Choose the market experts to be your real estate agent.
Choose the market experts to be your real estate agent.
The lengthy written commentary,
attempting to describe the real estate market trends, has been replaced with web
links. These links are within the data tables and allow you to view the market
data graphically. This takes advantage of the concept ’a picture is worth a
thousand words.’ These graphs also facilitate comparing the trends between the
different Counties.
The written commentary will be limited to the executive summary and concentrate
on the Santa Clara County market. If there are noteworthy differences in either
San Mateo or Santa Cruz County an effort will be made to mention those aspects.
For example: during 2001, Santa Clara County market was hit harder than these
other counties.
Monthly market data tables for San Mateo, Santa Clara, Santa Cruz, Monterey and
San Benito Counties continue to be published and can be viewed by using the
links are below. Data is reported separately for both single-family homes and
townhouse/condos. Data for multi-unit (investment) properties is also included
for both San Mateo and Santa Clara Counties.
The record volume of initiated sales
experienced earlier this year (December 2001 through March 2002) has now clearly
passed. The market appears to have been cooling ever since approximately April
19th. This can be seen in higher inventory levels, lower number of
sales, and longer marketing time. All three of these factors indicate a market
that is slowing. Although these trends are typical at this time of the year, the
rate of change is more significant than any of the last three years. IF the
traditional annual cycle continues, there will be downward pressure on prices
for the next several months.
The median Sold Price for SCC has been increasing about $20,000 each month since
January. The median Sold Price for both Santa Clara & Santa Cruz County
reached an all time record high during May 2002. The trend of increasing median
Sold Price will likely end as early as next month when June’s data is
released. A decrease of about $10K in June’s median Sold Price for Santa Clara
would not be a surprise and Santa Cruz (which tends to lag SCC) likely will be
flat. Price shifts lag behind shifts in market conditions because it takes time
for escrows to close (30 to 60 days), for the data to get reported (25 days),
and to educate the public. So if the market did shift around April 19th
it should effect the prices being reported in July.
There are many potential explanations for the record demand experienced in
December through March. Here is an interesting potential explanation. Initially
after September 11th people went into shock. This caused buyers to
delay their purchase. Then people entered the recovery period. They wanted to
increase their feeling of security. There have been reports of decreased divorce
rate, increased marriage rate, increased in births and increased attendance in
church. Couldn’t an increased desire of home ownership be another result? This
would help explain why there were record sales levels with a weakened economy.
This explanation would also help explain the current rapid decrease in rate of
sales. If some buyers did accelerate their purchase, the 2002 slowdown could be
more significant than normal. Without an unforeseen event, the slowdown
shouldn’t be as significant as 2001. Remember 2001 price drops were far more
drastic than those experienced during the 1990 slowdown. Fortunately, the 2001
slowdown appears to be much shorter in duration than the 1990 slowdown, unless a
secondary dip is coming.