At several district meetings of the Silicon Valley Association of Realtors, area brokers assessed current market conditions and all say the market is changing. They have observed the high-end of the market slowing, but the lower-end is still very active, especially in the North and East Bay. Home prices and rents have peaked and they don't expect prices to rise by much more the rest of this year.
The market is slowing down, but it is not dropping, brokers emphasize. Silicon Valley's housing market is still experiencing run-up demand due to very low inventory. They expect properties to still appreciate, but not the 20 to 40 percent appreciation realized by many areas of the region in the past year.
"That kind of appreciation is just not sustainable," remarked David Barca, vice president with Pacific Union International. "I see a gradual appreciation, but not as crazy as it has been."
Silicon Valley brokers see the housing market ending on a positive note this year and they expect next year will also be a good market. They expect the housing market in 2017 to be stable with modest growth, and that's not a bad thing, they said.
As Carol Burnett, vice president and managing broker of Alain Pinel Realtors Saratoga, put it, "The market is always good in Silicon Valley."
That said, a market transition means agents need to educate their clients, said Burnett. Sellers must be ready to lower their expectations. They mustn't expect their house to sell for more or the same today as other homes that sold a few months ago.
Penelope Huang, a broker with Dreyfus Sotheby's International Realty, tells agents to watch the rental market because with multifamily construction on the rise, she expects rents to fall. Some buyers may decide to stay in the sidelines and opt to rent rather than buy.
Huang said agents need to impress on buyers not to buy for appreciation. "Buy because they want to live in the home, because it will contribute to their lifestyle, because they want to live here and raise a family. If so, then there's no need to get skittish about the future," said Huang.
On the agent side, brokers anticipate with fewer listings and buyer hesitance agents will need to go back to basics, like cultivate leads, work their database, know the data and inventory. Although activity from overseas buyers has slowed due to the uncertain global economy, don't discount them. Brokers believe overseas buyers will return to the market because they still see the U.S. as a secure place to invest in property. The Bay Area with all its amenities is a top location.
"Reaching out to the global market is not an option; it's a necessity. Sellers will want to maximize their exposure," said Alain Pinel, senior vice president and general manager of Intero Real Estate Services. "More than 50 percent of buyers come from another place, another land. Shop for buyers all over the map, not just local."
Coldwell Banker Residential Brokerage San Francisco Bay Area president Mike James adds, "This is Silicon Valley and clients expect agents to keep up with the latest technology. Sellers want the latest technology in marketing, so agents need to stay up with it."
The brokers say real estate websites like Zillow and Trulia will continue to be a presence, but they cannot replace the Realtor. Buyers are able to get general data from the internet, but many are not savvy about the real estate transaction process. Realtors can stay relevant by knowing the inventory, the nuances of the local market, and by educating buyers about the transaction process.
"The client wants the pro whom they know and can trust," said Chris Trapani, founder and CEO of Sereno Group.
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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