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

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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

Nothing remarkable happened last month! Nope, no changes, no drama. And that’s a good thing, because we’re not in the business of selling our articles or advertising space, but the business of protecting our clients’ real estate interests. We’re not here to hype, but to deliver the facts. And this month, the facts are pretty boring. That’s a good thing, because it means the market in Silicon Valley is stable: look at the chart below and you’ll see a consistent level of both inventory and sales over the last several months.

Yes, foreclosures are still lingering, and there is also talk in legislature about changes to lending guidelines, including requiring a 20% down payment for federally backed mortgages; restructuring Fannie Mae and Freddie Mac; and reducing the conforming loan limit for federally backed loans (which will happen automatically unless Congress acts to extend the current limits). These are all things which could shake up the already delicate real estate market. So maybe something remarkable happened after all: our local market remained stable despite the economic uncertainty. That’s the power of the Silicon Valley economy. Things aren’t perfect here, but they’re sure better than most anywhere else.

The Valley Breakdown – 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: 3,672
Average asking price of unsold homes: $885,000 (remember, luxury homes in higher price ranges take longer to sell and skew this number)
Average sales price of sold homes: $701,000
Median sales price of sold homes: $537,000
Average percentage of original asking price obtained by successful sellers: 96%
Average number of cumulative days on market: 66
Closed sales, year-to-date: 7,681
Listings expired during June 2011: 114
Average 1-year appreciation: 1.2%
Months of supply by the end of June, based on closed sales: 2.4 (slight sellers’ market)
Average 30-year fixed interest rate as of July 15, 2011: 4.51%, 0.7 points

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The Villages is an active adult, over 55, gated community in the eastern foothills of San Jose. The golf club membership is included in the HOA. Over 100 clubs and activities are available, plus restaurants, tennis courts, swimming pools, etc.

Click to tour the house which sits on a quiet court.

Bucking the usual annual trend of an increase in homes for sale heading into summer, the Santa Clara County housing inventory remained virtually unchanged from April to May. Some media outlets are reporting that foreclosure proceedings have slowed as banks and institutional lenders adjust their procedures following the robo-signing scandal. This may be having an impact on the local inventory, whereas a decrease in the percentage of mortgages in default, (meaning fewer homes are going into foreclosure in the first place) also is a factor.

Perhaps more remarkable though is the spike in pended sales in May, which went up to over 2000 for the first time in more than a year. If those deals stay together and close in June and July, without any inventory to replace the sales, there will be some upward pressure on prices, especially with continuously record-low interest rates.

The Valley Breakdown – 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 May 2011)
Total Active Listings: 3,688
Average asking price of unsold homes: $885,000 (remember, luxury homes in higher price ranges take longer to sell and skew this number)
Average sales price of sold homes: $662,000
Median sales price of sold homes: $518,000
Average percentage of original asking price obtained by successful sellers: 96%
Average number of cumulative days on market: 71
Closed sales, year-to-date: 6,100
Listings expired during May 2011: 122
Average 1-year appreciation: -0.2%
Months of supply by the end of May, based on closed sales: 2.7 (slight sellers’ market)
Average 30-year fixed interest rate as of June 10, 2011: 4.49%, 0.7 points

This is a lovely 2 bedroom/2 bath home plus den with a popular floor plan and a view of the valley and green belt. It’s in the Highland Village of The Villages Golf and Country Club gated senior community. It has a newer furnace, air conditioner and carpets. The washer, dryer, and refrigerator stay. There is extra room in the garage for a golf cart or storage. The HOA covers more than most complexes. There are tennis courts, a fitness center, several swimming pools, hiking and riding trails, RV/boat storage lot, a clubhouse restaurant, and more!

Popular Village Highland floor plan