Santa Clara County Real Estate... To Buy Or Not To Buy?

Real Estate Agent with KW Bay Area Estates CA BRE# 00993009

Santa Clara County Real Estate... To Buy Or Not To Buy?




Santa Clara County MapThe Santa Clara County real estate market continues to be fast and furious with multiple offers the norm, especially the nice remodeled homes.  Both single family residences (SFR) and condos have seen  strong appreciation.   Accepted offers are $25K, $50K, $75K or more above the list price.  In this market, the most important number is not the list price, it is the actual fair market value... the REAL VALUE of the home.  The average sales price is skyrocketing upward and days on market are going down, not the most favorable trends for buyers so if you want to make a smart purchase, then bringing in your strongest offer is more likely to insure your success.  The average sales price does not reflect the fact that the good remodeled homes are selling for even higher prices.  Every month will unfortunately mean higher prices so keep that in mind.  See the graph below showing the SFR price going up fast and days on market trends coming down... and condos are not that far off too. How does this affect you, the future buyer?

SCC Ave DOM & Sale to List Price Ratio



You may wonder is it a good time to buy… I get this question all the time.  I believe it depends on your real estate priorities vis-a-vis your desired goals.  For some, they need a home, are tired of renting and throwing away money, have tax considerations, need more space or want to establish roots, to name a few reasons.   As a broker and lender for the past 26 years,  I can advise on when is the best time to buy... and yet, I know the best time for my clients to buy… is when they are ready.  There are many considerations...  Can you afford not to buy?   What are the consequences of not buying?  What are your alternative choices.  This is a big financial and life decision, and it must be made based on what you want, right? 



Check out this link for the most current homes for sale in Santa Clara County and beyond.



That said, a recent national study forecast  indicates that prices are likely to continue to rise til 2017 with pent up demand, low inventories, low interest rates and an improving economy influencing many consumer’s decisions.  Market values have appreciated over four percent since at least 1970 with the most desireable going much higher, and, while you’ve heard that “past performance does not guarantee future Historical US House Price Trendsearnings,”  this is a large body of data to seriously consider.  Four percent may not seem like alot but is is leveraged against a loan, which does not happen too often with the stock market.  Many consumers are shocked that Santa Clara County real estate values have generally been going up strong for the past year and many high demand areas for the past year and a half (see the graph below).  And, many of these high demand areas, e.g. Cupertino, Los Gatos, Palo Alto, to name a few, have actually exceeded their peak values from 2006-2007 though as a county, Santa Clara SFR overall have not topped the peak median prices.  

Santa Clara County Real Estate Sales Price to List Price Trend



The interest rates play a key factor on your purchasing ability and purchasing power.  I like to say that ultimate value, if you are getting a loan, is both the price and the interest rate effects.  As you can see with the interest rate graph below, rates have declined quite a bit to today’shistorically low interest rates.  So how does this benefit you?  Say you bought a home for $600,000 with 20% down in 2006 with 5.5% interest versus purchasing the $600,000 home with 3.5% interest rate, you would save $514.40 per month in mortgage payments alone.   From the cost stand point, you would actually have a stronger purchasing power now even as prices escalate compared to seven years ago.  Granted, this is a very simplified view and yet, many don’t realize how much the interest rate plays on the finances.  And the reality is that you never know when rates will go back up.  While the Feds say they will likely stay with current rates, the rates are creeping upward and one negative event in our economy or globally can change that in an instant… This is a likely to be a matter of not if but when that will eventually happen.Mortgage Rate trends




I have the honor to represent  many great clients and know they are having to make big decisions.  It can seem insane, and yet, it can make a lot of sense to purchase in today's active real estate market.   It is important to me to provide as much information as possible to help them make this decision and try to understand the real estate process and today's hot real estate market and all the details that go into a typical transcation. 


Santa Clara County real estate continues to be red hot and “to buy or not to buy” is a big financial decision for most, if not all consumers.   Some of my suggestions to make sure this is the right move for you are financial and others are personal, including... to be clear on your goals, be clear what is important about owning a home, know what your needs are ( now and in the immediate future), do you have a stable job and are your finances in order to handle this responsibility?  I find that when we are clear of the desired outcome, understand the market dynamics,  then the answers come out much easier and a good decisions are made.  This may help you make the right decision for YOU or give you the confidence to enter today’s Santa Clara County real estate market.  I welcome your comments below and be sure to share this article with your friends who may be experiencing this real estate market.  This article is directed at Santa Clara County and can apply to virtually any parts of our nation.



Santa Clara County Real Estate, James Endo Homes for Sale






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James K. Endo, CDRE# 00993009


Keller Williams Los Gatos Estates

16185 Los Gatos Blvd, Los Gatos, CA  95032

Email:     Direct:  408-560-9021 


Helping  you make the right decisions when it matters most!

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Comments (2)

Stanley Stepak
Howard Hanna - Avon Lake, OH - Avon Lake, OH
Realtor - Avon Lake, Avon, Bay Village, Westlake,

the sale price verses the interest rate numbers show you cant go wrong on your investment of a home today!!

Mar 28, 2013 07:44 AM
James Endo
KW Bay Area Estates - Los Gatos, CA
ABR, CPRES, CRS, SRES... Since 1987!

Thanks Stan!  The interest rates can play a big part, especially when the rates have dropped 2% in the past 5-6 years!  This is huge purchasing power and leverage. 


Mar 28, 2013 09:59 AM