Welcome to Alan Wang's Real Estate Blogger. Alan specializes in residential Real Estate fully representing Buyers and Sellers with their Real Estate Needs. Check back here for market outlooks, mortgage rates and new listings! I am also available online at http://www.alanwangrealty.com.
Monday, October 24, 2016
October 2016 Silicon Valley Real Estate Update
As we enter the winter season, the history of our local
market points to a slower period in the real estate market, especially as we
approach the holidays. This equates to a lower supply of homes on the market in
conjunction with a reduced amount of Buyers as well.
The economy continues to hold steady in anticipation of this
election year.The Federal Reserve is
holding interest rates steady in the short term, while signaling that a change
is looming.At this moment interest
rates have held steady with some volatility on a daily basis but steady.It remains to be seen how much the rate is
increased by and even then it will take some time for that to affect
mortgages.Banks could also choose to
throttle them up slowly as well.The jobs
reports continued to be mixed, though not drastic enough to point to the
economy shifting in either direction.
The Silicon Valley technology sector has remained stable
providing employment and ample opportunities.The Nutanix initial public offering (IPO) makes this the second local
technology IPO of 2016.There are rumors
of a Snapchat or Docusign IPO possibly next year.Companies such as Uber and Airbnb are the
most talked about in this discussion as possible 2017 candidates.The recent acquisition to monitor is the
Linkedin Microsoft acquisition, which is speculated to pay out employee stock
plans.Regardless IPO’s and acquisitions
will inject funds towards much needed downpayments for local Buyers who are
struggling to purchase a home in the high priced Bay Area.Regardless, timing wise this would mean that
Q3/Q4 of 2017 could be a busy one if these events do indeed unfold.
Local Housing Market
Summer inventory rose to its highest level since 2012.In September, Buyers seem to have come back
slightly in conjunction with a drop in inventory as well as canceled and
withdrawn listings.Many Summer Sellers
were holding onto 2015 prices and unwilling to accept the offers that the market
was giving them.
Homes with excellent schools in prime locations continue to
sell for a premium and in a short amount of time.Homes that have been fully renovated and
move-in ready will garner a higher amount of offers and a price premium as a true
differentiator in the marketplace.
Homes priced above $2M have seen longer days on the market and
also homes over $1.5M depending on the location. Single Family Homes less than $1.5M,
especially those with good elementary schools, continue to see multiple offers
and a good level of competition.This is
due to the fact that this is still an affordable bracket for many single or
dual income families in the area. Properties under the $1M price point continue
to have multiple offers especially Single Family Homes.Condominiums have seen resurgence as Renters
are looking for an alternative to high rental costs and looking to leverage the
tax benefits of home ownership.
Townhomes that have broken the $1M mark and especially those
that approach the $1.5M mark are seeing Buyers pause as they decide whether or
not to stretch and go for a Single Family Home instead.
Multi-residential homes continue to sell quickly due to low
supply and high demand by investors in the market.Investors continue to be major players in the
If you are a Buyer it is a great time to look for a home
during this season.Though inventory is
lower, Buyers tend to start shifting their focus towards the travels and the
holidays, which often equates to less competition for you as a Buyer.If you are a Seller, depending on your
location, the lower inventory could make it so that you are the only house on
the market for that given week and garner multiple offers.The downside is also that the number of
Buyers may not be as high as in the Spring season which means that you may have
to temper expectations on price.Reach
out to us so that we can advise appropriately on your specific home.We wish you and your families the best for
the rest of the year and thank you for all of your support and referrals!