Despite skepticism by some analysts about a buoyant housing market, local experts say they see the strong momentum continuing, at least in Silicon Valley.
At a Silicon Valley Association of REALTORS® district meeting in Los Gatos, longtime appraiser Roger Miller with Taketa Miller & Associates told members that he doesn't believe the volatility of the stock market will affect Silicon Valley's housing market. In fact, if you are considering selling your home, now is the time to do it, said Miller.
Miller said even if the Dow is down, the stock market has no impact on Silicon Valley's housing market. He believes the market will continue to be hot for the next six months, for sure. The only bad news is traffic will get worse in the region.
According to Miller, Facebook, Google, Intuit and other major companies in the area are expanding production and employment. These companies are not like the start-ups in 2000; they are big companies with infrastructure. These companies have made the valley their home and they want to stay here. Add the current state of China's economy to the picture and you have the "perfect storm" creating a boom in the market, said Miller.
Miller explained China's economic slowdown and uncertainty in what the communist government will do is prompting the Chinese to invest more of their money abroad. They are buying high-end residential and commercial real estate here. Miller said there are Chinese buyers purchasing 10 to 20 million dollar homes, occupying these homes just two weeks of the year and leaving them vacant the rest of the time.
Home prices are up, naturally, because land here is scarce and buyers are scrambling to find places to live. "Expect more (developments like) Santana Rows. We're saturated," said Miller.
A check with MLSlistings Inc. shows from the fourth quarter of 2000 to Q4 2015, the median home price for a single-family home in Los Gatos increased 145 percent, from $745,000 to $1,825,000; 34.3 percent in Monte Sereno, from $1,700,000 to $2,283,000; and 55.1 percent increase in Saratoga, from $1,299,500 to $2,015,000.
"If you are thinking of selling your home, put it on the market now; don't wait," added Miller.
Listing are slowly picking up. What's stopping most would-be sellers is the capital gains tax they would have to pay, so many are staying put in their homes, said Miller. At the beginning of the third week in January, Miller said Los Gatos had just 20 homes on the market; Saratoga, 40; Los Altos, six; Palo Alto, 12; Cupertino, four; Menlo Park, 12.
In Los Gatos, homes priced $1-2 million dollars have just a one-month supply; $2-3 million dollars, three weeks supply; $3-4 million dollars, 1.2 month supply. In Saratoga, homes selling $1-2 million dollars only have a two-month supply; $2-3 million dollars, 1.5-month supply; $3-4 million dollars, just three months.
The hottest market right now is Mountain View, where home prices are "ridiculous," said Miller. Other hot markets are Cupertino, Sunnyvale and Los Altos. He said land values in Los Altos are "insane," and in Palo Alto, a 1,400 sq. ft. fixer-upper is selling for $2 million dollars. There are more off-market listings in Atherton, Palo Alto and Menlo Park and they are selling for higher than market price.
Miller said he is seeing more all-cash transactions at the upper-end for homes priced $4-5 million dollars and more financing for homes priced at $2 million and less.
The veteran appraiser believes the hot market has a 6-month window, until the Presidential election, as history has shown election outcomes have the effect of changing the real estate market environment.
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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