2019 Mid-Year Real Estate Update for Santa Clara, Santa Cruz, and Monterey

sebfreyCharts and Statistics, Commentary, Local, North Monterey County Real Estate, Santa Cruz Real Estate, Silicon Valley Real Estate

And here we are, just past half-way through 2019! Happened so quick, I’ll bet you feel a bit of whiplash. It’s been an interesting half-year so far, especially when it comes to the Monterey and San Francisco Bay Area real estate market. For this 2019 Mid-Year Real Estate update, I took a dive through the MLS (Multiple Listing Service) to dig deep through the numbers for Santa Cruz, Santa Clara, and Monterey counties for the first six months of the year. So how is our real estate market doing, at the mid-point of 2019? One that comes through loud and clear is that just like politics, all real estate is local. The story told through these numbers is much different in all three counties.  If you want, you can skip down to the county that interests you most:  Santa Clara, Santa Cruz, or Monterey. Seb Frey Talks Real Estate Mid-2019 on Seb Frey TV Santa Clara County Santa Clara County is the heart of Silicon Valley – what happens there affects the real estate market for a large portion of northern California, and all of the San Francisco and Monterey Bay Areas.  The numbers for the first half of 2019 are markedly different than the first half of 2018.  In particular: Homes are taking almost twice as long to sell this year (93% longer) Price Per Square Foot has dropped 6.76% Average Sale Price has dropped 6.63% Median Home Price has dropped 8.95% Sale to List Price Ratio down 8% Home Sales are down 9.5% this … Read More

Hottest U.S. Real Estate Markets in February 2018

sebfreyCharts and Statistics, Commentary

It's One Hot Market

The folks at Realtor.com have come out with their list of the top 20 hottest housing markets in the United States…and, no surprise, California dominates the rankings. Not for the first time, our beloved city by the bay, San Francisco, takes the top prize as the hottest housing market in the entire United States. Once again, as in so many other ways – the city is #1. A lot of other northern California cities made the top 20 however: #3: Vallejo #4: San Jose #5: Sacramento #7: Santa Rosa #10: Stockton #11: Santa Cruz #13: Chico #15: Modesto #17: Fresno And, in fairness to our southern cousins, I’d like to point out that these other great California towns made the list: #9: San Diego #14: Oxnard #20: Los Angeles You may be asking, how did they determine which housing markets are the hottest?  It’s not about how much prices are rising year over year.  Their magic formula is quite simple: Using the key indicators of days on market and listing views per market, realtor.com came up with its monthly list of the hottest real estate markets in the nation. OK, so maybe that’s not the most scientific method in the world to determine the hottest housing markets. But it’s at least pretty good anecdotal evidence, strong enough to make me ask: What are you waiting for? This is the hottest seller’s market we’ve seen since…well, that’s hard to say, because the market has been pretty hot for years. It’s like the weather now – fire season … Read More

2018 California Housing Forecast

sebfreyCharts and Statistics, Commentary

Watch the 2018 California Housing Forecast Video Also available in audio-only format on the Bay to Bay Podcast Last October, I was fortunate enough to attend the California Association of Realtors Conference and Expo in San Diego.  One of the highlights of the multi-day event was the presentation given by Leslie Appleton-Young, the Chief Economist for the California Association of Realtors (C.A.R.).  The presentation was a 2018 California Housing Forecast, and included very detailed charts and statistics. I recorded the audio of the presentation on my iPhone and received the PowerPoint slides later from Leslie herself.  With the audio and the slides, I was able to create the video you see here on this page. It should be noted that the much of the presentation details what had already happened in California in 2017.  After all, much of what will happen in 2018 will be dictated by what happened in the past.  And some of the presentation is intended for the audience seated in the hall that day, that is to say, members of the California Association of REALTORS. But most of the information will be of considerable interest to anyone who is concerned with housing in California.  Given the incredibly high cost of housing here, I figure you’ll be interested in a lot of this information whether you rent or own. Key Points from the 2018 California Housing Forecast US economic and job growth expanding Job growth continuing, but slowing, in California Mortgage interest rates rising to 4.3% average for year U.S. GDP to grow … Read More

California 2017 Real Estate Market Forecast

sebfreyCharts and Statistics, Local, North Monterey County Real Estate, Santa Cruz Real Estate, Silicon Valley Real Estate

California 2017 Real Estate Forecast

Last week, I attended a presentation by Leslie Appleton-Young, who is the Chief Economist for the California Association of Realtors (CAR). She gave a very interesting presentation, most of which was actually about what’s happened so far in 2016, finishing up with a California 2017 real estate market forecast.  Listening to what she has to say really helps understand why the California real estate market looks the way it does today. While much of her discussion was about today’s real estate market, she did devote considerable time to where the market is headed in 2017.  I recorded the audio of the presentation on my iPhone, and downloaded her deck of PowerPoint slides. I married up the audio with the slides to create a video presentation – it’s nearly 50 minutes long, and you can view right here: Video Presentation:  California 2017 Real Estate Market Forecast There’s a whole lot of detail and a ton of interesting insights into the California economy and housing markets, and if you do have the time, it’s highly worth listing to and watching. But in case you don’t, I wanted to pull out a few tidbits, quotes, and statistics I think you will find interesting. They are here: According to Leslie, the Bay Area economy is strongest, fastest growing economy in the country CAR is projecting a 6.2% median home price increase for 2016 California as a whole has a median price that remains 12.6% below the prior peak Santa Cruz county is up 5.6% over prior peak Santa Clara up 21.4% San Mateo … Read More

The 7-10 Year Real Estate Cycle

sebfreyCharts and Statistics, Silicon Valley Real Estate

The Real Estate Cycle

This morning I watched a new YouTube video that had recently been posted which touched on the 7-10 Year Real Estate Cycle. The video’s author encouraged all Realtors to differentiate their message to the public by not talking about how hot the market is, but rather, about how we’re about to reach the end of it. Ever alert for a shifting real estate market, I tuned in and watched. The thrust of the argument of the video was that the real estate market is cyclical: it goes up, it comes down, and we are right now nearing a market peak which, according to the video’s author, we’ll hit in 6-18 months. The interesting thing about this video is that there was no actual data given to show how this will happen, other than the axiom that the real estate market is like a clock, and that it cycles every 7-10 years. This is something I’ve heard many times over the years, and it got my brain going. It’s not like I myself haven’t ever predicted that the market is about to turn, just like I’ve recently predicted that 2016 is going to be a banner year for real estate in our area. Based on the invisible hand of the 7-10 year real estate cycle, might 2016 prove to be a peak year for Silicon Valley real estate? Being something of a data geek, I went looking for the data. I was looking specifically for Santa Clara county historical pricing data – and I could only find … Read More

Bay Area Real Estate Market Set to Explode in 2016

sebfreyCharts and Statistics, Santa Cruz Real Estate, Silicon Valley Real Estate

California Housing 2016 Explosion

Ahh, a new year, and as always there’s no shortage of prognostications of what we can expect in days, weeks, and months ahead. Predicting the future is a notoriously risky business, as of course, anything could happen in the next few minutes which would drastically alter any outlook. But setting aside the possibility of any black swan events, I can confidently say that the bay area real estate market is set to explode in 2016. Why do I say that? Well, a few days ago, I posted about how 12 of the 20 hottest markets in the entire U.S.A. are in fact in California. And, surprise surprise, many of them are in the Bay Area: #1 San Francisco, #2 Vallejo, #4 San Jose, #17 Santa Cruz. And for good measure, I’ll mention that four more are in northern California: #7 Sacramento, #8 Santa Rosa, and #10 Stockton and #13 Yuba City. The heat from the past year alone is plenty of indication that the year to come should be pretty darn smokin’ no matter what. But forget last year – what about last month? Normally, December is the sleepiest month in the real estate business. Tummies are full from Thanksgiving, and heads are swimming from too much eggnog and Candy Crush. The weather is chilly (unless of course you’re on the east coast) and the days are shorter. It’s no surprise that in a month like December, most of the real estate community can usually be found sleeping pretty late. This past December, however, the market … Read More

Incentives Offered to Buyers in 2013, Western Region

sebfreyCharts and Statistics

Incentives Offered to buyers in 2013, Western Region

What does it take to get a buyer to sign on the bottom line and agree to buy your home? In some parts of the country, it’s common to bribe buyers with a lot of incentives. But the data show that Incentives Offered to Buyers in 2013, Western Region USA were actually fairly modest: Source: National Association of Realtors 2013 Profile of Home Buyers and Sellers Despite what you may have heard, a full 74% of home sellers in the Western Region of the USA in 2013 offered no incentives to buyers whatsoever. When incentives were offered, the most common incentive – with 12% of sellers offering this – was a home warranty. The average home warranty price is around $400, but costs can vary anywhere from $350 to $650 (or more, for a large house with lots of expensive amenities like hot tubs, pools, etc.). A $400 concession on a $400,000 sale price is one tenth of one percent – that’s some concession! Some sellers did have to make more significant concessions: 11% offered closing cost credits, which rarely exceed 5% of the purchase price due to lending restrictions. Another 7% offered repair credits, which could run in to thousands of dollars, easily. 4% of sellers threw in some personal property – things like televisions and furnishings. The market was hot in 2013, but even in an off year, sellers do not typically offer heavy incentives to buyers in California. It’s the Golden State, and real estate continues to be in strong demand in most … Read More

Sales to List Price Ratio 2013, Western Region

sebfreyCharts and Statistics

Sales to List Price Ratio 2013, Western Region

How much do home sellers typically get for their homes when they go to sell them? Check out this chart of the Sales to List Price Ratio 2013, Western Region USA: Source: National Association of Realtors 2013 Profile of Home Buyers and Sellers As you can see, if you had a house to sell in 2013 in the Western United States (I’m looking at you, California!), 6% of home owners received more than 110% of full asking price for their homes. Pretty good if you’re in that top 6%! But another 8% received between 101% and 110% of asking price – and that’s incredible too. But then another 23% of home sellers received a full 100% of asking price on their homes – so that means 37% of home sellers in 2013 received full asking price or higher – and often, a lot higher. The not-so-great news is that 63% of sellers received less than asking price on their homes – an indication that their homes were at least somewhat overpriced. And there’s other data that shows that overpriced homes take longer to sell…and since the way you live in a home is different than the way you sell one, it makes for a happier selling experience if you are able to get your home sold quickly – and at or over asking price.

Sales to List Price Ratio by Weeks on Market

sebfreyCharts and Statistics

Sales to List Price Ratio by Weeks on Market

Is it true that the longer it takes to sell your home, the less you are likely to receive for it? There’s a lot of evidence that indicates this is in fact true. Check out this chart, which illustrates the sales to list price ratio by weeks on market: Source: National Association of Realtors 2013 Profile of Home Buyers and Sellers As you can see, homes that sell within the first 1-2 weeks of being listed on the market get, on average, 100% of asking price. As time goes on, you can see that the sales to list price ratio begins to drop: by 3-4 weeks on market, the ratio drops to 98% of asking price, and by 5-16 weeks on market, sellers receive an average of 96% of asking price. But then look what happens for listings averaging 17+ weeks on market: sellers receive only 92% of asking price on their listings. Some of this is due to the fact that homes were initially overpriced, and it took a while for sellers to drop their price to a point at which it would sell. If you are in a situation where your house is vacant and you’re looking at paying to keep up that property (taxes, mortgage payments, maintenance, etc.), it can get very expensive to over-price your home. What isn’t shown on this chart, and which is hard to quantify, is what would have happened to these 17+ week sellers if they had priced their homes correctly? Would they have ultimately netted more money … Read More

Information Sources used by Homebuyers

Seb FreyCharts and Statistics

Information Sources used by Homebuyers

In this Age of Internet, it might not surprise you to learn that, according to the National Association of Realtors 2013 Profile of Home Buyers and Sellers, in the western U.S., 91% of home buyers in 2013 used the Internet to help them find and research homes. If there’s any surprise there, it’s that the number isn’t actually closer to 100%. But what other surprises can be found in the report? Well, for example – 91% of home buyers also worked with a real estate agent. And 52% of home buyers also used good old fashioned yard signs in front of homes as part of their search, and 44% of home buyers attended at least one open house. It was only in 2007 that the iPhone was born – and ushered in the era of the “mobile web.” Today, only a few years later, fully 45% of home buyers used mobile web sites and apps in their home buying search – and 43% of buyers used mobile-optimized search sites. Not only that, 26% of buyers utilized on-line video sites to view homes as well.