Silicon Valley Real Estate Market Trend Report:

Santa Clara County (SCC): Home Sales Prices Mixed

The median sales price for single-family, re-sale homes rose, month-over-month. It was up 3% from August. It was up 5.6% compared to last year.

The average sales price for single-family, re-sale homes was up 1.8%, month-over-month. It was down 4% year-over-year.

Sales of single-family, re-sale homes were down for the thirteenth month in a row, year-over-year, in September. Sales fell 22.8%. There were 726 homes sold in Santa Clara County last month. The monthly average since 2000 is 987.

The sales price to list price ratio rose from 100% to 100.4%. Multiple offers continue to be the norm.

Pending sales were down 12.9% year-over-year.

After being down, year-over-year, thirty months in a row, inventory of single-family, re-sale homes was up for the seventh month in a row. It gained 37.6% compared to last year. As of October 5th, there were 929 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, fell from 38 days to 37 days. The average since 2003 is 89.

It took twenty-eight 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 0.9% compared to last September. The average sales price rose 3.4% year-over-year.

Condo sales were down 29.2% year-over-year. There were 320 condos sold in September.

The sales price to list price ratio fell from 100.1% to 100%.

Condo inventory fell 4.3% compared to last September.

As of October 5th, there were 396 condos for sale in Santa Clara County. The average since January 2000 is 757.

Days of inventory fell from forty to thirty-six.

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

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

September 2022 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

The Labor Leg  (SCC & SMC)

Sept 30, 2022 — Once the labor market begins to slow, inflation will likely start to decline. Of course, the question is “when will that start to happen?”, but outside of “probably not too long from now”, the timing is uncertain. It is perhaps the last leg of an economic tripod that has yet to respond to the new economic climate.

The strong bout of inflation helped foster the steepest rise in mortgage rates in many decades, leaving them now at about 15-year highs. As might be expected, the fast run-up in rates has crushed the housing market, first cutting off the refinancing market, where skipping a monthly payment and then starting a new loan with lower payments freed up billions of spendable dollars, further fueling the economy and keeping aggregate demand high. Refinancing activity has declined to about a 22-odd year now, and even higher mortgage rates of late will keep it from returning anytime soon.

Homebuying was next. Already challenged by spiking home prices due to an imbalance of supply and demand, the monthly payment increases that higher prices and more-than-decade high mortgage rates brought have cooled home sales by 25% or more. Although sales of new homes managed a bump for August, where a 28.8% month-to-month increase put the annualized rate of sale at 685,000 units, consider this to be a outlier in a downtrend that began in January. Mortgage rates in August suddenly and unexpectedly had a short-but-significant drop, with Freddie Mac’s offered rate for a 30-year FRM ticking back to 4.99% for a brief time. Folks in the market jumped at the chance to grab the lowest rate in months, but this doesn’t change the overall picture.

July’s 532,000 annual rate of new home sales was 36% below the pace at the beginning of the year, and even with the August improvement the decline is still 18%. Builders also moved likely inventory at a faster clip using discounts, since the median price of a new single-family home sold last month was about $33K less than one sold in July, a 6.3% month-to-month decline. Since that temporary August low for rates, mortgage rates have risen almost 1.75 percentage points and potential buyers have retreated.

We learned last week that sales of existing homes eased in August, posting a 0.4% drop to a 4.80 million annual rate, the slowest pace of existing sales in

more than eight years. This also represents as 26% decline from the start of this year. With conditions for potential homebuyers worsening as the summer came to a close, fewer contracts to purchase homes were executed in August, and the National Association of Realtors Pending Home Sales Index declined by another 2% last month. Declines in pending home sales have been notched in nine of the last ten months, with only May’s 0.4% increase breaking the string of slowness. Leaving out the hard-stop months of the early pandemic, when it wasn’t clear how to buy homes at a time of extreme social distancing, the present value for the PHSI is akin to that seen in May 2011, when the housing market was still a huge mess.

So home sales have been crushed, which hurts a range of service-related industries in real estate and finance. Despite a low-rate-infused August bump, home construction has also slowed, dropping from a 1.78 million-unit annual rate of construction in January to July’s 1.40 million level (about a 21% drop, with August still an 11.3% drop over that time). As new home construction influences industries ranging from lumber to transportation, the drop in activity is likely starting to slow a range of hard-goods industries.

It’s not clear how much more slowing in housing the Fed would like to see. It’s not likely that they are hoping for widespread home value declines, which are said to produce a kind of reverse wealth effect and curtailing consumer spending, but how the market values a piece of real estate probably doesn’t much concern the Fed. At his press conference last week, Chairman Powell noted “For the longer term what we need is supply and demand to get better aligned so that housing prices go up at a reasonable level, at a reasonable pace, and that people can afford houses again, and I think we, so we probably in the housing market have to go through a correction to get back to that place.” He went on to say that “But from a sort of business cycle standpoint, this difficult correction should put the housing market back into better balance.”

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 Decelerated In June

NEW YORK, AUGUST 30, 2022: S&P Dow Jones Indices (S&P DJI) 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 June 2022 show that home prices continue to increase across the United States. 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

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San Mateo County (SMC): Home Sales Continue Falling

After being higher, year-over-year, fourteen months in a row, sales of single-family, re-sale homes in San Mateo County fell for the eleventh month in a row. They were down 33.5% in July. There were 290 homes sold in San Mateo County last month. The average since 2000 is 398.

The median sales price for single-family, re-sale homes was down 6.4% compared to last year.

The average sales price fell 4.3% year-over-year.

The sales price to list price ratio fell from 108.9% to 103.5%.

Inventory of single-family, re-sale homes was up 40.6% compared to last year. As of August 5th, there were 485 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, rose from forty-four to fifty days.

It took nineteen 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 rose 0.3% year-over-year.

Year-over-year, the average sales price fell 3.9%.

Condo sales were down 24.2% year-over-year. There were 94 condos sold last month. The average since January 2003 is 122.

Inventory was up 35.4% year-over-year.

As of August 5th, there were 195 condos for sale in San Mateo County. The average since January 2003 is 350.

Days of inventory rose from fifty to sixty-two.

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

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

August 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.