The entry-level market (homes priced under $500k) is red-hot right now. I have stories where 3281 Tracy Dr in Santa Clara priced at $419k had 40 offers with the highest being all cash near $500k; or 3581 Forest Ave in Santa Clara priced at $400k had 20 offers; or 2853 Kring Ave in Willow Glen, a bank-owned home listed at $471k that will close near $600k -- a over 25% overbid! This price point of Bay Area housing is absolutely on fire right now with first time buyers and investors taking advantage of market conditions.
However, the higher priced markets are still stagnant. Sellers in Los Altos, Saratoga, and Los Gatos will start “getting it” soon and I believe we will begin to see significant price reductions.
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 stabilizing but this chart is deceiving. I know from the numbers that Almaden prices are down in comparison to last year. I think the trend will continue into the months to come.
Willow Glen is seeing a lot of sales activity around and under the $600k point and not much activity above the $1M mark. This is causing the numbers for the price trend to drop as you see. Average prices will probably stabilize around $650k for Willow Glen so it’s a great time to get into this nice area of San Jose!
Downtown San Jose is another area that has found a bottom. There are still some incredible values downtown, in the Burbank area, and in the Rosegarden where first time buyers or investors will find the 50% discounts off their 2005 high level prices -- very hard to believe!
Cambrian is beginning to stabilize and there are some great values in Cambrian houses right now. The average sale price is just under $550k and I suspect it could stay around the low $500k range, but that’s a nice price for the Cambrian school system!
Campbell is presenting a great buying opportunity right now. Average prices are still in the $650k range so anything that comes on the market around $550k is going quickly. Look for those deals to continue for a short time but if you want Campbell in the $500s you need to make a move this summer.
Los Gatos cannot avoid the pricing slowdown for much longer (which is what I said last month) -- and here is the proof. Even with 15 sales for March, we are seeing the same price correction in Los Gatos as we have in Palo Alto. Median sales price in Los Gatos under $1M?! Who would have believed that a year ago?
Saratoga prices are starting to crack under the pressure. Saratoga now has 173 Active listings right now and only 25 Pending. Frustrated sellers who still want to get moved may be adjusting their prices down and I believe more is in store for Saratoga like we are seeing in Los Gatos.
Santa Clara as we saw last month seems to be stabilizing nicely. There are multiple offers on most new listings around $400k and buyers are being aggressive to pick up some good deals! If you are looking to get into Santa Clara there may not be a better time so I would recommend acting soon.
Sunnyvale prices are still looking for a bottom but as I have said in previous posts, the Lakewood Village areas North of 101 are selling quickly in the $300s. As those are recorded this chart is being pulled down.
Cupertino is beginning to stabilize as aggressive buyers are recognizing the price discounts. I’m not expecting a wave of foreclosures in Cupertino, but if people who committed to big mortgages are being caught in the job-loss wave then we may look to see an increase in short-sales.
Los Altos prices are under huge pressure and will continue for a while as long as jumbo loans are hard to resell in the secondary market. Inventory is growing and 15% price reductions on active listings are becoming common.
Mountain View prices continue to amaze me! Prices are not dropping and the Pending vs Active ratio is still above 25% which means it is just a very stable market.
Palo Alto homes under $1.5M are flat and stabilizing but homes above $2M are surely dropping as this trend line shows. Any new listings coming on the market under $1M are being snapped up very quickly. 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.
As Realtors, we are in the market every day representing Buyers and Sellers throughout the are as 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 because you may ultimately not be able to meet goal. 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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