Benford Real Estate, Silicon Valley, Santa Clara County

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

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

In April 2009:

Median sales price among San Jose condominiums under 1200 square feet: $170,000
Monthly payment, assuming 20% down, a 4.78% fixed rate mortgage, and estimated taxes, insurance, and HOA dues: $1245.65

Median sales price among San Jose houses under 1500 square feet: $325,000
Monthly payment, assuming 20% down, a 4.78% fixed rate mortgage, and estimated taxes and insurance: $1807.87

Last month in my market report, I demonstrated just how affordable it can be to own a condo or small house in San Jose, by creating two hypothetical situations and asking my readers to compare their mortgage payment as potential first-time home-buyers to what they’re paying now as renters.

The feedback was so strong I decided to do it again! Sales prices are falling at a slower pace now, but there are still lots of great buying opportunities. And interest rates are unbelievably low, having fallen remarkably since last month.

So let’s look again:

March 2009, median sales price among San Jose condominiums under 1200 square feet: $170,000
With 20% down, a 30-year fixed-rate mortgage at 4.87% costs $719.31 per month. Add property tax, insurance, and homeowners’ association dues, and it’s still possible to be a homeowner at close to $1250 per month. That’s less than the rent for most San Jose apartments. How does it compare to yours?

March 2009, median sales price among San Jose houses under 1500 square feet: $346,000
With 20% down, a 30-year fixed-rate mortgage at 4.87% costs $1464.01 per month. Add property tax and insurance and you could own a house in San Jose for just under $2000 per month. It’s hard to find a house to rent for that little in San Jose, so if you’ve got the means, why not buy one?

Want to run more scenarios? Check out our mortgage calculator (scroll to the top of this page and click on “Calculators”).