3 months of inventory
2t. 95139 (San Jose-Santa Teresa/Coyote), 9.0 months of inventory
2t. 94086 (Sunnyvale), 9.0 months of inventory
3 most expensive zip codes in Santa Clara County:
1. 94022 (Los Altos/Los Altos Hills-North), median price $1,639,000
2. 95070 (Saratoga), $1,510,000
3. 94024 (Los Altos/Los Altos Hills), $1,480,000
3 least expensive zip codes in Santa Clara County:
1. 95116 (San Jose-East/Central), median price $268,000
2. 95111 (San Jose-Edenvale/Seven Trees), $275,000
3. 95122 (San Jose-East/Hillview), $283,000

* The 94303 zip code also includes a part of East Palo Alto, in San Mateo County. Only the Santa Clara County portion is factored into these statistics.

A monthly report showing what it might have taken, hypothetically, for a renter to become a first-time home buyer in Silicon Valley

In October 2009:

Median sales price among San Jose condominiums under 1200 square feet: $195,000
Monthly payment, assuming 20% down, a 4.98% 30-year fixed-rate mortgage, and estimated taxes, insurance, and HOA dues: $1403.67

Median sales price among San Jose houses under 1500 square feet: $377,000
Monthly payment, assuming 20% down, a 4.98% 30-year fixed-rate mortgage, and estimated taxes and insurance: $2133.75

A monthly report showing what it might have taken, hypothetically, for a renter to become a first-time home buyer in Silicon Valley

In September 2009:

Median sales price among San Jose condominiums under 1200 square feet: $215,000
Monthly payment, assuming 20% down, a 4.94% 30-year fixed-rate mortgage, and estimated taxes, insurance, and HOA dues: $1512.67

Median sales price among San Jose houses under 1500 square feet: $360,000
Monthly payment, assuming 20% down, a 4.94% 30-year fixed-rate mortgage, and estimated taxes and insurance: $2030.50

It’s always been a good idea to have a professional and ethical agent when purchasing (or selling) a house. But it’s become especially important in the last several months. With Santa Clara County inventory shrinking for the seventh consecutive month, and sales continuing to maintain a steady pace especially in the foreclosure market, buyers are being pressured at times to take large risks in order to reach an agreement.

In one case, the broker representing a bank-owned home asked a prospective buyer to remove an important contingency before going into contract. In another, the broker representing the seller on a short-sale asked prospective buyers to make their deposit non-refundable before agreeing to a contract. Such demands are unfair to buyers for several reasons, and probably also make the sellers a legal target should a dispute arise during the transaction.

A knowledgeable agent who is also a strong negotiator can help buyers avoid these and other pitfalls, and also help sellers avoid liability. The Benford Team takes pride in doing this for our clients every day!

And now for the vital signs:

Santa Clara County, Detached Houses and Condominiums/Townhomes, as of September 2009

Total active listings: 3,093
Average (mean) asking price of unsold homes: $1,080,000
Average (mean) sales price of sold homes: $609,000
Average sales price to asking price ratio of sold homes: 99%
Average market time: 53 days
Sales, year-to-date: 10,868
Expired listings, September: 262
1-year average appreciation: -7.9%
Months of supply, end of September: 2.4 (sellers’ market)
Average 30-year fixed interest rate (as of October 1, 2009): 4.94%, fees not included

What’s Hot and What’s Not in Silicon Valley, September 2009:

“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).

Strong Buyers’ Market: Los Gatos Mountains (16.8)

*denotes Alameda County

A monthly report showing what it might have taken, hypothetically, for a renter to become a first-time home buyer in Silicon Valley

In August 2009:

Median sales price among San Jose condominiums under 1200 square feet: $180,000
Monthly payment, assuming 20% down, a 5.07% 30-year fixed-rate mortgage, and estimated taxes, insurance, and HOA dues: $1326.70

Median sales price among San Jose houses under 1500 square feet: $346,000
Monthly payment, assuming 20% down, a 5.07% 30-year fixed-rate mortgage, and estimated taxes and insurance: $1973.54

A monthly report showing what it might have taken, hypothetically, for a renter to become a first-time home buyer in Silicon Valley

In July 2009:

Median sales price among San Jose condominiums under 1200 square feet: $190,000
Monthly payment, assuming 20% down, a 5.29% 30-year fixed-rate mortgage, and estimated taxes, insurance and HOA dues: $1,404.37

Median sales price among San Jose houses under 1500 square feet: $370,000
Monthly payment, assuming 20% down, a 5.29% 30-year fixed-rate mortgage, and estimated taxes and insurance: $2,150.61

A monthly report showing what it might have taken, hypothetically, for a renter to become a first-time home buyer in Silicon Valley

In June 2009:

Median sales price among San Jose condominiums under 1200 square feet: $180,000
Monthly payment, assuming 20% down, a 5.42% fixed rate mortgage, and estimated taxes, insurance, and HOA dues: $1,357.90

Median sales price among San Jose houses under 1500 square feet: $340,000
Monthly payment, assuming 20% down, a 5.42% fixed rate mortgage, and estimated taxes and insurance: $1,998.26

A monthly report showing what it might have taken, hypothetically, for a renter to become a first-time home buyer in Silicon Valley

In May 2009:

Median sales price among San Jose condominiums under 1200 square feet: $161,000
Monthly payment, assuming 20% down, a 4.79% fixed rate mortgage, and estimated taxes, insurance, and HOA dues: $1196.37

Median sales price among San Jose houses under 1500 square feet: $330,000
Monthly payment, assuming 20% down, a 4.79% fixed rate mortgage, and estimated taxes and insurance: $1837.27