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As conditions stabilize, 2007 looks like a balanced year for Bay Area housing, SILVAR CEO tells FAREPA agentsWednesday, January 24, 2007
Despite a drop in sales at the last quarter of 2006 in the state of California, the housing market, particularly in Santa Clara County and much of the Bay Area, "is doing just fine,” Silicon Valley Association of Realtors® (SILVAR) Executive Officer Janet Case told members of the Filipino American Real Estate Professionals Association (FAREPA) - Santa Clara Chapter. Case was the guest speaker at FAREPA’s first 2007 meeting, which was held on Jan. 9 at the Summit Pointe Country Club in Milpitas. Case said, "Housing, as we all know, is cyclical. After a four-year housing boom, we are now experiencing a return to normal conditions. It's been great everywhere, but it's really been extraordinary in California." According to the California Association of Realtors® (C.A.R.), Case said over the past 30 years, California homeowners who sell after five years have realized an 11 percent annualized return on the value of their homes, but for the last three years it has been between 17 and 23 percent. Based on C.A.R.’s figures and the experience of Silicon Valley Realtors, Case believes the housing market will continue to hold up in the Bay Area. While unit sales are about 22 percent lower than a year ago, average days on market for single family homes in Santa Clara County is at 44 days – just 10 days longer than during the housing boom, and right in line with historic averages. Significantly, the median price of homes in the Bay Area continues to rise, SILVAR’s CEO reported. The median home price in Santa Clara County increased to $775,000 in 2006, up 4.9 percent from 2005, when it was $739,000. In 2004, the median home price was $628,000. “No Santa Clara County city ended 2006 with a lower median price than in 2005,” Case pointed out. Based on C.A.R.’s economic figures, the prospects for the 2007 housing market in the Bay Area are mixed. There is employment growth in the area and inflation should remain low. These are factors that lead to increased consumer confidence. The Bay Area continues to have much potential for economic growth and demand for homes should remain high, especially in areas where companies are hiring, Case added. She noted, however, that affordability continues to be a concern because the median income does not allow just anyone to buy a house in the area. Only 24 percent of first-time homebuyers in Santa Clara County could afford a median-priced home during the second quarter of 2006. A “disconnect” between the housing market and the economy, and the uncertainty about mortgage rates are concerns for 2007. Case said current market conditions are good for both buyers and sellers. She told the real estate agents, "Let your clients know that it's a good time to buy a home because buyers have more time to choose.” She said it’s also a good time to sell a home “because prices are holding; you just have to plan on the home being on the market for a longer time.” When market conditions change, as they are now, Case explained it is likely that discretionary buyers will stay in their homes longer. And she also acknowledged, compared to a year ago, being a Realtor will be more challenging. “There is more price competition, and yes, it's a tougher time to be a Realtor,” said Case. The SILVAR CEO said now is a good time for agents to pursue educational classes, many of which are offered free by SILVAR. "Realtors should use this time to get additional training, to improve themselves professionally. Use this time to market yourselves better," she advised, “so you can be better positioned when conditions improve.” Case also shared demographic statistics that show the composition of the California’s population is shifting. Only 42 percent of the state's population is Caucasian; the rest of the population is composed of other races, with 25 percent being Hispanic and 27 percent Asian and Pacific Islanders. Over 40 percent of first-time homebuyers are Hispanic and Asian, and that singles and unmarried partners represent an increasingly large component of homebuyers. More homebuyers from these groups will be seeking the help of Realtors, she predicted.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley. The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics. Variations of this article have appeared in local area newspapers. For further information, please contact Rose Meily at SILVAR Public Affairs, e-mail , or phone (408) 200-0109. |
