Santa Clara County and Silicon Valley Real Estate Market in June 2012.
The Silicon Valley real estate market is hot. One-half of the Single Family Residences sold in June, sold in 13 days or less. The Average Sale Price exceeded the average Asking (Listing) Price by almost 1.8%.
The Graph shows the Sale Price to List Price ratio, and the Median Days to Sell a Single Family Residence for each City in Santa Clara County in June 2012. Cities with fewer than 10 sales are excluded and all data is from the local Multiple Listing Service (MLSListings, Inc.)
Eleven of fourteen cities had Average Sale Prices that exceeded Average Asking Prices as competing buyers bid home prices up. In 10 of 14 cities one-half of the homes sold in 15 days, or less.
The Santa Clara County and Silicon Valley real estate market began turning around in early 2011 when the number of homes coming onto the market For Sale, that is "listings", started to decline substantially. Last year we experienced record low number of listings.
The declining inventory of home For Sale was particularly odd because about 30% of all home sale were distress sales, either Short Sale or Foreclosures. Usually distress listings increase the normal inventory of home For Sale and add to the total number. But that, inexplicably, has not happened.
As the inventory of home For Sale sale was declining last year, demand was increasing due to the robust Silicon Valley economy. Those market dynamics have been slowly building into a the strong seller's market we're experiencing today.
Homes in the most desirable areas of Silicon Valley sold for well over their asking price. In Mountain View, for example, the Average Sale Price exceeded Average Asking Price by 7%; in Palo Alto, Sunnyvale and Cupertino it was 5%. One-half of the 31 Mountain View homes sales occurred in 9 days or less.
How long will this Santa Clara County and Silicon Valley real estate market last? Of course, no one knows. With Greece and now Spain and Italy teetering in the Eurozone, it's anyone's guess. A dysfunctional congress and administration doesn't give confidence. But it feels to me like we're at the beginning of a sustained seller's market where supply does not keep pace with demand for a long time. The number of distress listings has been declining steadily. Rents have been increasing nearly 10% per year for two years.
Interest rates are a big variable, but instability in Europe makes dollars more attractive which keeps rates low. The Fed is more likely to keep rates low as long as the general economy and hiring are lethargic.
For question or comments about your specific real estate situation, please call or e-mail. The lessons I've learned from 35 years of local real estate sales experience benefit my clients from planning through closing.
Lloyd Binen
Realtor/Broker/DRE 572654
19200 Shubert Drive
Saratoga, CA 95070-4046
Certified Residential Specialist (CRS); Graduate Realtors Institute (GRI)
408-377-4411 or e-mail
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