Another month has passed and the trends are continuing. At my most recent office meeting we discussed tactics we can use to help our clients get their offers accepted in multiple offer situations because, believe it or not, that is the kind of market we are in. The property I put on the market in mid May, www.6430bancroft.com SOLD WITH 22 OFFERS IN 6 DAYS OVER $150,000 ABOVE ASKING!! I want to talk to the person who thinks this real estate market is “dead” and ask them where exactly they think it’s dead and where they are getting their information.
In the month of May Santa Clara County saw 1,091 homes sell. In May of 2008 we had a similar number of properties sell, but the difference lied in the total inventory level. There were 7,384 homes to purchase in the county last year compared with only 4,719 available this May. Our supply of homes has dropped by about 37% over the past 12 months! Basic supply and demand principles will say that prices need to rise, and they have. Over the past 2 months the median home price has gone up 12%. As a word of caution, in the past 2 weeks mortgage interest rates have gone up over a full percent. This will reduce average buying power by about $30,000. Waiting to purchase a home might backfire if interest rates continue to rise as you will not be able to afford the home even if prices drop.
Previous Prediction: Inventory is going to continue to fall, as long as interest rates stay low enough. Well priced properties in any market will see activity.
Recap: This month the median price for homes below $1M in the county have risen by nearly 9%. Time on the market has stayed the same. Below is the updated chart of sales in all cities East of Highway 880. Now we have seen 10 consecutive months of demand exceeding supply.
For Comparison: Here is the exact same chart for cities West of Highway 880, and for the first time in 29 months demand has exceeded supply!
Current Prediction: Expect prices to begin to rise! Well priced properties will sell quickly, and with multiple offers. Interest rates will play a role in buying power and prices, although not as much as it has in the past.
What’s driving this market:
· Interest rates are still historically very low!!!
· Buyers are getting concerned that the competition is going to be too high now that signs of economic recovery are in the midst
· More banks are using “short sale negotiators” to help get those short sales sold
"Do not anticipate trouble, or worry about what may never happen. Keep in the sunlight."
* Benjamin Franklin (1706 - 1790)
Enjoy the rest of your week and if you know of a friend, co-worker or family member who really wants to buy a piece of property and needs some sound advice let me know. You can count on me to provide it.