Market Trends Report

Silicon Valley Real Estate Market Trend Report: May 2017

Santa Clara County (SCC): Prices Continue Rising

As expected, prices of detached and attached homes rose in April as the Spring selling season got underway.

The median price for single-family, re-sale homes stayed over $1MM for the third month in a row. It has been over $1MM for eleven of the past fourteen months. Oh, and the $1,160,000 is a new all-time high.

The median price for condos/townhomes went over $700,000 to set a new all-time high also.

Nuggets

Below are links to some real estate articles we thought might be useful, or at least informative for you.

A Buyers’ and Sellers’ Guide to Multiple Offer Negotiations: from the National Association or REALTORS®

This white paper from the NAR’s includes tips for both buyers and sellers. http://tinyurl.com/j6t65qs

The advantages of owning real estate in a single-member LLC: From MarketWatch

Tax simplicity + liability protection

Single-member limited liability companies (SMLLCs) are limited liability companies (LLCs) with only one member (owner). As with a corporation, operating a business or investment activity as an LLC generally protects your personal assets from exposure to liabilities related to the activity — under applicable state law. However, SMLLCs offer some unique tax attributes that make them ideal real estate ownership vehicles. Here’s the story on their advantages. http://tinyurl.com/kt5bkdt

3 Mortgage Tricks Every Homeowner Should Know: from the Motley Fool

Saving money on your mortgage payments

  1. Accelerate your 30-year loan
  2. Pay every two weeks rather than monthly
  3. Refinance to a shorter term

http://tinyurl.com/jw2ofjg

April 2017 Sales Statistics

Single-Family Homes

Year-Over-Year

  • Median home prices increased by 7.4% to $1,160,000 from $1,080,000.
  • The average home sales price rose by 6.4% to $1,429,430 from $1,342,830.
  • Home sales fell by 11% to 833 from 936.
  • Total inventory* fell 4% to 2,077 from 2,163.
  • Sales price vs. list price ratio rose by 1.2% to 106.1% from 104.8%.
  • The average days on market fell by 14.8% to 17 from 20.

Compared To Last Month

  • Median home prices improved by 2.7% to $1,160,000 from $1,130,000.
  • The average home sales price rose by 1.9% to $1,429,430 from $1,403,090.
  • Home sales up by 6.4% to 833 from 783.
  • Total inventory* increased 11.8% to 2,077 from 1,857.
  • Sales price vs. list price ratio increased by 1.3% to 106.1% from 104.7%.
  • The average days on market dropped by 22.6% to 17 from 22.

Condominiums

Year-Over-Year

  • Median condo prices increased by 7.2% to $710,000 from $662,500.
  • The average condo sales price rose by 5.1% to $778,377 from $740,476.
  • Condo sales fell by 19.5% to 338 from 420.
  • Total inventory* rose 12.6% to 778 from 691.
  • Sales price vs. list price ratio fell by 0.8% to 104.7% from 105.6%.
  • The average days on market rose by 27.2% to 19 from 15.

Compared To Last Month

  • Median condo prices improved by 1.8% to $710,000 from $697,500.
  • The average condo sales price fell by 0.9% to $778,377 from $785,311.
  • Condo sales down by 5.1% to 338 from 356.
  • Total inventory* increased 13.2% to 778 from 687.
  • Sales price vs. list price ratio increased by 0.2% to 104.7% from 104.5%.
  • The average days on market increased by 2.6% to 19 from 18.

* 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

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Call 650-305-1111 or send me a note to schedule a complementary & confidential one-on-one meeting.

VISIT http://avi.rereport.com/ for a free on-line market analysis of your property.
You can also perform your own personal search of properties for sale.

Slower Growth, Faster Inflation, Stable Rates (SCC & SMC)

Apr. 28, 2017 -Tight supplies of existing homes for sale are squeezing some buyers into the market for new homes.

In March, sales of new homes rose by 5.8 percent to a 621,000 annual rate. This was the second best figure in about 9 years’ time and it wouldn’t take much of an upward revision (just 1,000) to make it number one over that stretch.

Sales of new homes have been in a long-running (if notchy) uptrend since a May 2010 nadir of 280,000 (annualized) units sold. Even with nearly seven years of nearly steady gains, there remains plenty of room for growth, as even before the boom of the last decade, sales routinely ran at about 850,000+, including during the brief recession in 2001.

Despite the increase in sales, inventories of built and ready-to-sell units crept up to 268,000 during the month, some 5.2 months of supply at the current rate of sale. This is a fairly normal level and contrasts starkly with just 3.8 months of available existing inventory.

The spurt in sales engendered some higher prices, too — after two months of lower costs year-over-year, prices in March were 7.2 percent above the cost of a new home sold in March 2016. If a potential 20% tariff on Canadian lumber goes into effect, those costs will be passed along to consumers, and prices here will rise even further.

If the pattern of first-quarter weakness followed by faster growth in the second quarter and beyond holds true, we will likely see a decline in rates.

Eventually, warming data will begin again the drumbeat for a move at the June Fed meeting. Right now, and even with a Fed get-together next Tuesday and Wednesday, we are still in what is a “sweet spot” between the major quarterly Fed meetings, but at the bottom of it — about six weeks past March and about six weeks before June.

With recent meetings as a guide, this is usually a place in time that has seen the lowest mortgage rates of the meeting-to-meeting period. As such, we may be at or just past this point, and may start seeing more firming than not in the weeks ahead.

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.

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Real estate related Articles

San Jose Mercury
Feb. 28. 2017
Bay Area home sales lose steam, but prices climb — a little
San Jose Mercury
Feb. 26. 2017
Sunnyvale: Tristar buys Apple leased offices for $290.7 million
Michael RepkaReal Estate Matters. Representing both buyers and sellers: A conflict of interest? Read more Dual Agency
Avi UrbanHow to reduce your home loan interest payments. Read more
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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

THE S&P CORELOGIC CASE-SHILLER NATIONAL HOME PRICE NSA INDEX SETS FOURTH CONSECUTIVE ALL-TIME HIGH

NEW YORK, APRIL 25, 2017 – 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 February 2017 shows that home prices continued their rise across the country over the last 12 months. More than 27 years of history for these data series is available, and can be accessed in in full at http://bit.ly/2qeXknZ

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San Mateo County (SMC): Prices Continue Rising

The median price for single-family, re-sale homes in San Mateo County reached a new all-time high in April to $1,492,500. The median price has been over $1MM for the thirty-eighth month out of the past thirty-nine months.

On the other hand, the median price for condos/townhomes was down compared to April 2016.

As the Spring/Summer season continues, we expect prices to continue rising.

Nuggets

Below are links to some real estate articles we thought might be useful, or at least informative for you.

A Buyers’ and Sellers’ Guide to Multiple Offer Negotiations: from the National Association or REALTORS®

This white paper from the NAR’s includes tips for both buyers and sellers. http://tinyurl.com/j6t65qs

The advantages of owning real estate in a single-member LLC: From MarketWatch

Tax simplicity + liability protection

Single-member limited liability companies (SMLLCs) are limited liability companies (LLCs) with only one member (owner). As with a corporation, operating a business or investment activity as an LLC generally protects your personal assets from exposure to liabilities related to the activity — under applicable state law. However, SMLLCs offer some unique tax attributes that make them ideal real estate ownership vehicles. Here’s the story on their advantages. http://tinyurl.com/kt5bkdt

3 Mortgage Tricks Every Homeowner Should Know: from the Motley Fool

Saving money on your mortgage payments

  1. Accelerate your 30-year loan
  2. Pay every two weeks rather than monthly
  3. Refinance to a shorter term

http://tinyurl.com/jw2ofjg

April 2017 Sales Statistics

Single-Family Homes

Year-Over-Year

  • Median home prices increased by 12.6% to $1,492,500 from $1,325,000.
  • The average home sales price rose by 2.2% to $1,856,680 from $1,816,080.
  • Home sales rose by 2.8% to 328 from 319.
  • Total inventory* rose 0.1% to 802 from 801.
  • Sales price vs. list price ratio rose by 1.0% to 109.0% from 107.9%.
  • The average days on market fell by 20.1% to 18 from 22.

Compared To Last Month

  • Median home prices improved by 10.1% to $1,492,500 from $1,355,000.
  • The average home sales price rose by 18.8% to $1,856,680 from $1,563,450.
  • Home sales up by 10.1% to 328 from 298.
  • Total inventory* increased 10.0% to 802 from 729.
  • Sales price vs. list price ratio increased by 2.1% to 109.0% from 106.8%.
  • The average days on market dropped by 25.7% to 18 from 24.

Condominiums

Year-Over-Year

  • Median condo prices fell by 6.4% to $765,000 from $817,000.
  • The average condo sales price dropped by 1.8% to $869,897 from $885,853.
  • Condo sales fell by 12% to 103 from 117.
  • Total inventory* rose 3.8% to 218 from 210.
  • Sales price vs. list price ratio fell by 2% to 104.7% from 106.8%.
  • The average days on market rose by 44.6% to 23 from 16.

Compared To Last Month

  • Median condo prices slipped by 7.9% to $765,000 from $830,500.
  • The average condo sales price fell by 3% to $869,897 from $896,530.
  • Condo sales down by 9.6% to 103 from 114.
  • Total inventory* increased 1.4% to 218 from 215.
  • Sales price vs. list price ratio increased by 0.1% to 104.7% from 104.6%.
  • The average days on market increased by 3.4% to 23 from 22.

* Total inventory is active listings plus pending listings. Active listings do not include pending.

You can get more information at: http://avi.rereport.com/market_reports

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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.

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Looking to Downsize?

Keep Your Property Tax Base

Under Proposition 60, California homeowners 55 and older get a one-time chance to sell their primary residence and transfer its property-tax assessment to a new one, but the market value of the new home generally must be equal to or less than the market value of the old home.

Prop. 60 was designed to help longtime California homeowners who want to downsize but don’t want to give up the low property-tax assessment they enjoy in their existing home.

Under Proposition 13, homes are reassessed for property-tax purposes when there is a change in ownership or new construction. In between ownership changes, the assessed value can go up by an inflation rate not to exceed 2% a year. (Homeowners can get temporary reductions when property values go down.)

Prop. 60 lets homeowners 55 or older transfer their base-year value from an existing primary residence to a new primary residence, but there are restrictions.

The new home must be in the same county as the old one or, as Proposition 90 added, in one of eleven counties that accept transfers of base-year value from other counties. The eleven counties are: Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne and Ventura.

Also, the new home must be purchased or built within two years – before or after – the sale of the original property.

If the new house is purchased before the old house is sold, the market value of the new house on its purchase date cannot exceed 100% of the old home’s market value on the date it is sold.

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