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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.
Although volatility in the stock market is making buyers nervous, real estate experts claim Silicon Valley’s housing market will stay strong.
Veteran appraiser Roger Miller with Taketa Miller & Associates told members of SILVAR’s Los Gatos/Saratoga District in January that he doesn’t believe fluctuations in the stock market will affect Silicon Valley’s housing market. Miller said the market will continue to be hot, at least for the next six months. The only bad news is traffic will get worse in the region.
According to Miller, Facebook, Google, Intuit and other major companies in the area are expanding production and employment. These companies are not like the start-ups in 2000; they are big companies with infrastructure. These companies have made the valley their home and they want to stay here. Add the current state of China’s economy to the picture and you have the “perfect storm” creating a boom in the market, said Miller.
Miller explained China’s economic slowdown and uncertainty in what the communist government will do is prompting the Chinese to invest more of their money abroad. They are buying high-end residential and commercial real estate here. According to Miller, the hottest market right now is Mountain View, where home prices are “ridiculous,” said Miller. Other hot markets are Cupertino, Sunnyvale and Los Altos. He described land values in Los Altos as “insane,” and in Palo Alto, a 1,400 sq. ft. fixer-upper is selling for $2 million dollars.
“If you are thinking of selling your home, put it on the market now; don’t wait,” said Miller.
At the February Palo Alto District tour meeting, Bay Area real estate analyst Carole Rodoni also said real estate in Silicon Valley will continue to be a hot item. Rodoni, who formerly served as president of Alain Pinel Realtors and now operates Bamboo Consulting, Inc. explained what happens around the world affects the perception of business and real estate. She expects the economy to grow just 2.3 to 2.4 percent and projects only a single-digit appreciation in homes this year
Despite “choppiness” in the economy, Rodoni said, “All will be well in Silicon Valley because this is Silicon Valley. It’s a place everyone aspires to be at, to work and live in, and be.”
Like Miller, Rodoni believes now is a good time to sell, but she noted the real estate market is undergoing a transition. She sees the high-end market slowing, but the lower end will be “on fire.”
Due to fluctuations in the stock market, buyers will be skittish this year. REALTORS® will have to “re-educate” their clients. “Buyers are watching, hesitating, and standing by. They are still interested, but they know the market is changing. They already get it; sellers don’t,” said Rodoni.
For sellers, the key is pricing. “Do not overprice. Sellers need to get real. Sellers cannot play games. The market rules are different now,” she warned.
Despite the high-end market slowing, Rodoni believes Silicon Valley, with its location and booming technology, will continue to grow. While not all start-ups will succeed, like Miller, Rodoni believes companies like Google, Hewlett Packard, Facebook will continue to do well.
“Real estate is still an asset people aspire to buy. It will be a choppy year, but we’re still the engine driving the world and everything will be okay,” Rodoni told SILVAR REALTORS®.
Silicon Valley Association of REALTORS® says ... 