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Silicon Valley home sales bounced back in June, as lockdown restrictions eased, bringing sellers and buyers back to the marketplace. The San Francisco Bay Area saw a moderate 3.6 percent increase in home prices and a 69.2 percent sales increase from May. Santa Clara County made a major comeback in sales volume, price, and new listings.
“The housing market is making a good recovery which will hopefully continue,” said Mary Kay Groth, president of the Silicon Valley Association of REALTORS®. “The pandemic hasn’t stopped buyers.”
Santa Clara County saw June packed with a higher sales volume and strong prices, according to data from MLSListings presented in the Aculist Monthly Market Minute report by Aculist senior product marketing manager Michelle Ronco. Ronco noted the change in sales volume illustrates the market’s recovery. Santa Clara County sales volume in May was barely half (49 percent) of the sales volume in May 2019, then rose steadily in April to 62 percent. By June, sales volume increased to about 98 percent of sales volume in June 2019.
Santa Clara County’s median home price reached $1,382,000 in June, up 1.2 percent from May’s median of $1,365,000, and up 2.4 percent from the June 2019 median of $1,350,000. Although inventory is down 33 percent year-over year, new listings have increased for two straight months, from 732 in April, to 1,045 in May, and 1,066 in June – a clear sign that sellers are returning to the market. The county’s sales-to-list price ratio in June was 101 percent, just one percent lower than a year ago.
Further highlighting the market’s rebound are places that experienced month-over-month increased median home prices. These include cities in the local REALTOR® association’s service area, like Saratoga, Los Gatos, Los Altos, Los Altos Hills, Cupertino, Santa Clara, Palo Alto, Sunnyvale, Mountain View. The cities of Los Altos Hills, Mountain View, Sunnyvale, Los Gatos, Cupertino, Saratoga, Santa Clara, San Jose also saw new listings increase from May to June.
Ronco added average days on market dropped in June – in some cases by nearly half of the previous month. In hot markets, like Cupertino, the average DOM fell from 22 days in May to 12 in June, Monte Sereno, from 75 days to 44; and Sunnyvale, 27 days to 18. This means buyers have less time to decided on a purchase due to heightened competition.
“The virtual tours and virtual open houses have appealed to buyers. Traditional open houses are still not allowed, but in-person showings by appointment and limited to just three persons at one time, including the agent, have helped clinch many deals,” said Groth. “At our association’s REALTOR® district virtual meetings, our members are reporting multiple offers are taking place on properties that are priced competitively.”
Although year-over-year home sales have fallen for the second consecutive month, appraiser Roger Miller with Taketa Miller & Associates recently told members of the Silicon Valley Association of REALTORS® that they shouldn’t be too concerned about recent changes in the housing market.
The housing market is “doing just fine overall,” said Miller.
In fact, Miller said this is the longest period of appreciation he has witnessed in his 40 years in business and he believes it will continue for a while.
Homes have appreciated an average of 20 percent in Silicon Valley. Miller indicated the year-over-year median home price is up 23 percent in Los Gatos and up 23 percent in Saratoga. In Mountain View, the median is up a whopping 25 percent, in Cupertino 19 percent, and in Sunnyvale and Los Altos 17 percent.
Miller said inventory has increased, but sales are down in some places and days on the market have lengthened from an average of seven to 10 days to one month in some areas. It’s not a bad thing, said Miller. It just means the market is settling down.
Watch the specific micro market you are in, said Miller. In places closer to Apple and Google, homes are still selling at a quick pace. In Cupertino, a 2,700 square foot home sold for $2.36 million in just nine days. In Sunnyvale, a $1.9 million home sold in nine days. In Mountain View, a 1,400 square foot home priced at $2.3 million sold in eight days.
The Silicon Valley appraiser said the market usually slows down from the second week of May because of graduations and summer vacation. With the school year starting earlier this year, he expects it to heat up again around the second week of August.
“Take a vacation and be ready to come back in mid-August,” Miller told the REALTORS®.
Miller said the local economy is especially good, with Google’s plans of expanding to San Jose. Unless the giant companies like Facebook, Apple, Google, LinkedIn and eBay are transported somewhere else, he believes the housing market will stay hot for some time.
“I don’t see the market coming down in a while. It’s a little down, but even as it settles down, it will settle down at a higher price,” said Miller.
Cupertino-Sunnyvale District Chair Jeff Bell being interviewed by Maureen Naylor, reporter for KTVU Channel 2 News, at a home for sale in Mountain View
Jeff Bell, board director and 2010 president of the Silicon Valley Association of REALTORS®, was featured in KTVU news on Tuesday, in a story about how the low inventory and rising home prices are impacting even high paid tech workers in the region.
As of January 2018, Bell indicated the median sales price of a single-family home in Santa Clara County was $1,170,000, up 26 percent from a year ago. In Mountain View, where he has a listing, the median is $2,400,000, up 51 percent from last year.
According to MLSListings Inc., homes in Santa Clara County are being scooped up at a rapid pace, staying on the market between six to eight days. One home located in the Mountain View Whisman School District was only on the market a mere two days. Currently there are only six listings in Mountain View.
Bell said in order to qualify for a home priced at $2.4 million, a buyer would have to have an annual income of $340,000, with no other consumer debt (credit cards, car loans, etc.). With a 20 percent down payment, a buyer’s monthly payment, including principal, interest, insurance and property taxes, would amount to a whopping $12,185.25.
Bell observed while challenging, the cost does not appear to have deterred tech workers. He noted in one day he had 80 groups of potential buyers walk through the Mountain View listing, majority of whom were high-tech workers, many who worked at nearby Google. He said most who were keenly interested in purchasing the home were dual income couples.
“They are the type of buyers who are in the best position to afford such a home in this current hot market,” said Bell.
The Housing Trust of Santa Clara County is asking SILVAR REALTORS® to inform their clients that money is available to help Santa Clara County residents purchase their first home.
“We have money and we want to help. There’s plenty of money for people to qualify,” Dan Lachman, director of lending for The Housing Trust of Santa Clara County, told a focus group composed of SILVAR REALTORS® meeting in Mountain View this week.
Lachman discussed The Housing Trust’s current homebuyer assistance programs and sought feedback from the REALTORS® on how the nonprofit lender can more effectively provide opportunities in Mountain View. The Housing Trust is planning to have a public outreach event for Mountain View residents in the fall. Mountain View City Council member Margaret Abe-Koga joined Lachman and the REALTORS® at the meeting, stating she wishes more people who work in Mountain View could avail of the home buyer programs, so they could live in Mountain View, as well.
The Housing Trust of Santa Clara County makes loans and grants to increase the supply of affordable housing, prevent homelessness and assist qualified individuals and families in buying their first home. Lachman specifically asked the REALTORS® to inform their clients of two programs that provide assistance to first-time home buyers – the Closing Cost Assistance Program (CCAP) and the Mortgage Assistance Program (MAP). In order to qualify for either of these programs, the household income for a four-member household cannot exceed $126,000, or the income for a single-member household cannot exceed $88,200.
The Closing Cost Assistance Program (CCAP) for first-time homebuyers provides 3 percent of the purchase price up to $15,000 towards the down payment, closing costs or other transaction expenses associated with a home purchase. No interest or principal payments are due during the term of the loan. This loan is due when the borrower sells the house or refinances the home, or in 30 years, with a 3 percent deferred interest rate.
The Mortgage Assistance Program (MAP) is an amortizing 30-year second mortgage available for moderate-income first-time home buyers. Second loans of 17 percent of the purchase price up to $85,000 are available under this program, with the interest rate at 1 percent above the interest rate of the first loan.
Lachman and his team have offered to speak to companies and business about the non-profit lender’s loan programs. See the next scheduled workshop here. For more information about The Housing Trust, its programs and program guidelines, visit www.housingtrustcc.org
The California State Senate will be holding an informational hearing regarding High Speed Rail on Tuesday, March 13, at 7 p.m., in the Mountain View Center for the Performing Arts, 500 Castro Street.
Senator Joe Simitian will be hosting the hearing and will be joined by Senator Mark DeSaulnier, chair of the Senate Transportation and Housing Committee and Senator Alan Lowenthal, chair of the Senate Select Committee on High-Speed Rail. This event is open to the public, and attendees will have the opportunity to speak during a public comment period following prepared testimony from state officials and others.
There’s an optimism in the air. It’s quite evident in attendance at the different SILVAR district meetings. It’s also evident in the attitudes and points of view of the various speakers at each of SILVAR’s districts.
Left to right: Chris Trapani (Sereno Group), John Thompson (Intero Real Estate), Bill Lewis (Alain Pinel Realtors) and Fred Hibbert (Coldwell Banker)
The first 2011 Los Altos/Mountain View District tour meeting took place last Friday with a good attendance and a broker/manager panel, which included Chris Trapani (Sereno Group), John Thompson (Intero Real Estate), Bill Lewis (Alain Pinel Realtors) and Fred Hibbert (Coldwell Banker). 2011 District Chair Denise Welsh, who served as moderator, asked the brokers to share their greatest challenges, advice to agents for positioning buyers (and sellers) in 2011, and valuable traits they look for in an agent.
For Fred Hibbert, the greatest challenge is managing expectations of buyers and sellers.
Bill Lewis said it’s staying on top of the market. “Success is preparation and opportunity. You need to know the market,” he stressed.
John Thompson said knowledge and skills in the industry are important. An agent needs to be objective and focus on what he/she should improve.
Chris Trapani said it’s important for him as a manager to see growth in his office. His goal is to have his agents succeed. He especially wants to coach agents who have not yet experienced levels of success and guide them to a place of stability.
What is the panel’s advice to agents for 2011? Hibbert advised agents to study the information, be knowledgeable about the market, and know the stats.
“Stats are important and talking points are important,” confirmed Lewis. Armed with this knowledge, Lewis said agents can discuss real estate and show their knowledge to everyone, even while waiting in line in the supermarket.
“Have patience,” Lewis added. “You have to understand your clients and help your clients understand the market and manage their expectations.”
Thompson said there’s no excuse for agents to be operating without stats. Agents have access to the data and need to be able to explain the short and long-term impact on value in the different neighborhoods.
As for valuable traits the managers look for in an agent, Trapani said he looks at the agent’s track record, and most of all, he looks for a “culture fit” in his company.
Thompson looks for intangibles, especially personality. “If a person knows what they want to get out of this business, I can help them with a business plan. They have to know what they want,” Thompson stressed.
Lewis looks for a high level of honesty, integrity and fair dealing in an agent. It’s his foundation to building a culture in the office. The agent would need to get along with others in the office.
Hibbert wants the agent to have a game plan and goals.
A red flag to these managers is when the agent immediately wants to know what the deal is, and does not express much interest in the company’s philosophy.
The brokers are very optimistic about 2011. Enjoy the ride, be prepared, focus on what you want, but you have to work. Get out there, get the inventory, get the listings, they said.
Silicon Valley Association of REALTORS® says ... 