Silicon Valley Real Estate Blog – 1SiliconValley.com

Available supply in the Los Altos market hasn’t been as low since 2000, when the median number for single-family homes jumped an astronomical 48.9% year-over-year.  That year, the number of closed transactions to new listings was almost 2-to-1 (48 closed to 25 new).  The headline number this year is that closed sales are the lowest in a decade, but so was the available inventory.  Relative demand for what’s available has been strong enough to draw notable increases in two key statistics.

Only one condo in Los Altos was sold this August and only a handful more in each of the previous years, so their trends and statistics may have a high variance.  In single-family homes, though, it wasn’t just the fact that the percent of list received jumped from just under full value to 104.31%.  The median listing value also increased 4% year-over-year, meaning homes weren’t just selling for more, they were starting higher too.  The median transaction increased year-over-year as well, from $1,650,000 to $1,782,000 (8%).

For July and August numbers in particular, schools play a large role in housing demand and Los Altos schools are some of the best in Silicon Valley.  I’ve worked with people who’ve made the argument that, assuming that schools are the critical factor in their home-buying decision, paying a premium on a home is preferable to sending their kids to lesser schools, or private schools.  To them, private schools may not be as good socially: the kids who they go to school with may not always live nearby or have as varied backgrounds.  Premiums aren’t necessarily the most financially-conservative route, but choices involving children don’t always need to be.

[ Median Home 2007, 2006 | Market Snapshot | How Much Home Can I Get? ]

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Sep.20.2007 [ Filed under: Los Altos, Market Updates ] Comment Here »

It was a case of home owners sitting out the market.  New listings of single-family homes in Sunnyvale were at a 10-year low in August, dropping from 107 in August 2006, to 79 this year.  In fact, total inventory levels also dropped slightly, from 130 single-family homes to 127 over the same period.

Sunnyvale’s average number of new listings during the month over the last ten years is 105 and it’s an illustration of why real estate is local.  National news headlines from around the country correctly talk about aggregate numbers that are lower because of deflating markets — and many Silicon Valley home owners here who might have considered listing their homes, but could afford to wait, sat out.

But ultimately, real estate is about location, supply, and demand.  And while supplies were down, demand was actually both "normal" and "up".  The ratio of closed transactions to new listings in August 2007 was 73%.  The 10-year average is 74% and it was 58% last year.  How did that increase manifest itself?  Besides a fourth consecutive year of over-asking closing prices in single-family homes, have a look at the difference in the cost of Median Homes year-over-year.

[ Median Home 2007, 2006 | Market Snapshot | How Much Home Can I Get? ]

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Sep.07.2007 [ Filed under: Market Updates, Sunnyvale ] Comment Here »

Higher interest rates for jumbo mortgages is a story for another day, but it does color how home owners should read what I’m about to write.  In July, Mountain View experienced a 14% jump in the median for single-family homes from 2006 to 2007.  There was also the fact that the percent of list received went from almost full value (99.28%) to 104.4%.

Like many other places in Silicon Valley, like Sunnyvale and Cupertino with their Eichlers and San Mateo with its older homes near downtown, among others, Mountain View has its share of older homes.  Many of these homes come on larger lots that give ambitious owners room for expansion.  One of this month’s Median Homes illustrates that potential.

Mountain View is a unique environment because of the money from one local company in particular and it was a competitive summer season — as you’ll see, though, not every property experienced the same level of interest.

[ Median Home 2007, 2006 | Market Snapshot | How Much Home Can I Get? ]

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Aug.29.2007 [ Filed under: Market Updates, Mountain View ] 2 Comments »

My previous market updates have focused on analysis of year-over-year statistics, particularly with respect to medians around Silicon Valley cities.  The numbers are useful, but what I really want to provide my clients with is an intuition of how far that money goes and what the snapshot of today’s market looks like.

With that goal in mind, I’ve added some information to my market updates.  I think, as of today at least, that this site is the only place you’ll find this information.

The first addition I call "The Median Home", literally the home that is the statistical median for that period in that area.  (Sometimes there will be more than one.)  I’ll also add representative homes and multi-family interests that cover the spectrum of completed sales in that city.  Condominium complexes and many communities have their own micro-climates which I also cover individually in my Neighborhood Notes.

The second addition I call the "Active CDOM".  DOM is days-on-market and I have some opinions about its usefulness.  The CDOM, or continuious days-on-market, is an improvement which takes into account "rolling back the odometer".  The Active CDOM is a snapshot of how long the properties currently for sale have been on the market (as opposed to the ones that sold).  When compared to the CDOM, it gives a rough indication of the quality of the properties on the market.  

Aug.29.2007 [ Filed under: Market Updates ] 1 Comment »

It's not world famous for it's homes or real estate.  Folks outside Silicon Valley know it as the birthplace of the iPhone.  Apple, Symantec, and a very large portion of HP — to name a few — call it home.  To locals, Cupertino is synonymous with the school system.  The Cupertino Union School District has 24 elementary and middle schools, 19 of which are ranked by the California Department of Education as 10 out of 10 statewide. 

And that doesn't account for the elite Monta Vista High School, as well as Lynbrook High School or Homestead High School (as part of the Fremont Union High School District shared with Sunnyvale and other cities) which all rate 10 out of 10 statewide as well.

The real estate in the Cupertino part of Silicon Valley commands a premium over other cities in the area.  The darker lines on the chart show what the median price of condos and townhomes, and single-family homes in Cupertino.  The faded lines show what the median home prices are in Santa Clara County as a whole. 

The difference between the two types of lines is the premium you pay in housing prices to live in Cupertino.  How much is that premium and how has it changed over the last decade?

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Jul.26.2007 [ Filed under: Cupertino, Market Updates ] Comment Here »

It's all about proximity.  This month, I took a look at the semi-annual statistics aggregated for the first-half of the year so that my clients can get a good look at the overall trends, as opposed to the bumps in the road.

The story isn't about the median prices, which are charted further down in this article; what's interesting is the consolidation of pricing power around the center of Silicon Valley.  I alluded to this increase last month, but the half-year figures distinctly highlight this strength, with the epicenter squarely in Mountain View.

In the first-half of 2006, an average single-family home sale would command 101.98% of the list price — about 2% over the asking price — but in the first-half of 2007, that percentage jumped to 104.56%.  The increase in Mountain View's neighbors Palo Alto, Los Altos and Sunnyvale, is less drastic, but still pronounced, as illustrated below. 

In fact, inventory of single-family homes in Mountain View and Los Altos is at its lowest point in ten years, with Mountain View equaling the low it reached in 2005 (lower than any other point since 1998).

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Jul.23.2007 [ Filed under: Market Updates, Silicon Valley News ] 2 Comments »

It was as if they were made of gold.  You know a school district cares when they track every registration form that leaves their office for planning and budgeting purposes.  The result?  Saratoga Unified School District's API score of 952 out of 1000 is second in Silicon Valley only to Los Altos, which edges out its southeastern cousin at 960.

And it's that time of year, when parents who want or have to make a move are packing their kids into the trusty family automobile and hauling them to find Silicon Valley real estate in the right school districts.  Saratoga is seeing no shortage of activity with 40 closed sales in May 2007 compared with similar numbers of 37 and 35 in the two preceding years.

That doesn't seem like news until you combine the slight increase in sales with the dramatic decline in new listings year-over-year.  With only 48 new listings in May 2007 — a 10-year low where the average is 80.6 over that period — there's been a 16.6% increase in Saratoga median home prices from May 2006 to 2007.  But the market isn't completely stacked towards the seller in all market segments.

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Jun.29.2007 [ Filed under: Market Updates, Saratoga ] 2 Comments »

The stratification of the Silicon Valley residential real estate market continues.  On one end, the average townhome in the city of San Jose is just harder to sell than it was last year and, not surprisingly, it's much harder to sell than the year before.  In fact, San Jose accounts for half of all closed townhome and condo sales in Silicon Valley's Santa Clara County but for three-quarters of the drop in closed sales between May 2006 and 2007.

That decrease in San Jose, from 288 to 204 closed townhome and condominium sales year-over-year, represents the lion's share of the Santa Clara County drop from 481 to 363.  The reason for the drop in San Jose, however, is different than the reason closed sales are dropping or holding steady in other cities around Silicon Valley.

On the other end of the spectrum is what's happening with single-family homes.  Silicon Valley market cycles being what they are, the half of a percent dip ($4,000) in the median price of single-family homes in Santa Clara County from April to May this year was expected, particularly after the large run-up over the past few months.  On average, there's been a one percent dip in single-family home prices in Silicon Valley between April and May over the last ten years. 

But what isn't obvious in home prices is the drop in new single-family home listings from May 2006 to May 2007.  New listings are down across-the-board in every city in Santa Clara County except for Campbell.  Across the entire county, new listings dropped 13.6%, from 2466 to 2130.

The single-family home and multi-interest development markets are behaving very differently.  One stratum presents an opportunity for investors and first-time home buyers who are willing to compromise.  The other is a good indicator of the hot markets in Silicon Valley.

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Jun.09.2007 [ Filed under: Market Updates ] 1 Comment »

My clients often ask, "What time of year is the best time to buy a house?" because they know that I won’t reflexively say, "Now."  To me, buying real estate is a very personal, individual decision based solely and specifically on your own needs and wants. 

I believe it’s best to answer with more questions.  What they are depends on the people.  A question about their family.  About their timeframes.  About their job and how much they like it.  About their credit.  About their perfect world and what they envision in it.  This investment on my part in understanding what makes my clients tick is essential to the way I ensure clients are deliriously happy.  Anyone can look up properties. 

The question becomes, how do your needs and wants fit in with what the market has traditionally done since 1998?  And does that mean it’s the right time for you to buy a house?

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May.14.2007 [ Filed under: Market Updates ] Comment Here »

An increase in the median.  A 20% increase in housing inventory with a 17% drop in home sales would bring bad news for the Silicon Valley housing market.  Simple economics says that a big increase in supply combined with a big decrease in demand means dramatically lower prices — just ask anyone who tries to sell you a Mother's Day card on May 14th this year, right? 

Between April 2006 and April 2007 in Santa Clara County, there was an increase in inventory of single-family homes from 3231 to 3900 and a decrease in single-family home sales from 1066 to 886.  The numbers for townhomes and condos are even more dramatic with an increase in inventory from 1053 to 1436 (36%) and a decrease in home sales from 469 to 363 (27%).  What happened to median home prices in Santa Clara County?  Well…

Does that mean that a 12% year-over-year increase in median single-family home prices and a 10% increase in townhome and condominium prices in Santa Clara County are both undeserved?

In San Mateo County, the same thing happened with not nearly as much drama.  Inventories were up in both single-family homes (1180 to 1348, an increase of 14%) and common interest developments (440 to 471, an increase of 7%).  And home sales were down in both: 415 to 388 (6.5%) and 164 to 135 (17.7%), respectively.

The median price of condominiums and townhouses in San Mateo County was up 3.5%.  It looks flat on the graph, especially compared to the way Silicon Valley real estate prices have gone over the years, but folks in a lot of markets would be pretty happy with that sort of price increase.  The median for single-family homes in this part of Silicon Valley is up 8.4%.

So, what on earth is going on?  It's a different story between Santa Clara County where I'm tracking a small anomaly and San Mateo County where there are signs of change relative to the frenzy of the past few years.  What do the number of new listings have to do with it?

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May.07.2007 [ Filed under: Market Updates ] 4 Comments »