Silicon Valley Real Estate Market Trend Report: June 2016
Santa Clara County (SCC): Inventory Up, Closed & Pending Sales Down
After being lower than the year before for fifty-five months in a row, inventory of single-family, re-sale homes has been higher for the past five months, and for eight of the past ten months.
Part of the reason for higher inventory is a slackening of demand in the upper end of the market. Demand has been driven by IPOs and foreign buyers.
Bay Area IPOs have dried up. While there were over 80 from 2013 to mid-2015, there has only been one so far in 2016. IPO money, and the instant riches it conferred, was a driving force in the upper end of the market the past few years.
In Palo Alto, where the median price for a home is $2.1 million, Silicon Valley mansions – those costing more than $5 million – lingered on the market for 16 days in April 2016, compared to 11 days in April 2015 and 10 days in April 2014, according to Bloomberg.
The surge in the value of the dollar has slowed down foreigners’ appetite for American real estate.
Closed sales have been lower than the year before five months in a row. Pending sales, a harbinger of future closed sales, has been lower for the past six months in a row.
Nevertheless, well-priced homes in the most desirable areas are still fetching multiple offers.
The median price for single-family homes moderated last month. It was up “only” by single-digits. The median price has been up by double-digits for thirty-seven of the past forty-seven months.
The absorption rate for home sales has flattened out and has been between 1.2 and 1.4 months since December 2014.
We expect moderation in the local market to continue and prices will start to flatten.
You can get a more information at: http://avi.rereport.com/market_reports
June Statistics – Home Prices Reach New Highs, Again (SCC)
Single-Family Homes
Year-Over-Year
- Median home prices increased by 5.3% year-over-year to $1,050,000 from $997,500.
- The average home sales price rose by 1.2% year-over-year to $1,330,430 from $1,314,260.
- Home sales fell by 8% year-over-year to 1,045 from 1,136.
- Total inventory* fell 10.5% year-over-year to 2,184 from 2,440.
- Sales price vs. list price ratio fell by 3.2% year-over-year to 103.5% from 106.9%.
- The average days on market rose by 7.3% year-over-year to 21 from 20.
Compared To Last Month
- Median home prices slipped by 6.1% to $1,050,000 from $1,117,900.
- The average home sales price fell by 6.3% to $1,330,430 from $1,419,890.
- Home sales up by 8.6% to 1,045 from 962.
- Total inventory* dropped 3.1% to 2,184 from 2,253.
- Sales price vs. list price ratio dropped by 0.9% to 103.5% from 104.4%.
- The average days on market increased by 9.7% to 21 from 19.
Condominiums
Year-Over-Year
- Median condo prices increased by 4.7% year-over-year to $675,000 from $645,000.
- The average condo sales price rose by 4.3% year-over-year to $742,563 from $712,163.
- Condo sales fell by 14.4% year-over-year to 398 from 465.
- Total inventory* fell 7.1% year-over-year to 706 from 760.
- Sales price vs. list price ratio fell by 3% year-over-year to 104.3% from 107.6%.
- The average days on market rose by 24.9% year-over-year to 17 from 14.
Compared To Last Month
- Median condo prices slipped by 2.9% to $675,000 from $695,000.
- The average condo sales price fell by 4.6% to $742,563 from $778,407.
- Condo sales up by 3.1% to 398 from 386.
- Total inventory* dropped 3.3% to 706 from 730.
- Sales price vs. list price ratio dropped by 0.9% to 104.3% from 105.3%.
- The average days on market increased by 7.4% to 17 from 16.
Call or email me if you have any questions.
For further details and a city-by-city breakdown statistics, go to http://avi.rereport.com/market_reports.
Real estate related Articles
DSnews
June 7th
| DSnews June 7th | Buffett: There is No Housing Bubble |
| The Wall Street Journal By By Eliot Brown June 7th | Neighbors Clash in Silicon Valley |
| San Jose Mercury By Richard Scheinin | Sunnyvale’s Raynor Park: one more island of affordability, gone |
| July 7th Avi Urban | How to reduce your home loan interest payments. Read more |
The Silicon Valley 150 Index Corner
The Silicon Valley’s Real estate market is a derivative of the local economy, it prospers and withers depending on how well the local knowledge-based sector performs. The San Jose Mercury News tracks the largest 150 publicly traded companies headquartered in Silicon Valley via an index called the SV150, which you can lookup at www.mercurynews.com. Stocks are valued based on many criteria, but the most important criterion is a company’s future earnings. Therefore, I view the SV150 as a leading indicator for the Silicon Valley’s real estate market. This month’s annual index chart can be viewed below:
Investors Corner
HOME PRICES CONTINUE GAINS IN APRIL
ACCORDING TO THE S&P/CASE-SHILLER HOME PRICE INDICES
NEW YORK, June 28, 2016 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for April 2016 shows that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can be found on https://goo.gl/X5PQyr
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San Mateo County (SMC): Inventory Up, Closed & Pending Sales Down
After being lower than the year before for thirty-four months in a row, inventory of single-family, re-sale homes in San Mateo County has been higher for the past three months, and for eight of the past ten months.
Part of the reason for higher inventory is a slackening of demand in the upper end of the market. Demand has been driven by IPOs and foreign buyers.
Bay Area IPOs have dried up. While there were over 80 from 2013 to mid-2015, there has only been one so far in 2016. IPO money, and the instant riches it conferred, was a driving force in the upper end of the market the past few years.
In Palo Alto, where the median price for a home is $2.1 million, Silicon Valley mansions – those costing more than $5 million – lingered on the market for 16 days in April 2016, compared to 11 days in April 2015 and 10 days in April 2014, according to Bloomberg.
The surge in the value of the dollar has slowed down foreigners’ appetite for American real estate.
Closed sales have been lower than the year before five months in a row. Pending sales, a harbinger of future closed sales, has been lower for the past five months also.
Nevertheless, well-priced homes in the most desirable areas are still fetching multiple offers.
The median price for single-family homes moderated last month. It was up “only” by single-digits. The median price has been up by double-digits for thirty-six of the past forty-five months.
The absorption rate for home sales has flattened out and has been between 1.2 and 1.4 months since October 2014.
We expect moderation in the local market to continue and prices will start to flatten.
You can get more information at: http://avi.rereport.com/market_reports
June Sales Statistics – Home Prices Reach New Highs, Again (SMC)
Single-Family Homes
Year-Over-Year
- Median home prices increased by 1.9% year-over-year to $1,325,000 from $1,300,000.
- The average home sales price rose by 1.0% year-over-year to $1,649,950 from $1,634,360.
- Home sales fell by 2.3% year-over-year to 418 from 428.
- Total inventory* rose 1.4% year-over-year to 875 from 863.
- Sales price vs. list price ratio fell by 3.6% year-over-year to 106.1% from 110.0%.
- The average days on market fell by 3% year-over-year to 20 from 21.
Month-Over-Month
- Median home prices slipped by 4% to $1,325,000 from $1,380,000.
- The average home sales price fell by 4.8% to $1,649,950 from $1,733,190.
- Home sales up by 13.3% to 418 from 369.
- Total inventory* increased 2.8% to 875 from 851.
- Sales price vs. list price ratio dropped by 0.7% to 106.1% from 106.9%.
- The average days on market increased by 2.4% to 20 from 20.
Condominiums
Year-Over-Year
- Median home prices slipped by 4% to $1,325,000 from $1,380,000.
- The average home sales price fell by 4.8% to $1,649,950 from $1,733,190.
- Home sales up by 13.3% to 418 from 369.
- Total inventory* increased 2.8% to 875 from 851.
- Sales price vs. list price ratio dropped by 0.7% to 106.1% from 106.9%.
- The average days on market increased by 2.4% to 20 from 20.
Month-Over-Month
- Median condo prices slipped by 6.9% to $766,000 from $822,500.
- The average condo sales price fell by 3.6% to $842,584 from $873,615.
- Condo sales up by 7.1% to 120 from 112.
- Total inventory* increased 1.0% to 207 from 205.
- Sales price vs. list price ratio dropped by 1.5% to 105.9% from 107.5%.
- The average days on market increased by 53.5% to 22 from 14.
* Total inventory is active listings plus contingent or pending listings. Active listings do not include contingent listings.
Call or email me if you have any questions.
For further details and a city-by-city breakdown statistics, go to http://avi.rereport.com/market_reports.
