Market Trends Report

The Silicon Valley Real Estate Market Trend Report: October 2020

In this issue

Santa Clara County (SCC): Home Sales Jump

Sales of single-family, re-sale homes surged 33.2% year-over-year. Home sales were up 11.4% compared to August. There were 955 homes sold in Santa Clara County last month. Last September there were 717 homes sold. The average since 2000 is 987.

The median sales price for single-family, re-sale homes in September gained 14.7% compared to last year. That’s the eleventh month in a row the median sales price has been higher than the year before.

The average sales price was up 15.4% year-over-year, setting a new all-time high. Higher priced homes are selling at a faster rate than lower priced homes.

The sales price to list price ratio went from 102.4% to 102.7%.

Pending sales were up 63.8% year-over-year.

Year-to-date, home sales are down 9.9%.

Inventory of single-family, re-sale homes was down 39.4% compared to last year. That is the thirteenth month in a row inventory has been lower than the year before. As of October 5th, there were 877 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 five days to 27 days compared to August. The average since 2003 is 89.

It took only twenty-two 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 4.7% from last September. The average sales price gained 0.2% year-over-year.

Condo sales jumped 33.5% year-over-year. There were 375 condos sold in September.

Year-to-date, condo sales are down 9.9%.

The sales price to list price ratio dropped from 100.6% to 100.5%.

Condo inventory dropped 19.% from last September.

As of October 5th, there were 601 condos for sale in Santa Clara County. The average since January 2000 is 757.

Days of inventory fell to forty-six-two from sixty-two.

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

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

September 2020 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 https://avi.rereport.com/market_reports

red upward-pointing arrow on red dot

 

Want straight answers to your real estate questions?
Call 650-305-1111 or send me a note to schedule a complementary & confidential one-on-one meeting.

VISIT https://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.

Rearview Mirror (SCC & SMC)

October 2, 2020 — By its nature, economic data can only tell us what has already happened and can even suggest where we might be at the moment, but it cannot tell us where we’re going. Even significant previous events that routinely occur — recessions, for example — can be triggered by unique events, and so the response in each case (and any outcomes) will of course be different. Although there are some common reactions, such as the Federal Reserve lowering interest rates (or even buying bonds) it’s by no means clear that whatever bromide is used will have the intended effect.

One report that looks backwards but may actually suggest the future is the National Association of Realtors Pending Home Sales Index. A tally taken when sales contracts are signed, the PHSI rose to its highest level ever (19-year series) in August, climbing 8.8% over July’s value. Actual sales of existing homes are totaled up when the deed changes hands, which can take up to 60 days or so, so this would suggest that existing home sales reports for September and October will show improvement over the current (August) figure of 6 million annual sales, which was a 14-year high. How much above the current level is hard to reckon, since not all contracts make it through the process, and ever-thinning inventories of homes available to buy at increasingly higher prices seems likely to start to temper sales as we move deeper into the fourth quarter.

Construction spending kicked higher in August, driven there by a continuing surge in spending for home construction. The report showed an overall 1.4% increase in outlays for projects of all kinds, but those for housing spiked 3.7% higher (and that on the heels of twin 2.6% gains in June and July). Homebuilding has been on a tear, but that’s not the case for non-residential projects, which sported a decline of 0.3% during the month and has seen an increase in just two of the last eight months. Public-works spending edged just 0.1% higher for the month and has been soft for the last three, but since this is an election year we’ll see a slight boost when the September and October reports come out.

With Fed policy on hold, fiscal policy at bay for the moment (and perhaps longer, given the short time until the elections) and an economy that is running about as fast at it can given the situation, mortgage rates really don’t have reason to move much in either direction at the present time. With that as a backdrop, applications for mortgages are essentially backing and filling, and have largely been doing so for weeks or even months. In the week ending September 25, it was backing again, with the Mortgage Bankers Association reporting a 4.8% decline in new applications for mortgage credit. Requests for purchase-money mortgages eased 1.8%, but those for refinancing dropped by 6.5%, erasing a bit of the previous week’s jump.

As mortgage rates are essentially flat, there’s not much impetus for homeowners to rush into a refinance, and home purchases depend on having something to buy as well as favorable rates, which should remain, so there’s no pressure there, either. That will again be the case next week, where we think it’ll be more of the same, with the average offered rate for a conforming 30-year fixed rate mortgage wobbling a couple of basis points at best when Freddie Mac reports next Thursday morning — most likely upward.

Call or email me if you have any questions.

For further details and a city-by-city breakdown statistics, go to https://avi.rereport.com/market_reports.

red upward-pointing arrow on red dot

Do you want to be notified of investment opportunities across the country?
Send me a note with subject “Real Estate Investment Alerts .”

For a focused review of current and historical market trends go to https://avi.rereport.com/market_reports and click “change’’ see below

Real estate related Articles

Washington Post
October 2, 2020
Beautiful, perk-filled and mostly empty: What the future holds for tech’s billion-dollar headquarters 
By Fannie Mae
WSJ
September 23, 2020

What CEOs Really Think About Remote Work

By Chip Cutter

RISMedia
August 28, 2020
Fannie Mae Announces Suspension of Foreclosures and Evictions on Single-Family Mortgages Through Year-End
By Fannie Mae
ATTOM
August 27, 2020
More Homes in U.S. Fall Into Vacant Zombie Foreclosure Realm in Third Quarter of 2020 
By ATTOM stuff


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 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 https://www.smcare.org/default.asp
For Santa Clara County Tax Assessor visit https://www.sccassessor.org/index.php

red upward-pointing arrow on red dot

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 4.8% ANNUAL HOME PRICE GAIN IN JULY

NEW YORK, SEPTEMBER 29, 2020 – 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 July 2020 show that home prices continue to increase at a modest rate across the U.S. More than 27 years of history are available for these 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.

red upward-pointing arrow on red dot

San Mateo County (SMC): Home Sales Surge, Prices Rise

Sales of single-family, re-sale homes in San Mateo County jumped 38.1% year-over-year in September. There were 417 homes sold in San Mateo County last month. The average since 2000 is 398.

Year-to-date, home sales are down 9.6%.

Although backing off the nigh set in August, the median sales price for single-family, re-sale homes was up, year-over-year, by 17.4%.

The average price also backed off the high set in August. It was up 25.3% year-over-year.

After being higher than the year before two months in a row, inventory of single-family, re-sale homes was off 11.3% compared to last year. As of October 5th, there were 560 homes for sale in San Mateo County. The average since January 2000 is 1,287.

The sales price to list price ratio was flat at 102.4%.

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

It took twenty-five 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 1.4% year-over-year. It was down 1.5% from August. The average sales price fell 4.4% from August. Year-over-year, the average sales price gained 0.2%.

Condo sales jumped 66.2% year-over-year. Condo sales were up 18.5% from August.

Inventory rose 46.3% year-over-year. It was up 13.6% compared to August.

As of October 5th, there were 275 condos for sale in San Mateo County. The average since January 2003 is 350.

Days of inventory fell to sixty-two from sixty-seven.

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

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

 

September  2020 Sales Statistics

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

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

red upward-pointing arrow on red dot

Call or email me if you have any questions.

For further details and a city-by-city breakdown statistics, go to

https://avi.rereport.com/market_reports.

red upward-pointing arrow on red dot

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.

Silicon Valley Real Estate Market Trend Report

Sign up to have this report sent directly to your inbox every month and stay informed!