Silicon Valley real estate market trend report/September 2010 |
Bay Area Real Estate Recovering Faster Than Most
Important Changes to Mortgage Underwriting Could Affect Many Buyers
Monthly real estate report Archive
Prices Up Year-Over-Year
Prices for single-family, re-sale homes were up in August, year-over-year, for the eleventh month in a row. The median price rose 13.7%, while the average price was up 15.4%, reflecting a higher share of $1,000,000+ home sales.
Sales of single-family, re-sale homes continued to slide and were lower than the year before for the third straight month: -13.1%.
In a turn, pending sales were also lower than the year before for the first month since March 2008: -6.9%.
Inventory was higher than last year for the second month in a row: 18.4%.
The sales price to list price ratio for homes dropped below 100% for the first time since June 2009: 99.6%.
The median price for condos was up 5.3% year-over-year. This is the tenth month in a row the median price has been higher than the year before. After nine straight months of year-over-year gains, the average prices for condos dropped 1.7%.
Condo sales were up 0.4% compared to last August.
Pending sales were down from June, and were lower than the year before for the first time since March 2008: -11.2%.
Inventory for condos was higher than the year before for the third month in a row: 40.9%.
Remember, the real estate market is a matter of neighborhoods and houses. No two are the same. For complete information on a particular neighborhood or property, call me.
How to Read the Chart
The blue area is the number of days it would take to sell all the homes for sale at the current rate of sales.
The green line shows the number of homes in escrow. Normally, this line tracks closely with the red line, which shows actual sales.
As you can see, the two lines have diverged over the past year. This is due to many homes being put into escrow as short-sales, contingent upon the banks’ approval. This is being done even before the banks know about the short sale. Subsequently, many of these escrows do not close.
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Mortgage Rate Outlook
Sep. 3, 2010 -- The economic news has certainly been nothing to cheer about over the last month or two, but at least some important indicators don't suggest that any double-dip recession is imminent.
HSH's overall mortgage monitor -- our weekly Fixed-Rate Mortgage Indicator (FRMI) -- dipped back by another two basis points, closing our survey at an average 4.76%, a new low. The FRMI includes rates for conforming, jumbo, and most recently the GSE's "high-limit" conforming products and so covers much of the mortgage-borrowing public. For borrowers who don't need a long-term, fixed rate mortgages, a viable choice might be a Hybrid 5/1 ARM, which ended the week at an unchanged average rate of 3.73%.
The Federal Reserve released the minutes of its August 10 meeting, and most clearly identified perhaps the chief reason the economy cannot seem to get out of its own way, economic "stimulus" and low rates or not. Whether you're a consumer or run a business, it all comes down to confidence.
From the minutes: "A number of participants reported that business contacts again indicated that uncertainty about future taxes, regulations, and health-care costs made them reluctant to expand their workforces. Instead, businesses had continued to meet growth in demand for their products largely through productivity gains and by increasing existing employees' hours."
Consumers and businesses have been reluctant to spend or borrow money, and each are expressions of confidence about future prospects. By most accounts, the Fed has done a good job of getting low interest rates into the marketplace -- but if no one wants to (or is able to) borrow, the economic benefit is minimal.
Personal income growth has been meager, but households are using what little there is of it to buttress savings and pay off debt. Incomes rose by 0.2% in July, a little less than expected, with wages increasing 0.3%. For the first time in a couple of months, personal spending rose more than incomes, rising by 0.4%, so the nation's saving rate eased to 5.9% for the month.
If we haven't been before, we are truly at a crossroads for the recovery. Low rates exist, benefiting the limited number of those who want to (or can) borrow, but hurting those who save, and the stimulative effect of even lower rates is uncertain.
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Table DefinitionMedian Price: The price at which 50% of prices were higher and 50% were lower. Average Price: Add all prices and divide by the number of sales. SP/LP: Sales price to list price ratio or the price paid for the property divided by the asking price. DOI: Days of Inventory, or how many days it would take to sell all the property for sale at the current rate of sales. Pend: Property under contract to sell that hasn’t closed escrow. Inven: Number of properties actively for sale as of the last day of the month. |
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Bay Area Real Estate Recovering Faster Than Most
The California Association of REALTORS® reported last month that the median price of single-family, detached homes in The San Francisco Bay Area, which includes San Francisco, Oakland, Fremont, and San Mateo County, was up 52.2% in July from the trough in February 2009.
The same report shows the median price in Santa Clara County was up 41.6% from the trough.
C.A.R also reported the median price decrease from the peak. In the San Francisco Bay Area, the median price was off 28.9% from the peak month of May 2007.
For Santa Clara County, the median price was off 27.5% from the peak month of April 2007.
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Trough vs. Current Price — July 2010 |
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Region |
Trough Month |
Trough Price |
Jul-10 Median |
% Chg From Trough |
|
San FranciscoBay Area |
9-Feb |
$399,040 |
$607,510 |
52.20% |
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Monterey Region |
9-Feb |
$241,130 |
$344,740 |
43.00% |
|
Santa Clara |
9-Feb |
$445,000 |
$630,000 |
41.60% |
|
Palm Springs/Lower Desert |
9-Apr |
$150,140 |
$194,320 |
29.40% |
|
CALIFORNIA |
9-Feb |
$245,230 |
$314,850 |
28.40% |
|
Ventura |
9-Feb |
$359,630 |
$444,230 |
23.50% |
|
Riverside/San Bernardino |
9-Apr |
$156,840 |
$190,870 |
21.70% |
|
Orange County |
9-Jan |
$423,100 |
$514,180 |
21.50% |
|
High Desert |
9-May |
$106,210 |
$128,950 |
21.40% |
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San Diego |
9-Mar |
$326,830 |
$389,440 |
19.20% |
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Northern Wine Country |
9-Feb |
$310,950 |
$367,690 |
18.20% |
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Los Angeles |
9-Mar |
$295,100 |
$345,410 |
17.00% |
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San Luis Obispo |
9-Apr |
$338,160 |
$383,720 |
13.50% |
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Sacramento |
9-Apr |
$167,340 |
$186,180 |
11.30% |
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Northern California |
10-May |
$243,200 |
$247,520 |
1.80% |
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Important Changes to Mortgage Underwriting Could Affect Many Buyers
I want to share with you an article I recently received from the National Association of Realtors regarding the changes the real estate industry and especially the mortgage industry have been going through. For the full article…
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