Data
Inventory
- is now finally decreasing, but at a slower rate
than normal. Normally inventory starts to drop in mid-July. The
level of inventory remains unusually high. This gives buyers more
choices and forces sellers to be more competitive. Median Days On
the Market -
continues to increase. This indicates that sellers will continue to experience
longer marketing times. Median
List Price
– there was a $10,000 drop this past month. Pricing tends to be a
lagging indicator as it takes time for people to adjust. Number
of initiated sales - indicates there is continued weakness with fewer than
normal buyers willing to make the investment in real estate. Even though
the number of initiated sales has improved from their record low levels
in August and September, they remain below normal. Sold
Price
- tends to lag behind market changes and reflects market conditions 25
to 95 days ago. Sold price has dropped to $535,000. That is below
August’s level of $540,000. So as expected, September’s median Sold
price appears to be just a monthly fluctuation in the data. Average
Sold Price to List Price ratio - documents that sellers are getting a lower percentage
of their asking price. This has dropped to 98.0% and continues to
decrease. We consider 98.5% normal. Remember, this reflects market
conditions 25 to 95 days ago because of the length of escrow and how
this data is collected. This is one of the few times where a mean
(average) is more useful than the median. The median would almost always
be100%. Percent
of completed sales with a Sold Price greater than the
List Price
- continues to decrease. This indicates that there are fewer multiple
offers occurring. Number
of Completed Sales
– there has been some additional improvement but completed sales
remain below normal. It
appears that the Santa Clara County real estate market continues to
cool This can be seen in higher inventory levels, fewer than normal
initiated sales, and longer marketing time. All three of these factors
indicate a market that is slowing. These trends are typical at this time
of the year. But the rate of change this year has been more
significant than any of the last three years This can be seen as Santa
Clara County has gone from record high volume in November through
February, to record lows in August and September. Because
of 9/11, expect prices for 2002 to continue to exceed the corresponding
month in 2001. The year-to-year improvement in price indicates that real
estate remains a good long-term investment. However, as the current
downward pressure on the market continues, there will likely be better
buying opportunities in the near future. Delaying a flexible purchase
will permit you to take advantage of the current slowing trend and
therefore will likely improve the investment aspect of the purchase. We
continue to be amazed how positive media coverage remains. The
media typically uses data from public records. Our data is
based on MLS data. We believe this data is more reflective of
true market conditions. Most of the media's data is for the
combined 9-County Bay Area. Santa Clara County is being the
hardest hit. Santa Clara typically leads local trends. San
Mateo County, Santa Cruz County & Monterey County Despite
some slowing and a significant drop in price San Mateo County (SMC) other
market indicators are still doing better than Santa Clara County. San
Mateo County is even positively influencing the area in Santa Clara
County near San Mateo County that is doing better than the rest of Santa
Clara County. This is interesting because in general the high-end of the
market is getting particularly hard hit. Santa
Cruz County's appreciation has outperformed the other Counties over
the last couple of years. Creekside Realty believes that this might be
caused by an increased demand for some of Santa Cruz County's
higher priced homes as a nearby escape from the pressures of Silicon
Valley opposed to general appreciation. Although now dropping Santa Cruz
County Sold price continues to be more stable. Monterey
County continues to show some positive signs when compared to the other
3 Counties. Sales are flat and inventory is flat. Monterey is
experiencing near normal sales volume opposed to the record low volume
of the Counties further north. Footnote In
an on-going effort to make the Bay Area Real Estate Market Newsletter
more readable we have changed a couple of the data labels. The data
itself remains unchanged.
a) The terms 'closed' or 'closings' are replaced with 'completed sales'.
b) The term 'sales' will be replaced with 'initiated sales.'
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