It has now become clear that sales of high-priced properties throughout Santa Clara County have slowed dramatically. This is what I basically call a move-up buyer type of purchase. Homes in the $1.5M price range are usually a target for a buyer who may want to sell their current home and “move-up”. To do this, they would sell their current home where they may have lived for many years, have a good deal of equity built up, and roll that equity into a bigger home in a different area.
However, the current housing market has temporarily stunted that movement. The seller of the $900k home is having a hard time selling or they can’t get an assurance of financing for the $1.5M home they want to buy so there are not as many buyers of the $1.5M homes as there normally would be. It may take some time to normalize before that transition buyer comes back.
Each chart here shows the percent CHANGE over the prior year in both the Average Sales Price and the Median Sales Price for single homes only, not condos -- enjoy!
Chart Analysis:
Almaden Valley seems to be bouncing back. Since there were only 5 sales in January, Almaden would surely bounce back as sales picked up. Although there are still a few foreclosures on the market, I think Almaden remains somewhat steady as far as average price year-over-year.
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Blossom Valley is continuing to look for a solid bottom. It is still a VERY competitive because there are foreclosures everywhere but sales are strong. Many homes around the $400k point have multiple offers and the best values are going fast. With sales off 30%-40% from one year ago levels we continue to find great values here for our first time buyers.
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Willow Glen is showing a slight recovery after the rough numbers in January. Clearly the foreclosures in the northern side near 280 and 87 are pulling down the average sales price for WG.
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Downtown San Jose continues to be dominated by distressed sales and prices are still struggling to stabilize. I will continue to recommend buyers to look for great deals on downtown, the Burbank area, and the Rosegarden where first time buyers or investors will find the 50% discounts very hard to believe.
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Cambrian has a chart that suggests it is beginning to stabilize. I still believe that most of Cambrian is ON SALE right now and there are some great opportunities out there in the very nice Cambrian school system.
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Campbell is behaving like nearby Cambrian. Many of the short sales are now turning into bank-owned foreclosures. Campbell is a very desirable location so well priced properties are still moving quickly. Some listings have dipped into the $499k range and are being sold quickly.
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Los Gatos cannot avoid the pricing slowdown for much longer. We should see the same price correction in Los Gatos as we have in Palo Alto and will see in Saratoga.
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Saratoga has just begun to start their price correction. Saratoga has 154 Active listings right now and only 14 Pending so this gives an 8% Pending:Active ratio. I still believe we have not yet seen seller capitulation in Saratoga, yet. Once Sellers get frustrated with their increasing Days On Market count and still want to get moved, we will begin to see prices adjustment down in Saratoga.
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Santa Clara seems to be stabilizing nicely with a 20-25% discount off last year’s prices. Foreclosures are being bought very quickly as they are priced aggressively. If you are looking to get into Santa Clara there may not be a better time as prices are very attractive.
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Sunnyvale looked like it was bouncing back, but now seems to be slowing down again. At least it is stabilizing at about 30% off last year’s prices. The Lakewood Village areas North of 101 have dozens of foreclosures and short sales that are selling in the $300s and low $400s. As more of those sales close, the average and median prices for Sunnyvale will be pulled down as you see in the chart.
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Cupertino is showing the same weakness as Sunnyvale. As mentioned last month, we have seen our first Cupertino foreclosure and there may be more to come in the months ahead. As in many markets of the Bay Area, Cupertino is not immune to the price pressures so if you are looking to move into Cupertino, there may not be a better time.
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Los Altos prices continue to slide as there were only 6 sales for February. We currently have 8.5 months of inventory at the current sales pace, which reinforces my thoughts from last month where I believe in the coming months we may see some actions needed by Los Altos sellers who are forced to reduce their listing prices if they want to get moved.
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Mountain View is amazingly stable. Currently 86 Active and 26 Pending giving us a 23% Pending : Active ratio, which as you can see is a much more stable price chart than either Saratoga or Los Altos.
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Palo Alto prices are surely trending down, but not quite as sharply as a couple months ago. We are finally seeing many properties under $1M for the first time in a long while. As these homes turn into recorded sales, the downward trend of the chart will continue. However, I still feel that the “on sale” season for Palo Alto may be just starting so if you are thinking to get into Palo Alto, 2009 may be the best time you have to negotiate your way into a great home.
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We are Realtors. We are in the market every day representing Buyers and Sellers throughout the areas above. Everyone has a reason why they are making the move (buying or selling) at this very moment.
We bring you this information to help you make an intelligent decision about your next move. Timing the market is impossible and unwise. Your motivation for buying or selling should outweigh your concerns of market timing. The market is always here, people are buying and selling every day, people are getting financing every day -- the real question is ‘when are you ready to make a move?’
-mark
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