There's been much speculation that the housing market, which gained momentum in the last few months due to the federal home buyer tax credit, is headed for a double dip, despite record low interest rates. This may be true for some parts of the nation, but local figures paint a rosier picture.
"We've always stressed to buyers to look at local market conditions. Silicon Valley, as it often has, bucks the national trend," said Jeff Bell, president of the Silicon Valley Association of REALTORS®.
Information from the REALTOR® association's multiple listing service, MLSListings Inc., shows a total of 1,096 closed sales of single family homes in Santa Clara County in June, up from 593 at the beginning of the year, though down slightly from the same time a year ago, when there were 1,189 closed sales. Average days on market have steadily dropped from 89 a year ago, to just 54 days in June of this year.
June home sales were higher than the same time the previous year in the Silicon Valley neighborhoods of Cupertino, Los Gatos, Mountain View, Saratoga and Sunnyvale. The median sales price of a single-family home in Los Altos was $1,495,000 in June 2010, up from $1,483,000 in June 2009. The year-over-year median also rose in the cities of Los Gatos, $1,250,000, up from $1,080,000; Mountain View, $940,000, up from $848,000; Palo Alto, $1,600,000, up from $1,399,000; Saratoga, $1,413,500, up from $1,390,000; and Sunnyvale, $843,000, up from $755,000.
With the expiration of the federal tax credit for home buyers, Bell expects sales to level off, but not to fall as they did during the recent downturn. "The likelihood of home prices coming down further is very remote. I don't see a free fall of prices like we saw in some markets in 2008 and 2009 happening again, especially not in Silicon Valley," Bell said.
Bell said the Silicon Valley region has the fundamentals of location, employment and schools. "These fundamentals never go out of style. Our schools and higher education institutions are excellent. We have a superb commute location, a very educated workforce, and a reasonable mix of shopping and services within a few blocks in every direction," Bell continued.
Bell, who is a REALTOR® with Coldwell Banker in Cupertino, said both buyers and sellers have opportunities in this market, but they need to be aware of local market conditions.
"For buyers, times couldn't be better; who knows if and when an opportunity like this will happen again? We have record affordability levels, record low interest rates and a decent selection of homes to choose from," Bell said. "If you are a serious buyer, with a solid credit history and seeking a home for the long-term, you couldn't pick a better time to buy a home, especially in Silicon Valley."
Times are better now for sellers. "Last year, if you didn't need to sell, most REALTORS® would advise you not to. This year, the tone is different," Bell noted. "If you are ready to move on to the next chapter in life, then do it. There is great value moving at your own pace, rather than forcing yourself into what you think might be the 'perfect strategy.' If you wait and try to time the market, chances are the price of the home you plan to move to has gone up, as well."
For both buyers and sellers, Bell recommends consulting the experts. "It's still a complicated market, especially if you are dealing with short sales and foreclosures. Work with an experienced REALTOR®, who is familiar with your neighborhood and can provide you with accurate information about local market conditions," Bell said. "A REALTOR® can also help you find a good, reputable lender. All too often we see buyers who find their own lenders run into roadblocks during the transaction. In the end, they are saddled with a higher interest rate, fees, or lose the deal."
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.