Video Blog: Silicon Valley Real Estate Market Update
It's been a while since we've done a video blog, but please be on the lookout for more soon, with some great information for you.
In this first video of the new series, I'd like to address the most common question I am asked - "How is the market. What's going on out there?"
Clearly there has been a shift in the market.
We've seen four of the greatest ever years in real estate. In my 22 years in the industry, I've never seen four consecutive years with as high an amount of price appreciation and low inventory of homes for sale.
Now we're in the fifth year of this upswing and things are a bit different - not that bad, just starting to shift.
You don't need me to tell you what we have been reading about in the news lately - stock market volatility, the fallout from the UK's Brexit decision, plus the uncertainty of an impending election. Acts of terrorism have also fueled an atmosphere of uncertainty in the market.
All these factors breed fear and we have started to see a little more caution being exercised.
Cycles in real estate tend to last about three or four years and we are now into the fifth year of the current cycle.
There is a little more concern out there and I'd like to talk about how I've seen it affecting our market.
I've noticed that in the upper 20%-30% of the market, in terms of price point, we've seen something of a slow down and a situation where there are more sellers than buyers.
If we look at the bottom three quarters of the market, it's still a very healthy sellers' market, with low inventory and good numbers of buyers.
Year over year, if we look at price statistics, they have stayed almost exactly the same. That can be a little misleading as an overall market picture, however, as we've seen prices fall slightly in the upper sector and rise a bit in the bottom three quarters, so if you take an average these trends cancel each other out and, statistically, at least, we appear to have stayed still.
If you look at the number of sales, they are actually up over last year. That sounds incredible, but we've had a huge surplus of buyers and we're now up about 30% in terms of the number of homes for sale, year-on-year, and buyers are more likely to purchase if there's more choice.
So what does all this really mean?
It's still a good and healthy sellers' market overall, but not an insane one, where we were seeing 20+ offers for a house last year and before. We're still seeing two, three or four offers for a good listing and plenty of demand out there.
If you're a buyer, it's probably the best opportunity in the past five years to buy a house. You're not having to compete against so many people, which got so difficult and frustrating for many.
The market is doing great and is perfectly fine, but I'm expecting to see volatility as we go through this year. People are skittish and we are going to have ebbs and flows with the election, stock market and global economy etc.
There will be some choppy waters ahead, at times, but here in Silicon Valley we've got a thriving economy, with lots of job creation and people still moving into the area. We should be just fine.
As always, feel free to contact us if you need anything at all to do with real estate. If you're looking to refinance your home to take advantage of low mortgage rates, or someone to work on your house, or if you need to get an inspection or appraisal done, or maybe thinking of renting your property, or if you want to buy or sell, of course, we have wonderful people who can help you.
We're always here to answer your questions and to help you. Call us anytime on 650-947-4787.
God bless and we hope to see you soon. Watch out for more videos on the way.