Silicon Valley Real Estate Market Trend Report:

Santa Clara County (SCC): Upcoming Tech IPOs to Boost Prices

2019 is slated to produce a long list of multi-billion-dollar IPOs from San Francisco Bay Area heavyweights like Lyft, Uber, Palantir, Pinterest, Airbnb, Slack, Postmates, and Instacart. The result will be a massive and sudden injection of liquid cash into a region already infamous for having the nation’s priciest real estate, according to Patrick Howell O’Neill, writing for Gizmodo.

One of the projections in his article is the IPOs will produce 211 techie buyers to purchase property above $10 million, while thousands more are expected to buy above $1 million.

To read the full article, go to https://tinyurl.com/y45rc6qy

In the meantime, buyer exhaustion is still evident in the Bay Area. Home sales were down, year-over-year, for the tenth month in a row. There were 482 homes sold in Santa Clara County last month. The average since 2000 is 987.

Sales prices continue to show some weakness. The median sales price for single-family, re-sale homes has been lower than the year before three of the past four months. The average sales price has been lower four months in a row.

Inventory continues to expand. It has been higher than the year before nine months in a row. Last month, it was up 70.4% over last year.

As of March 5th, there were 917 homes for sale in Santa Clara County. The average since January 2000 is 2,778.

It is taking thirty-two days to sell a home. That is the time from when a home is listed to when it goes into contract.

Prices for re-sale condos were up last month from the month before, but were down year-over-year.

The sales price to list price ratio went back over 100%: 100.7%.

Condo sales were down 8.5% year-over-year.

Inventory continues to expand. It has been higher than the year before nine months in a row.

As of March 5th, there were 421 condos for sale in Santa Clara County. The average since January 2000 is 757.

Days of inventory dropped to sixty-one .

It is taking thirty-seven days to sell a condo.

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

February 2019 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

Rearview Mirror Reflecting Softer Patch (SCC & SMC)

March 1, 2019 — Although certain confirmations were delayed by the month-long government shutdown, there can be no doubt that economic activity in the fourth quarter of 2018 softened somewhat.

Data covering the end of that period is still trickling out, but December seems a long time ago now, and of course, things continue to change. Newer data covering January and February suggest relatively improving fortunes for the U.S. economy even as there are a number of headwinds.

In his semi-annual testimony before Congress this week, Federal Reserve Chairman Jay Powell noted that the picture has turned more mixed, saying that “Over the past few months we have seen some crosscurrents and conflicting signals,” and adding that “Right now, the predominant risks to our economy are slowing global growth.”

After the December rate hike further spooked already-unnerved financial markets, the Fed took great pains to explain that despite the increase, it had moved to a more patient, neutral stance. That message has been played at every opportunity, and soothed markets have since improved measurably. It was reiterated again this week by Mr. Powell.

“With our policy rate in the range of neutral, with muted inflation pressures and with some of the downside risks we’ve talked about, this is a good time to be patient and watch and wait and see how the situation evolves,” he stated Tuesday before the Senate Banking Committee.

Amid the worst December for stock markets in about 90 years and the highest 30-year fixed mortgage rates in about 7, it’s little wonder that housing starts plummeted during the month. An 11.2% decline in new residential construction was tallied during the month, with housing starts dropping to 1.078 million annualized units under construction. Single-family starts declined by 6.7%, falling to 758,000 while those for multi-family units slumped 20.4% to 320,000 units under construction. Permits for future activity were rather improved by comparison, rising by 0.3% to 1.326 million for the period. As well, builder sentiment also has improved of late, so the prospects for firmer activity seem pretty solid. We’ll get the December report for sales of new homes on March 4, but there will have been two months of actual activity reflecting improving conditions since then.

Lower mortgage rates help home sales, of course. Since December’s 7-year highs, 30-year fixed-rate mortgages have retreated to one-year lows, and that has sparked some interest. The National Association of Realtors noted that its Pending Home Sales Index rose by 4.6% in January compared to December, and with a 45- to 60-day lag to closing and recordation, it would seem that we’ll start to see an upturn in existing home sales before long.

With the still-solid GDP report covering the fourth quarter leading the way, underlying interest rates that influence fixed-rate mortgages moved higher late in the week and mortgage rates are likely to follow. However, the GDP report is backward-looking and we’re already two-thirds through the first quarter of 2019, where incoming data has generally has had a mixed-to-softer tone. With this in mind, while odds may favor firmer mortgage rates in the next week there will likely also be a bit of present-reality tempering in place. As such, we think that the average 30-year FRM as reported by Freddie Mac next Thursday will rise by perhaps just four or five basis points.

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

HOME PRICE GAINS

ANNUAL GAINS FALL TO 4.7% TO END 2018 ACCORDING TO S&P CORELOGIC CASE-SHILLER INDEX

NEW YORK, FEBRUARY 26, 2019 – 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 December 2018 shows that the rate of home price increases across the U.S. has continued to slow. More than 27 years of history for these data series is available, and can be accessed in full by going to https://bit.ly/2TjNuPI

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

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San Mateo County (SMC): Upcoming Tech IPOs to Boost Prices

2019 is slated to produce a long list of multi-billion-dollar IPOs from San Francisco Bay Area heavyweights like Lyft, Uber, Palantir, Pinterest, Airbnb, Slack, Postmates, and Instacart. The result will be a massive and sudden injection of liquid cash into a region already infamous for having the nation’s priciest real estate, according to Patrick Howell O’Neill, writing for Gizmodo.

One of the projections in his article is the IPOs will produce 211 techie buyers to purchase property above $10 million, while thousands more are expected to buy above $1 million.

To read the full article, go to https://tinyurl.com/y45rc6qy

In the meantime, buyer exhaustion is still evident in the Bay Area. Home sales were down, year-over-year, for the fourth month in a row. There were 205 homes sold in San Mateo County last month. The average since 2003 is 398.

Sales prices continue to show some weakness. The median sales price for single-family, re-sale homes has been lower than the year before three months in a row. The average sales price has been lower two of the past three months.

Inventory continues to expand. It has been higher than the year before nine months in a row. Last month, it was up 53.2% over last year.

As of March 5th, there were 383 homes for sale in San Mateo County. The average since January 2003 is 1,287.

It is taking thirty-one days to sell a home. That is the time from when a home is listed to when it goes into contract.

Prices for re-sale condos were down last month from the month before, and they were down year-over-year.

Condo sales were up for the second month in a row, rising 2.5% year-over-year.

Inventory continues to expand. It has been higher than the year before seven months in a row.

As of March 5th, there were 112 condos for sale in San Mateo County. The average since January 2003 is 350.

Days of inventory dropped to thirty-seven .

It is taking twenty-nine days to sell a condo.

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

February 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.