Benford Real Estate, Silicon Valley, Santa Clara County

Santa Clara County’s housing market saw a dramatic increase in both seller and buyer activity during the month of March, with a 14% increase in the number of homes available for sale, and a 39% increase in the number of sales closed from February, while the average sales price increased 6% to $659,000 from $621,000 in February. This also represents a 25% increase over the average price from March 2009, when the average price was $525,000.

The federal tax credit for home buyers, which expires April 30th, is certainly not hampering this activity. Many prospective home buyers are hurrying to get into contract before then. But there’s good news for those who miss it: California recently passed a tax credit of its own for qualified home buyers who make their purchases between May 1 and December 31. Those who take advantage of it will be eligible for as much as $10,000 on their tax returns, with a total of $100 million available to first-time buyers of existing homes, and another $100 million available to buyers of new or previously unoccupied homes.

Vital Signs: (Santa Clara County houses, townhouses, and condos, as of March 2010)
Total Active Listings: 3,407
Average asking price of unsold homes: $921,000
Average sales price of sold homes: $659,000
Average percentage of asking price obtained by successful sellers: 99%
Average number of days on market: 46
Closed sales, year-to-date: 2,958
Listings expired during March 2010: 121
Average 1-year appreciation: 25.5%
Months of supply by the end of March, based on closed sales: 2.8 (sellers’ market)
Average 30-year fixed interest rate as of April 1, 2010: 5.08%, fees not included

Snapshots, March 2010
Top 3 sellers’ markets in Santa Clara County by zip code:
1. 94041 (Mountain View), 1.1 months of inventory
2. 95111 (San Jose-Edenvale/Seven Trees), 1.3
3. 94303 (Palo Alto), 1.4*
Top 3 buyers’ markets:
1. 95033 (Los Gatos Mountains), 11.8 months of inventory
2. 95030 (Los Gatos/Monte Sereno), 8.9
3. 95032 (North/East Los Gatos), 5.3
3 most expensive zip codes in Santa Clara County:
1. 94301 (Downtown Palo Alto), median price $1,875,000
2. 95030 (Los Gatos/Monte Sereno), $1,678,000
3. 95070 (Saratoga), $1,600,000
3 least expensive zip codes in Santa Clara County:
1. 95116 (San Jose-East/Central), median price $225,000
2. 95110 (San Jose-Central), $272,000
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.

The Santa Clara County housing market reached a turning point in June, as the number of homes for sale declined after increasing monthly since December. It is typical for the housing inventory to peak during the summer. While this is a modest decline from 7417 to 7219, it reminds us that the supply of housing is not infinite. Meanwhile, the number of closed sales dipped marginally but pending sales continue to increase in pace. Sellers still need to market and price their homes competitively, but buyers who are waiting for further market declines before making a purchase face an increasing risk of missing the bottom of the market. Nobody knows exactly when property values will begin climbing again, but missing the mark by a few months is insignificant compared to the long-term appreciation seen over periods of 10 or more years!

Here’s a look at the local markets within Santa Clara County. Figures represent months of inventory based on closed sales during the month of June 2008, using data from MLSListings, Inc. The lower the number, the more favorable the market is to sellers; the higher the number, the more favorable the market is to buyers.

Sellers’ Markets: Palo Alto (1.4); Los Altos (1.8); Cupertino (2.3); Mountain View (3.0)

Balanced Markets: Sunnyvale (3.5); San Jose-Almaden Valley (3.7); Santa Clara (4.6); Los Gatos (5.0); San Jose-Willow Glen (5.5); San Jose-Cambrian (5.5); Campbell (5.7); San Jose-Santa Teresa (5.7); Los Altos Hills (6.0)

Buyers’ Markets: San Jose-Blossom Valley (6.7); Saratoga (6.8); San Jose-Berryessa (7.1); Los Gatos Mountains (7.6); San Jose-Evergreen (8.7); Morgan Hill/Gilroy (9.3); Milpitas (9.4); San Jose-Central (9.7)

Significant Buyers’ Markets: San Jose-Alum Rock (14.9); San Jose-South (16.6)

Countywide: 6.6 months of inventory (slight buyers’ market)

Recently, the California Association of Realtors reported a major increase in the percentage of households which could afford to buy an entry level home. Well, we’ve got some more news: When affordability is on the rise, sales follow! Last month, we reported that buyers were out shopping in April as evidenced by the decline in months of inventory based on pending sales. This month, we’re pleased to report that many of those buyers are now homeowners, as there were 1136 closed sales in Santa Clara County in May, a 24% increase from the month before! The pending sales were up too, at 1552, the greatest number seen in over a year. At the same time, the number of homes on the market remained virtually the same, taking some of the pressure off home sellers.

A hot stat: There were 6.5 months of inventory based on closed sales at the end of May, down from a peak of 11.7 in January. We consider a buyers’ market to be anything above 6. Nobody knows when we’ve hit bottom until it’s already happened. But since pending sales have been increasing, it may not be too long before Santa Clara County is out of the slump.

Here’s a look at the local markets within Santa Clara County. Figures represent months of inventory based on closed sales during the month of May 2008, using data from MLSListings, Inc. The lower the number, the more favorable the market is to sellers; the higher the number, the more favorable the market is to buyers.

Sellers’ Markets: Cupertino (1.7); Los Altos (1.9); Palo Alto (1.9); Mountain View (2.2); Sunnyvale (3.0)

Balanced Markets: Los Altos Hills (3.3); Saratoga (3.9); San Jose-Almaden Valley (4.1); San Jose-Cambrian (4.3); Los Gatos (4.8); Santa Clara (5.1); Campbell (5.5); San Jose-Santa Teresa (6.0)

Buyers’ Markets: San Jose-Willow Glen (6.8); San Jose-Berryessa (7.2); San Jose-Blossom Valley (7.4); Milpitas (7.9); San Jose-Evergreen (8.2); San Jose-Central (11.2)

Significant Buyers’ Markets: Morgan Hill/Gilroy (13.4); Los Gatos Mountains (17.5); San Jose-Alum Rock (18.1); San Jose-South (19.7)

Click on images below to view graphs and charts.