California pending home sales from both the previous month and year in November have cooled, according to the California Association of REALTORS® (C.A.R.). Meanwhile the share of equity sales or non-distressed sales continues to grow, a sign that the market is on the mend - 21 of the 38 reported California counties showed a month-to-month decrease in the share of distressed sales, with Santa Clara County having the lowest share at 4 percent.
C.A.R. reports the Pending Home Sales Index dropped 13.6 percent in November to 93.8, down from a revised 108.6 in October. The decline was the first double-digit drop in nearly a year. Pending sales were down 9.4 percent from the 103.5 index recorded in November 2012.
The slowdown in pending sales is attributed to seasonal factors, combined with higher home prices and a rise in interest rates. This development, however, does not disturb experts in the industry.
Real estate guru Carole Rodoni, who spoke to members of the Filipino American Real Estate Professionals Association at the Silicon Valley Association of REALTORS® this week, believes the market is just "taking a breath" and merely readjusting. Home prices have come back and in some places like Palo Alto, prices are up 40 percent. Even though interest rates have edged upward, the market for 2014 looks promising, especially for Silicon Valley, said Rodoni.
Rodoni is the president of Bamboo Consulting, Inc. and formerly president of Fox and Carskadon Real Estate, chief operating officer of Cornish and Carey Real Estate, and president of Alain Pinel Realtors. She described the San Francisco Bay Area as an international economic environment recognized around the world, with both capital and leverage. As a gateway to the Pacific Rim, with its finest institutions for learning, cultural and economic diversity and ideal geography, this market will continue to lead the way, said Rodoni.
"Silicon Valley is the heart of technology," added Rodoni. Many baby incubator companies keep sprouting and big companies like Apple, Google and Yahoo are acquiring more companies and workers every day.
"At the end of the day, it's a good thing," said Rodoni.
Rodoni predicts the Silicon Valley housing market will continue to be driven this year by great wealth, affluent buyers, international buyers and those with cash. The valley will continue to have multiple markets depending on price point, location and area. And while an interest rate of 2.5 percent a few months ago would be better than 4 percent or more this year, "it is in the natural flow of things," said Rodoni.
"At these still very low interest rates, you gain equity on your property and it doesn't have to appreciate," said Rodoni.
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.
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