Silicon Valley Real Estate Market Trend Report:

Santa Clara County (SCC): Home Sales Prices Set New Highs in February

The median sales price for single-family, re-sale homes set a new high of $1,485,000 last month. It rose 11.7% compared to last year. That’s the sixteenth month in a row the median sales price has been higher than the year before.

The average sales price for single-family, re-sale homes also set a new high last month. It was up 14.8% year-over-year.

The sales price to list price ratio went from 104.4% to 106.5%. Multiple offers are the norm.

Sales of single-family, re-sale homes were up 24.3% year-over-year in February. There were 583 homes sold in Santa Clara County last month. The monthly average since 2000 is 987.

This was the sixth month in a row that home sales were higher than the year before.

Pending sales were up 29.3% year-over-year.

Inventory of single-family, re-sale homes was down 4.1% compared to last year. That is the eighteenth month in a row inventory has been lower than the year before. As of March 5th, there were 582 homes for sale in Santa Clara County. The average since January 2000 is 2,703.

Days of Inventory, or how long it would take to sell all homes listed for sale at the current rate of sales, rose two days to 27 days compared to January. The average since 2003 is 89.

It took only twenty-five 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 up 7.9% from last February. The average sales price gained 7.4% year-over-year.

Condo sales were up 33.6% year-over-year. There were 342 condos sold in February.

The sales price to list price ratio went from 100.6% to 102.4%.

Condo inventory rose 55.4% compared to last February.

As of March 5th, there were 362 condos for sale in Santa Clara County. The average since January 2000 is 757.

Days of inventory fell to twenty-nine from forty-two.

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

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

February 2021 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

Market Recalibration (SCC & SMC)

February 26, 2021 — Bonds continued their weeks-long selloff this week, lifting the yield on the ten-year U.S. Treasury to levels last seen about a year ago, and dragging mortgage rates higher along with them. Based on the Freddie Mac PMMS, mortgage rates only rose about as far as July levels, but Freddie’s survey week was closing even as Treasury yields were still rising, so not all of the uptick has been realized just yet.

While the current economic data doesn’t seem to support such an upward run, there appears to be a combination of factors at work lifting yields and rates. Most especially, that quickly-falling levels of new COVID-19 infections and increasing levels of vaccination will soon allow a much more complete engagement of economic activity. Although this optimism alone would probably be sufficient to firm rates a bit, the prospects of adding another $1.9 trillion in fiscal fuel to the economic fire as the economy is coming back on line raises investor concerns about the prospects for higher inflation.

With mortgage rates on the uptick, a fair question to ask is whether or not there will be any outsized effect on the housing market. To be sure, an increase in rates is rarely welcomed by potential homebuyers, but even with the rise over the last couple of weeks, rates remain very favorable, just less so. The rise in rates will curtail refinancing, though, as a smaller interest rate gap between an existing loan to a new one can change the refinancing calculation for a homeowner.

As far as home sales go, well, a little cooling in the pace might actually not be a bad thing, as a slowing in demand would allow inventory levels of existing homes for sale to recover a bit and help to damp surging prices. The National Association of Realtors Pending Home Sales Index was already showing a bit of buyer fatigue in January; the sales indicator based on signed contracts eased by another 2.8% for the month, and has drifted back to a level roughly akin to last July (still about 13% above a year ago January, though). Firmer mortgage rates as February progressed may see the PHSI settle back a little more in February as affordability is impinged a bit, but there have been times when a sudden shift in rates has actually seen folks jump into the market before costs and rates get any higher. We’ll know which occurred in a month’s time.

Sales of new homes popped 4.3% higher in January, rising to a 923,000 annual rate, and that on the heels of an upward revision to December sales. Since more can be built on demand, sales of new homes don’t have the same inventory issues as does the existing home market, but supplies here are tight at four months of supply at the present rate of sale. This is an actual 307,000 built and ready to be sold, the highest level of inventory since last May. Also, and while there are issues with shortages of land and skyrocketing lumber prices, the median price of a new home sold last month was $345,600 — up just 1.7% compared to year-ago prices. Conversely, at $303,900, the median existing homes cost was 14.1% higher than a year ago, and existing home prices are likely still set to accelerate into the spring homebuying season, if perhaps at a lesser pace.

With the rise in mortgage rates over the last couple of weeks (and perhaps a bit more yet to be revealed), applications for mortgage credit have been backsliding. Overall, the Mortgage Bankers Association reported a 11.4% decline in requests for mortgage credit in the week of February 19, with the decline nearly equally balanced between an 11.6% drop in applications for purchase-money mortgage and an 11.3% fall in requests for refinancing funds. To be sure, mortgage apps have been declining of late, with the latest week being a third consecutive fall for both purchases and refinances.

So here we are, in the midst of a financial market recalibration, with investors shifting positions abruptly in the last couple of weeks. This isn’t an uncommon occurrence; we had several such episodes in the last year alone, but since those resulted in lower mortgage rates, little concern was expressed. It’s worth remembering that the lowest interest rates are usually a product of the worst economic times, and that market-based (if not policy-based) rates have moved from emergency, shelter-in-place levels in response to both real and expected improvements in economic activity, and that is actually a good thing.

Of course, too much of a good thing can also have negative consequences, so we hope that the uptick and readjustment has run its course for now. Although there are some signs that it has, mortgage rates are still likely to kick higher again next week, probably by another 8 basis points or so… but our crystal ball has been undershooting the last couple of rises. Don’t panic, though… we’ll likely see the highest mortgage rates since… last June.

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 Corner

S&P CoreLogic Case-Shiller Index REPORTS 10.4% ANNUAL HOME PRICE GAIN TO END 2020

NEW YORK, FEBRUARY 23, 2021: S&P Dow Jones Indices (S&P DJI) today releases the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for December 2020 show that home prices continue to increase across the U.S. More than 27 years of history are available for the 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

Is it time to seriously consider investing in real estate?

Signup for my Real Estate Investment Alerts and you’ll receive my real estate investment opportunities.

San Mateo County (SMC): Home Sales Prices Set New Highs in February

The median sales price for single-family, re-sale homes set a new high of $1,914,000 last month. It rose 24.4% compared to last year. That’s the ninth month in a row the median sales price has been higher than the year before.

The average sales price for single-family, re-sale homes also set a new high last month. It was up 14.4% year-over-year.

The sales price to list price ratio rose to 104.8% from 103.1%.

Sales of single-family, re-sale homes in San Mateo County were up for the eighth month in a row, year-over-year, in February. They rose 13.6% year-over-year. There were 234 homes sold in San Mateo County last month. The average since 2000 is 398.

Inventory of single-family, re-sale homes was down 2.7% compared to last year. As of March 5th, there were 321 homes for sale in San Mateo County. The average since January 2000 is 1,287.

Days of Inventory, or the amount of time it would take to sell all homes for sale divided by how many homes have sold, stayed at thirty-seven days.

It took twenty-nine days, on average, 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 11.1% year-over-year.

Year-over-year, the average sales price fell 3.4%.

Condo sales were up 38.4% year-over-year. There were 101 condos sold last month. The average since January 2003 is 122.

Inventory was up 42.7% year-over-year.

As of March 5th, there were 137 condos for sale in San Mateo County. The average since January 2003 is 350.

Days of inventory fell to thirty-seven from fifty-one.

It took an average of thirty-five days to sell a condo last month.

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

February  2021  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.