Market County Overview

Winter Quarter 2020 Market Review

Santa Clara County

• In Santa Clara County, single-family home median prices of $1.4 million tied last quarter’s all-time median high, confirming that this remains a very strong market, and 2020 prices were above comparable prices in 2019 throughout the year. Dr. Eisenberg says, “Home prices in Santa Clara County continue to appreciate at levels just slightly above the national trend.”

• Single-family home sales have recovered nicely from a weak Q1 and a disastrous Q2, and in an interesting twist, Q4 was the strongest quarter of the year in terms of sales. Dr. Eisenberg notes that you saw nearly one third of your total 2020 sales in Q4 when normally that would be your slowest quarter of the year. It appears that, for now at least, seasonality disappeared due to covid. For all of 2020, sales are just barely over 2019 levels, but the number of pending sales at year-end is double what was in the queue at the end of 2019.

• While the available units for sale are up 21.5% compared to last December, months of inventory is at a near record low of 0.7. Overall, Santa Clara County is a super strong market being driven by very strong demand.

• In the common interest market in Santa Clara County, the median sales price of $835,000 is up 6.4% year-over-year but is well off the highs seen in mid-2018 through mid-2019. Q4 sales were at the highest level since Q2 of 2018 and pending sales are well above last December levels, preparing for a good first quarter of 2021. New listings are well above normal for this time of year, bumping inventory above the same point last year, but inventories are still very tight, especially given the number of sales.

San Mateo County

• With a median sale price of $1,680,840, San Mateo County saw a record fourth quarter price and the third highest overall quarterly median price. Prices gained 8.7% or $133,840 over last year. Dr. Eisenberg notes, “Price data show no evidence of any sort of an exodus from San Mateo County.”

• Closed sales are up 30.6% over last year, the largest year-over-year gain since Q3 of 2003, and are at an almost 20-year high. For the year-to-date, sales are up 1.6% over 2019, a bit amazing when you consider the covid-related shutdowns of the spring of 2020. Dollar sales volume has skyrocketed over the last two quarters, and for the year, gained 11.5% over last year. Dr. Eisenberg notes that “I think we see signs that in 2020 at least, seasonality has gone out of the window. With work-from-home, online schooling and smaller or non-existent holiday gatherings, the traditional Q4 slowdown in the real estate market mostly disappeared. It may partially reassert itself in 2021, but I think that to some extent, this is part of our new normal.”

• Q4 new listings were up substantially, but with an even higher level of sales, inventories continue to tighten. Although the actual number of available listings is higher than it normally is in December, there is still just 0.8 month’s supply of inventory available.

• We saw plenty of activity in the common interest market in San Mateo County, with sales and new listings up considerably. The market is tight, but not as much as the single-family market.

Santa Cruz County

• Median sale prices rose to an all-time high price of $1,055,000 in Q4 in Santa Cruz County. Dr. Eisenberg comments “We’ve seen two consecutive quarters of double-digit price appreciation in Santa Cruz County, coupled with big gains in sales. I speculate that perhaps this is being driven by some families moving within the Silicon Valley to slightly more affordable areas as part of the work-from-home phenomenon. If your employer is now allowing more remote work and you are no longer facing a daily commute but still want to stay close enough for periodic trips to the office, Santa Cruz and Monterey Counties give you proximity without the price.”

• Closed sales rose 7.8% in 2020 compared to 2019 and sales volume of single-family homes gained 18.9% over 2019. Inventory levels declined in Q4 (in contrast to Santa Cruz and San Mateo Counties, where they rose) and percent of list price received at sale tapped 102%, the highest level in recent memory, while days-on-market were half what they were a year ago.

• In the Santa Cruz area, prices for multi-family homes of $649,000 were at a record high for Q4 and were up 9.8% from last year, but they were down from the all-time high set last quarter. Closed sales were up 30.2%, but pending sales compared to last year were down 11.1%. For all of 2020, closed sales were up 8.3% and dollar volume was up 18.0% compared to last year. The common interest market in Santa Cruz remains a strong market, but not quite as strong as the single-family market.

Monterey County

• Monterey County saw incredible price appreciation, to all-time highs, with median sales prices rising 27.8% to $829,995 and the average price rising 31.4% to $1,346,111. Dr. Eisenberg says, “We may be seeing the work-from-home effect at play here in Monterey County. With a median sales price of $830,000 in Monterey County, compared to $1.68 million in San Mateo County and $1.4 million in Santa Cruz County, Monterey County provides an affordable option for someone who is not commuting into the office as frequently as before. The challenge will be limited inventory, especially with both closed and pending sales up significantly over 2019 for the last half of 2020.”

• For all of 2020, closed sales were up 2.6% while total sales volume was up a staggering 32.3% over 2019, by far the largest year-over-year percentage gain in the Valley.

• The common interest market in Monterey County is very solid but is certainly not seeing the frothiness of the single-family market. Prices slipped from the all-time high of $575,000 seen in 20Q3 to $539,000, still the second highest level in recent memory. Q4 sales were up a solid 20.2%, but for the year were down 2.2% compared to last year, and 2020 sales volume compared to 2019 was nearly flat. The data here is good, but just not as strong as the single-family market.

San Benito County

• In San Benito County, median sales prices rose to their highest all-time level of $675,000, while closed sales rose by double-digits for the second quarter in a row. Dr. Eisenberg comments, “You should see price appreciation like this in the summer, not around the holidays! Clearly, we are seeing a tempering of seasonality and I don’t see this changing until perhaps next fall as vaccination rates rise and we go back to a normal school schedule.”

• For the year, closed sales are up 4.3% and sales volume was up 11.5% compared to 2019. Dr. Eisenberg notes this may be reflective of some intra-Valley movement if buyers are moving from the more expensive areas to more affordable San Benito County.

• In the common interest market in San Benito, there is a limited amount of sales data to analyze, but clearly the 17.1% year-over-year increase in closed sales and 23.8% gain in sales volume are signs of a good, solid market.

Chinh Nguyen-Duc, MLS Listings, Inc

Where will interest rates go this year? Let's take a peek

From San Jose Mercury News, January 9, 2021

CTW FEATURES

The past year will undoubtedly go down in history as one of the most challenging, controversial, eventful and unpredictable years ever. After struggling with the coronavirus, economic downturn, social unrest and political friction, many are eager to see what 2021 is going to offer. But one bright note over the past year that many hope will continue this year is historically low mortgage interest rates, which have dipped below 3 percent during the past few months and made it much more affordable for many buyers to purchase a home.

With a fresh year ahead of us, many are wondering: Will rates remain enticingly low, possibly dropping even further? Or are rates due to trend upward over 2021?

In their most recent reports, several prominent housing/real estate organizations predict that attractive rates are here to stay in the near term. For example, Fannie Mae prognosticates that rates for the benchmark 30-year fixed-rate mortgage will average 2.7 percent this year; Freddie Mac, meanwhile, forecasts 3.0 percent, and the National Association of Realtors expects these rates to average 3.2 percent.

That's good news for prospective borrowers seeking to buy a home or refinance their existing loan in the coming months. Lower mortgage interest rates can decrease monthly mortgage payments and increase purchasing power for home shoppers.

But remember: These are predictions. A lot can happen between now and the end of 2021 to affect interest rates and your ability to afford a home or refinance your mortgage.

"Fortunately, the Federal Reserve has made it clear they aren't going to move the federal funds rate anytime soon, which points to mortgage rates hovering about where they've been lately well into (2021)," says Grant Moon, CEO of Denverbased Home Captain, who anticipates the rate for the 30-year fixed-rate mortgage to average 3.25 percent across 2021. "I believe the deepening impacts of the pandemic and political instability will likely continue adding stress to our economy, and this will reinforce the Federal Reserve's decision to keep rates low." Matthew Wright, CFO of Murfreesboro, Tennessee-based First Community Mortgage, foresees rates in the 2.75 to 3.25 percent range throughout the coming year.

"The impact from COVID-19 has been felt throughout the U.S. economy, and the timeline for recovery remains uncertain at best. Given this downward pressure and its anticipated lasting effect, I expect rates to remain at recent lows for an extended period," he says. "Look to the data surrounding vaccines, case counts, death counts, consumer confidence and the feeling of safety among the general population as good bellwethers for a rebound in the economy." Preetam Purohit, head of hedging and analytics for Middletown, Rhode Islandbased Embrace Home Loans, believes rates will sink as low as 2.625 percent in 2021 before closing out the year higher at 3.5 percent.

"We should see unemployment come down and the economy back on track, eventually leading to a rapid increase in Treasury yields, which will make mortgage rates rise. Of course, a lot of this will depend on the election results, fiscal stimulus and coronavirus control," Purohit explains.

Ethan Taub, CEO of Loanry in Southern California's Newport Beach, agrees with Purohit.

"I expect the 30year mortgage to go back up to around 3.5 percent by the end of 2021. That's because the economy will be in a better position and businesses will start helping the markets get back on their feet," he says. "But in the first six months of 2021, I can see rates a bit lower, at around 3 percent." While the aforementioned rate predictions aren't unanimous, there isn't a great numerical disparity between the lowest and highest estimates. In other words, we should probably expect mortgage interest rates to remain at or near historic lows for the foreseeable future.

"The first half of 2021, in particular, will continue to provide a great opportunity to purchase or refinance a loan due to continued attractive rates," Purohit says.

However, until home inventory levels rebound, some fear that 2021 will be challenging for prospective buyers.

"Many homes are already too expensive right now. I would think about waiting to purchase until later in the year in the hopes that the housing supply increases," Moon recommends.

https://enewspaper.mercurynews.com/?selDate=20210109&goTo=30&artid=1

Santa Clara County Real Estate Market Stats July 2020

Santa Clara County Stats

June/July Back to Pre-COVID Numbers

With lesser restrictions to showing properties and record-low mortgage lending rates, we are bouncing back to Pre-COVID seasonal sale numbers. (Santa Clara, San Mateo, Santa Cruz, Monterey, San Benito counties)

Santa Clara County Housing Market Update

Median Prices Hold Steady, But Sheltering In Place Showing Its Impact

• Despite the shelter-in-place (SIP) order in mid-March, median prices held up in April, even gaining compared to last April in 4 of the 5 MLSListings counties:

  • Santa Clara

  • San Mateo

  • Santa Cruz

  • San Benito

  • Monterey

• Santa Cruz County showed a 4% decrease in median price. Premiums (i.e., the amount paid above/below the list price) also closely mirrored last year, with San Mateo at 104%, Santa Clara at 103%, Santa Cruz and San Benito both at 99%, and Monterey at 98% on average.

• However, the SIP showed its effects dramatically in closed sales, which were off by up to 50% from 2019, with San Mateo down (50%), San Benito at (49%), Monterey at (44%), Santa Clara at (36%), and Santa Cruz County dipping (33%).

• Moreover, new listings were off, ranging from (39%) in San Mateo and Santa Cruz counties to (57%) in Monterey County. This will impact total inventory in what are typically the busiest months of the year.

• In San Mateo County, the median Single Family home cost $1,640,000 and sold in 9 days for 104% of the list price based on 195 sales in April 2020.

  • Inventory was up 19% from March, and down -6% from April 2019 with 501 homes available, compared to 534 homes last year.

  • Average days on market (DOM) remained the same as March at 21 days; median DOM dropped -1 day from the month before.

  • Number of new listings for the month of April decreased -18% over March, and was down -39% from April of last year.

  • Closed sales dropped -31% from March from 281 to 195, and was down -50% from April 2019.

• In Santa Clara County, the median Single Family home cost $1,390,000 and sold in 8 days for 103% of the list price based on 564 sales in April 2020.

  • Inventory was up 20% from March, but down -31% from April 2019 with 1056 homes available, compared to 1524 homes last year.

  • Average days on market (DOM) dropped -4 days from 22 to 18 or -18%; median DOM remained the same as the month before.

  • Number of new listings for the month of April decreased -18% over March, and down -46% from April of last year.

  • Closed sales decreased -12% from March from 638 to 564 and down -37% from April 2019.

• In Santa Cruz County, the median Single Family home cost $949,000 and sold in 9 days for 99% of the list price based on 95 sales in April 2020.

  • Inventory was up 10% from March, and down -23% from April 2019 with 346 homes available, compared to 448 homes last year.

  • Average days on market (DOM) dipped -19 days from 48 to 29 or -40%; median DOM dropped -2 days from the month before.

  • Number of new listings for the month of April decreased -19% over March, and decreased -39% from April of last year.

  • Closed sales lost -8% from March from 103 to 95 homes sold. This was down -33% from April 2019

County listing data and analysis is courtesy of Aculist, an MLSListings in-house startup that provides business analytics

• solutions for real estate professionals. To learn more, visit Aculist.com.

COVID-19 Market Impact

Housing Perspective

The Coronavirus outbreak has generated a significant amount of uncertainty in financial markets and for the global economy. The range of potential impacts varies wildly from forecaster to forecaster, but it has become clear that this is unlike anything the U.S. has faced in modern history.

Encouragingly, the federal government is beginning to take significant steps on fiscal and monetary policy to help offset the effects of the outbreak. Congress is poised to pass a $2 trillion stimulus package that includes direct payments to Americans, expanded unemployment/sick leave benefits, funding for hospitals, and many other provisions aimed at supporting business activity. In addition, the Federal Reserve is taking unprecedented steps to bolster the financial system including a virtually unlimited commitment to providing liquidity to several key markets including the MBS market, money market facilities, and corporate debt markets—something it has never done before.

Low rates should persist domestically after banks, servicers, and investors adapt to the initial shock to mortgage markets. Spreads are still running roughly 100 basis points higher than normal, limiting some of the short-run benefits, but will likely revert back to historical averages over the medium term. It is also important to note that this too shall pass. Economic activity in China, which is roughly two months ahead of the U.S. in its outbreak trajectory, is beginning to see economic activity rebound. Home sales have begun to pick up as well, providing some optimism for our potential recovery if we can get the U.S. outbreak under control in a similar timeframe. If China is a reasonable model, we can expect the economy to bounce back once we are past the outbreak, but some sectors will take longer than others to recover.

Still, the U.S. economy still has a long way to go before the economy begins to rebound again. Despite the myriad forecasts for the depth of the current slowdown in the economy, every forecast has one thing in common: the longer the outbreak, the worse the economic impacts will be. REALTORS® are already seeing buyers and sellers holding back in the market, new listings have started to fall in areas with shelter in place rules, the second quarter is expected to contract sharply during the second quarter, and new claims for unemployment had their single-largest weekly increase in history.

The U.S. is clearly not out of the woods yet, but it is encouraging to see actions being taken to mitigate some of the negative economic impacts associated with the outbreak. There are still many challenging weeks and months ahead of us but real estate is poised to do well during the recovery in a low-rate environment. And, the nascent recovery in China suggests that the recovery will begin over a period of months, not years, once the infections drop off.

Preparation Is Key for First-Time Home Buyers

Getting ready to buy your first home can be overwhelming. But understanding every step of the process and some preparation can go a long way toward helping to make one of the biggest investments of your life a smooth experience.

Are your finances in order? How much house can you afford to buy? Are you aware of closing and insurance costs? What about property taxes and homeowners’ association (HOA) fees?

Making the transition to first-time homeownership may seem overwhelming as you learn various real estate terms, provide proper documentation for financing and navigate the many things needed for the home purchase to be approved. While it’s easy to search for answers online, some issues won’t be easily resolved without the help of an experienced mortgage broker and real estate professional.

In its 2018 Profile of Home Buyers and Sellers, the National Association of REALTORS® (NAR) reported that first-time home buyers made up 33% of all buyers. Additionally, 87% of buyers purchased their home through a real estate agent or broker.

If you are considering buying your first home, here are a few points you may want to keep in mind throughout the process:

It is important to understand the financial aspects involved in buying a home. For example, you will need to set an honest and realistic budget for an affordable mortgage payment. Compile all the necessary financial documents, including credit reports and scores, save up for a down payment and try to boost your credit score if it is not rated very good to excellent. In the 2018 Profile of Home Buyers and Sellers, NAR reports that first-time buyers who financed their home typically financed 93% of their home, compared to repeat buyers at 84%. If you’re unsure where to start, a mortgage broker should be able to help.

Make sure you consider all the costs involved in buying and owning a home, including principal and interest on the loan, taxes, insurance and inspection costs, as well as future costs like utilities, maintenance, commuting, HOA fees and possible home upgrades.

If you don’t understand a term or know what to do next, always consult an expert. As an experienced real estate professional, I can help you find a property, negotiate the deal and guide you through every step of the home-buying process.

To learn more about how to start planning for your first home purchase, contact a Coldwell Banker Residential Brokerage-affiliated sales associate today. Whether you are looking to buy a home now or are taking steps to purchase one in the future, a Coldwell Banker agent can help find the answers you need.

How to Sell a House Fast and for the Best Price

Spring and summer are a great time to list your property, but to sell your property quickly and for the best possible price, you’ll need a smart and sound strategy. Beyond preparing your home by making repairs and improvements, deep cleaning, decluttering and sprucing up the exterior and yard, here’s how you can boost your chances of a fast sale for top dollar.

Choose the right agent. An experienced agent with a proven track record of sales and a thorough knowledge of the local market is invaluable. An agent can provide a competitive market analysis (CMA) that shows comparable properties that are on the market or have recently sold and offer insights into what potential buyers will like or dislike about your home. Having an agent can also ease your stress by helping you navigate the entire selling process in a timely manner and ensuring a smooth transaction.

Price your home correctly. You’ve put a lot of time, effort and money into making your home shine, and you’re proud of it, but don’t let your ego influence the listing price. Nothing dooms a real estate deal faster than an overpriced property. If priced correctly, your home will likely attract the highest and best offers during the first 30 days after it’s listed. If it’s priced too high, your home will linger on the market, and even after you lower the price, buyers may be leery and wonder if something is wrong with it.

Get a pre-inspection. Most people have a pretty good idea of their home’s overall condition, but there still can be issues they may not know about. As a seller, you know the buyers will need to have a home inspection done before they agree to purchase the property. Getting a pre-listing home inspection allows you to find out the condition of your property and make any needed repairs, so you can put your home on the market knowing you’ve corrected any problems that could potentially cause a sale to fall through later.

Promote your home on social media. Successful agents know that sharing sellers’ listings on social media can help sell homes faster, and sellers should do the same. By sharing your listing online, you’re exposing it to a sizable audience that can grow even larger if a few friends share your post.

If you are considering listing your property this spring or summer, get started by contacting us today.

Tips for First-Time Home Buyers

Buying your first home can be intimidating, but it doesn’t need to be. Understanding every step of the process and planning ahead to avoid potential setbacks can help ensure a successful experience.

Are your finances in order? Are you aware of closing and insurance costs, as well as property taxes? Do you understand escrow? Do you know how much real estate you can afford to buy?

Making the transition to first-time homeownership may seem daunting as you learn new terms, provide proper documentation for financing and find out how many pieces need to fall into place for the home purchase to be approved and completed. While it’s easy to turn to the internet for answers, some issues will not be easily resolved with an online search.

In its 2018 Profile of Home Buyers and Sellers, the National Association of REALTORS® (NAR) reported that first-time buyers made up 34 percent of all home buyers, about the same percentage as the past couple of years. In addition, 87 percent of buyers purchased their home through a real estate agent.

If you are considering purchasing your first home, here are a few points to keep in mind throughout the process:

It is important to understand the financial aspects involved in buying a home. For example, you need to set a realistic budget for an affordable mortgage payment. Compile all the necessary financial documents, save up for a down payment and improve your credit if it is not already rated very good to excellent. According to the NAR’s 2018 Profile of Home Buyers and Sellers, 88 percent of all buyers financed their homes. Of those, the majority paid 10 percent of the price as a down payment and financed the remaining 90 percent. If you don’t know where to start, a mortgage advisor can help.

Consider all the costs involved in buying and owning a home, including principal and interest on the loan, taxes, insurance and inspection costs. Also remember to think about future costs like utilities, maintenance, commuting, HOA fees and possible upgrades.

If you do not understand a term or do not know what to do next, always consult an expert. An experienced real estate professional can help you find a property, negotiate the deal and guide you through every step of the home buying process.

To learn more about how to start planning for your first home purchase, contact us today!