Silicon Valley Real Estate Market Trend Report:

Santa Clara County (SCC): Telecommuting and Real Estate

What effect will telecommuting have on the Bay Area real estate market?

Some expect many telecommuters will move out of the Bar Area to lower-cost areas. If so, this will lower demand which will, in turn, put downward pressure on prices.

To read further about this, go here: https://tinyurl.com/ybafszc2.

Sales & Inventory Continue to Plummet

Sales of single-family, re-sale homes tanked 51.6% in May compared to last year. This is after a 35.8% drop in April. Home sales were down 13.6% compared to April. There were 478 homes sold in Santa Clara County last month. The average since 2000 is 987.

We expect home sales to continue dropping for the next two months.

Inventory of single-family, re-sale homes was down 39.6% compared to last year. That is the ninth month in a row inventory has been lower than the year before. As of June 5th, there were 971 homes for sale in Santa Clara County. The average since January 2000 is 2,703.

The median sales price for single-family, re-sale homes in April was up 3.2% compared to last year. The average sales price was up 2.2% year-over-year.

The sales price to list price ratio dropped to 100.6% from 103.2%.

Days of Inventory, or how long it would take to sell all homes listed for sale at the current rate of sales, rose seventeen days to 61 days compared to April. The average since 2003 is 89.

It took only twenty-three days to sell a home last month. That is the time from when a home is listed for sale to when it goes into contract.

The median sales price for condos was down 5.5% from last May. The average sales price also fell 5.5% year-over-year.

Condo sales were down 62.6% year-over-year. There were 150 condos sold in May.

The sales price to list price ratio fell to 99.5% from 102.1%.

Condo inventory dropped 39.6% from last May.

As of June 5th, there were 450 condos for sale in Santa Clara County. The average since January 2000 is 757.

Days of inventory jumped to ninety from fifty-one.

It took an average of twenty-four days to sell a condo last month.

If you are planning on selling your property, call me for a free comparative market analysis.

May 2020 Sales Statistics (SCC)

* Total inventory is active listings plus pending listings. Active listings do not include pending.

More information is available in our on-line report at http://avi.rereport.com/market_reports

New Record For Rates -Again (SCC & SMC)

May 29, 2020 — Mortgage rates set new “all-time” lows again this week, and having written it several times already, the headline above or one similar to it is one we’ll likely be writing with some regularity in the coming weeks and months.

If you think about it, low rates are a blessing as a result of a curse. Low borrowing costs can help homeowners lower monthly mortgage carry costs, help ease budgetary burdens or even free up funds for new spending or trimming other debts down to manageable levels. As well, lower rates can help potential homebuyers qualify for larger mortgages on a given income, helping them to be able to participate in today’s COVID-19 distorted housing markets.

But these low rates come at a cost, and are the result of a true economic calamity around the globe and certainly here in the U.S. They are here because demand and commerce have both been crushed, already-modest price pressures are being pushed down further and due to both investor demand for safe-haven assets and monetary policy engineered by the Federal Reserve. These low rates reflect the economic misery of many millions who have seen their incomes and livelihoods interrupted, some temporarily but increasingly on a more permanent basis.

Low borrowing costs are only of value if you need or want to borrow money, and more specifically, if you can qualify to borrow that money. No matter how generous they may be or how long they may be available, unemployment insurance funds don’t count as income (in most cases) for mortgage qualifying, and there may be millions of potential borrowers who want or need to borrow money but cannot, and may not be able to do so for some time.

That’s also the case with millions of homeowners in mortgage-payment forbearance plans, although recent clarity from Fannie Mae and Freddie Mac now indicates that a borrower will be again eligible for another mortgage once three timely payments are made at the end of any forbearance period. Still, a request for forbearance is an indication that the borrower can’t make existing mortgage payments, and a borrower in such straits may or may not be able to afford a new mortgage in the future even if they can manage to resume making existing payments by some means.

Social distancing and other roadblocks may continue to bedevil the existing home market for some time, but that’s less the case with new construction, which may seem relatively better supported at the moment. Low mortgage rates will continue to help create demand for both measures, but

the existing home sales market may not start to revive for a few months yet. That’s at least the takeaway from the latest housing data; the National Association of Realtors Pending Home Sales Index for April rang in  a new-low of 69, down from 88.2 in March and well below February’s pre-pandemic 111.4 mark, so the downtrend in sales of existing homes can be expected to continue. The NAR’s PHSI is a measure of contracts signed to buy existing homes, which can take 30-60 days to complete and be recorded as actually sold – so April’s pending sales may show up in May or even June sales tallies.

Sales of new homes did fare a little better in April than in March. With a 0.6% increase to 623,000 (annualized) units sold, the uptick was both unexpected and likely the reason for the small rebound in builder sentiment we detailed here last week. However, the slight improvement didn’t much make a dent in available supply, which slipped to 6.3 months of stock (325,000 actual units) from 6.4 months, so builders won’t be in any rush to accelerate building any time soon. Sales of new homes may have also been goosed a bit by builder discounting; on a year-over-year basis, the cost of a new home in April was 4.3% below a comparable year ago level and on this basis prices have been declining in five of the last six months, and three in a row. Contrast this with the prices of existing homes, which continue to rise strongly, posting a 7.4% year-over-year gain in April. At least for April, the gap between the median price of a new home sold and an existing one was $25,600 — only about  $111 per month more for a new home than for existing, a smaller gap than usual.

Reflecting increased interest in home buying, applications for purchase-money mortgages continued on a six-week positive string, rising by 8.6% in the week ending May 22. The Mortgage Bankers Association’s report also showed a now six-week decline in applications for refinancing with a 0.2% fall. This week’s small move to a new record notwithstanding, mortgage rates have been pretty level for about the last two months, and there are only so many homeowners who can profitably refinance at a given interest rate level. With the decline and associated headlines of “record low rates” its reasonable to expect that we’ll see a pick up in refinance apps in the next week or so.

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

California homeowners interested in building accessory dwelling units on their property just caught a break, potentially shaving off thousands of dollars in fees and permits.

In a move proponents say will help ease the Bay Area’s housing crisis, Gov. Jerry Brown on Tuesday signed Senate Bill 1069, making the so-called “granny units” easier and less expensive to build throughout the state.

For more read California eases restrictions on ‘granny units’

and http://www.hcd.ca.gov/policy-research/AccessoryDwellingUnits.shtml

Helpful resource for home owners

Many new home owners or owners who consider remodeling or rebuilding their homes should take advantage of their county Tax Assessor web site. These web site and their respective city building departments web site typically have vest information regarding the process for applying for permits, the impact on their taxes and many other resources that home owners should be aware are available for them.

For the San Mateo County Tax Assessor office visit http://www.smcare.org/default.asp

For Santa Clara County Tax Assessor visit https://www.sccassessor.org/index.php

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 innovation-based sector performs. The San Jose Mercury News tracks the performances of the largest 150 publicly traded companies headquartered in Silicon Valley through an index called the SV150, which may be found at www.mercurynews.com. Stocks are valued based on several criteria, but one of the more important criteria is a company’s future earnings. Therefore, I see the SV150 as a leading indicator for Silicon Valley’s real estate market.

Investors Corne

S&P CORELOGIC CASE-SHILLER INDEX SHOWS GROWTH IN ANNUAL HOME PRICE GAINS TO END 2019

MAY 26, 2020 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for March 2020 show that home prices continue to increase at a modest rate across the U.S. More than 27 years of history are available for these data series, and can be accessed in full by going to click here

U.S. Housing Markets Moving Into Rent Territory for First Time in Over 8 Years: Report

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San Mateo County (SMC): Telecommuting and Real Estate

What effect will telecommuting have on the Bay Area real estate market?

Some expect many telecommuters will move out of the Bar Area to lower-cost areas. If so, this will lower demand which will, in turn, put downward pressure on prices.

To read further about this, go here: https://tinyurl.com/ybafszc2.

Sales & Inventory Continue to Plummet

Sales of single-family, re-sale homes tanked 44.9% in May compared to last year. Home sales were up 19.6% compared to April. There were 226 homes sold in San Mateo County last month. The average since 2000 is 398.

We expect home sales to continue dropping for the next two months.

Inventory of single-family, re-sale homes was down 16.8% compared to last year. That is the ninth month in a row inventory has been lower than the year before. As of June 5th, there were 469 homes for sale in San Mateo County. The average since January 2000 is 1,287.

The sales price to list price ratio dropped from 104.1% to 100.7%.

The median sales price for single-family, re-sale homes was down, year-over-year, by 7.8%. The average price was up 5.3%.

The median sales price was down 0.4% compared to April. The average sales price was up 11.7%.

Days of Inventory, or the amount of time it would take to sell all homes for sale divided by how many homes have sold, rose one day to sixty-two days.

It took twenty-two days to sell a home last month. That is the time from when a home is listed to when it goes into contract.

The median sales price for re-sale condos fell 14.5% year-over-year. It was down 13.5% from April. The average sales price fell 8.2% from April. Year-over-year, the average sales price dropped 9.4%.

Condo sales fell 51.8% year-over-year. Condo sales were down 25% from April.

Inventory fell 14.1% year-over-year. It was up 33.3% compared to April.

As of June 5th, there were 140 condos for sale in San Mateo County. The average since January 2003 is 350.

Days of inventory jumped to eighty from forty-two.

It took an average of sixteen days to sell a condo last month.

If you are planning on selling your property, call me for a free comparative market analysis.

May 2019 Sales Statistics (SMC)

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.