2011 Q3 Real Estate Update
Looking back at Q2 of this year, real estate activity was already equaling that of the entirety of 2010. What is even more amazing is that Q3 has kept me busy beyond what I had imagined and there is no end in site. The bottom line is that Buyers are buying and not enough Seller's are selling. Real Estate in the Bay Area has been on fire to date.
Micro Economy Santa Clara County
We are in the heart of technology and this sector is leading the US economy. Anything social was getting funded this year with most of them founded in the Silicon Valley. A foreign investor told me that it seemed that the United States showed activity in New York, Los Angeles and the Bay Area while the rest of the United States is stagnant or in decline. I would agree with this assessment. We live in a unique pocket with Buyers and Sellers taking advantage of the low interest rates across the country to fuel this micro economy that we all live in. We have always had low supply in the Bay Area and there are new migrants of Tech workers arriving here for work everyday with the dream of home ownership. With the upcoming Technology IPO's there will be more money flowing around the valley and real estate will be on the top of minds.
Analyzing Single Family Homes in Santa Clara County, since December of 2010 there has been a non-stop tight race between Pending and Active home sales. Recently Pending homes have been exceeding Active homes which explains the overall low inventory level of homes I've been seeing. Analyzing Condominiums and Townhomes, since February of this year Pending homes have been exceeding Active homes again showing a clearing out of inventory in that class of homes as well.
Overall low supply and high demand is causing the return of multiple offers and I had to stand in line at a new home development on the release morning. It's not the year 2000, but it is slightly reminding me a little of those days.
Macro Economy United States
The US downgrade and concerns on Europe are causing much uncertainty in the market place. The stock market has been in a free fall so we'll have to see how this shakes out. However, there is good news, I've seen interest rates go further downward in the last few weeks. An article today stated that interest rates are the lowest in 50 years. Also the Fed has indicated it will keep rates low as well to try to send some security to the marketplace. The question specific to the valley is how will factors of the Macro Economy affect Venture Capital funding into technology start-ups and ultimately affect companies looking to liquidate and enter the public market place. Also how does consumer spending as well as enterprise spending affect companies in the valley from a Revenue and Cash Flow perspective. This will all trickle down into how much the average worker like you and I have to spend on housing. I do wish our politicians would be able to compile and execute a viable solution to our debt problem but it it not looking as if this is the case.
- There is a subdivision of 4 new homes I've been watching for over a year. It's located in Mountain right on the border of Varsity Park/Los Altos border going between $1.15M to $1.4. The schools are Mountain View schools though but an opportunity nonetheless. Let me know if you are interested before they are released.
- There is a new Townhome development in which I really like the 3 and 4 bedroom models in the middle of the Bay Area, ask me about them!
- There is a new Santa Clara townhome development that I am keeping an eye on, ask me for more details
Top Award in June
Again it is thanks to your trust and referrals that Keller Williams awarded me the Top Associate in Closed Volume, Closed Units and Written Volume. Thank you for all your support over the years and I continue to look forward to supporting you in your Real Estate needs.
Home Sales in Q3
I always like to give my clients real data from the market so you can gauge for yourself how things are going.
- 717 Madrone in Sunnyvale - Beat out 7 offers and did not overpay! It's all about having the right strategy that varies per home
- 107 Holly Terrace in Sunnyvale - Bank owned foreclosure sold to my Buyers under the comparable prices, picked up after another Buyer decided not to proceed
- 1343 Sarita Way in Santa Clara - This listing was in Sale Pending when the kitchen caught fire and we had to re-model and repair the inside. The local mailman went beyond the call of duty and saved the day! Check out the video! http://sanfrancisco.cbslocal.com/category/watch-listen/video-on-demand/?autoStart=true&topVideoCatNo=default&clipId=6079667. Happy to say that after all the re-modeling and coordination, the home is now SOLD!
- New Home Development (x2) - Most popular plan in this new community sold to 2 sets of my Buyers. One home was part of a first phase release which typically always have the best prices, we moved fast and secured the home. The second home I had to stand in line for 2 hours before opening on release day and beat out at least 3 other interested parties in line for that exact unit
There is a-lot of uncertainty in the global economy over the last few weeks which is some cause for concern. Up until that point, Bay Area real estate was recovering nicely in Santa Clara County especially homes close to companies. Inventory remains generally low. We will have to monitor how the Macro Economy affects our Micro Economy. My advice if you have a stable job take advantage of the low rates and get out of that increasing monthly rent. If you are a homeowner call me so I can assess where your home is at and whether you should hold steady or sell at this time.
Again thank each and everyone of you for your business over the years and all the referrals you have entrusted me.