How is the Silicon Valley real estate market? It’s more of the same this month, with too-low levels of available inventory of homes for sale in Silicon Valley. At this point, the low inventory is a chronic problem for everyone. Inventory is up from the beginning of the year, but no where near “normal”, as you can see in the data below.
Home buyers in the county or on the Peninsula have little or nothing to purchase, and sellers feel trapped – they cannot sell their current home as there are bad odds that they would be able to purchase something else if they did sell. Unless they expect to leave the metro area, they are going to hold on tight in most cases.
Have a look at the inventory of houses on the market from 2001 (the earliest year I can pull from the MLS) to today in Santa Clara County – June is highlighted in a pale yellow to make it easy to find and compare the same month over the last 17 years.
The Silicon Valley real estate market – a look at inventory of available homes for sale:
The numbers really say it all. Even if you are new to the San Francisco Bay Area, you cannot help but notice the relative scarcity of homes for sale this month as opposed to last month or any other dating back to 2001. Therefore, it’s no surprise that solid homes here that are not in the luxury tier for their area (and are aggressively priced, beautifully staged, professionally photographed, and easy to view) are getting multiple offers, high overbids, and selling with no contingencies for inspection, loan, or appraisal. It’s more difficult, but not impossible, for anyone trying to purchase with less than 20% down in multiple offer situations. The key is to have extra money, beyond that 10%, for a potential appraisal deficit.
Here’s how the numbers look for various Silicon Valley communities. You can see all the info for them at popehandy.rereport.com or view the PDF newsletter by clicking the link or the image below.
How about the various parts of the county? The Silicon Valley real estate market varies from one area, price point, and school district to the next. The hottest of the hot markets are in the heart of the tech centers in prices under $2 million.
Sunnyvale has the highest sale price to list price average, with a staggering 116.1%, and Santa Clara is just behind at 113.9%. Only Monte Sereno is coming in at under 100% for the sale price to list price ratio (it is a very high end community). There are no “soft” markets in the bottom 50% of pricing anywhere.
Note that it’s very similar to the South Bay in that most communities have average sale price to list price ratios of over 100%, and the super high end areas like Woodside, Portola Valley, and Hillsborough are seeing milder SP to LP ratios than the more moderately priced cities such as Daly City (120.6%), San Bruno (117.7%), or Belmont (116.2%). These areas are not, generally speaking, luxury markets – so there is much more competition.
As is the normal pattern, San Mateo County is the most expensive of these three, followed by Santa Clara County, and then Santa Cruz County. Living by the coast is a dream for many, and with slightly softer prices and competition, this can be a fantastic retirement option for Silicon Valley homeowners looking to downsize.
In Santa Cruz County, like SMC and SCC, affordability is fueling the hottest market activity. Boulder Creek, known for its abundance of redwoods and rainfall, gleaned the most intense overbids in that county at 104.9% sale price to list price ratio and an average sale price of $570,000 – an absolute bargain relative to nearby areas “over the hill”.
Got a luxury budget? You are in luck!
Home buyers looking to purchase over $3 million (at least in most areas) will find it a good market for them to purchase. Selling under $2 or $2.5 million – again, in most areas – is fantastic for most properties. Who’s got it made? The move up luxury home buyer!
To get more details on the real estate market in Santa Clara County , San Mateo County, or Santa Cruz County, please visit http://popehandy.