The positive momentum in Silicon Valley's housing market was paused, especially in the last two weeks of March as the Bay Area counties issued their respective Shelter-in-Place orders. According to MLSListings, prior to the March 16 SIP orders, the first half of March was looking promising. In fact, San Mateo and Santa Clara counties ended March with higher median prices than a year ago despite the SIP.
Additionally, the median days on market, a key indicator of demand and the overall speed of the market, dropped by more than 20 percent in all five counties the MLS serves. Santa Clara County returned to single digit median DOM. Similarly, the price paid for homes showed an increased premium compared to a year ago in San Mateo and Santa Clara, where the average percentage of list price paid is 106 percent in these counties.
According to the MLS March 2020 data, in Santa Clara County, the median single-family home cost $1,400,000 and sold in eight days for 106 percent of the list price based on 628 sales in March 2020. Inventory was up 9 percent from February, but down by 35 percent from March 2019 with 848 homes available, compared to 1304 homes last year.
The number of new listings for Santa Clara County in March decreased by 4 percent over February, and was down by 19 percent from March of last year. Closed sales increased 28 percent from February, from 491 to 628 and were down 20 percent from March 2019.
"We remain cautiously optimistic of a rebound once the pandemic crisis dissipates because demand for homes in the region has always been strong. We may see the numbers get worse before they get better, but once the economy gets back on its feet, so will the housing market," said Mary Kay Groth, president of the Silicon Valley Association of Realtors. "A shared opinion in the industry is that real estate will help lead the way in our economic recovery."
The California Association of Realtors reports a similar trend statewide. C.A.R.'s March home sales total was down 11.5 percent from the 421,670 level in February and down 6.1 percent from a year ago. The month-to-month drop was the first double-digit loss in more than nine years and the largest since August 2007. The year-over-year decline was the first in nine months and the largest decrease since March 2019.
"The relatively moderate sales decrease that occurred in March is only a prelude to what we'll see in April and May," said 2020 C.A.R. president Jeanne Radsick. "Pending sales, which is a better reflection of the current market conditions and consumer concerns about the coronavirus, dropped nearly 25 percent and suggest the decline could extend beyond the next couple of months, depending on the duration of the pandemic and the lockdown."
The statewide median price rose from both the previous month and previous year. At $612,440 in March, the median price of a single-family home experienced an 8.3 percent year-over-year gain and increased 5.6 percent from February's $579,770. A year ago, the statewide median price was $565,740.
C.A.R. senior vice president and chief economist Leslie Appleton-Young indicated that most, if not all, of the closed sales were negotiated in mid- to late-February prior to the COVID-19 outbreak. Appleton-Young noted, "The fast deterioration of the economy, the steep decline of the financial market and record-setting job losses have not been factored into March's closed sales but will become obvious in the coming months."
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 email or call the SILVAR office at (408) 200-0100.