In the context of the horrible fires we’ve seen in recent weeks – with so many of our communities and neighbors so terribly affected – a real estate report seems trivial. But since I have clients still trying to make buying and selling decisions, I’ll continue to deliver straightforward data on market conditions. Surprisingly, the fires did not significantly impact the number of deals being made in most Bay Area counties during the last 2 weeks of August – the exceptions being those worst affected by the crisis: Santa Cruz (-33%), Sonoma (-22%), Monterey (-16) and Napa (-13%). However, activity began to pick up again in Santa Cruz County in the first week of September – though still about 20% below the pre-fire level. (This week by week chart runs through the end of August.) Year-to-date house sales volumes and median sales prices by city: Short-term and long-term median house sales price trends are illustrated in the following two charts. Average house dollar per square foot values: A snapshot measure of how many listings were typically active on any given day of the specified month: Inventory levels have been running very low, a big factor in market dynamics. Active house listings and median house asking prices by city, as of 9/7/20: These numbers will change daily with ongoing market activity. The percentage of active listings going into contract by month: A clear indicator of how high buyer demand has been this summer. The number of price reductions has been very low, another indicator of a very … Read More
Median House Sales Price – Short-Term & Long-Term Trends Bay Area Markets Comparison This table ranks each county by the percentage of active listings going into contract in June/July 2020, a standard statistic of market heat, compares it to the same period of last year, and then rates the scale of the year-over-year change. Many counties are seeing dramatically increased demand over last year, with Santa Cruz seeing one of the biggest jumps. Supply & Demand Active listings, new listings, listings going into contract, closed sales volume Lower inventory levels + increased buyer demand Higher-Price Home Sales – Year-over-Year Comparisons Selected Market Indicators Price reductions, average days on market, months supply of inventory, sales price to list price percentage
The Truth about Overpricing your Bay Area home Click here to skip down to the charts and graphs for Santa Clara, Santa Cruz, and Monterey counties. Fair market value is that price a qualified, reasonably knowledgeable buyer is willing to pay, which a seller, not under duress, is willing to accept after the home has been properly exposed to the market. Many sellers, however, set a price higher than the market will bear – to their significant detriment. This article explores the dangers of overpricing your bay area home, with lots of facts, figures, charts, and statistics. Ironically, instead of getting more money… Over-pricing usually stigmatizes a property and reduces the eventual sale price to less than it would have been with more realistic pricing.”House Selling for Dummies Neither agents nor sellers determine market value: Only the market – willing and able buyers — determines market value. Agent and seller work together to create a plan which includes pricing, preparation and marketing — to maximize the conditions that reliably achieve the highest possible sales price. The vast majority of buyers will not make offers on homes they consider significantly overpriced. Either they don’t want to waste their time, or are uncomfortable with possibly “offending” the seller. In any case, they simply move on to other listings. Well-priced homes create a sense of urgency in the buyer/broker communities to act quickly with strong, clean offers, and often lead to competitive bidding between buyers – which is the most likely way to increase sales price. Overpricing wastes the … Read More
Market Activity Soars after Early Spring Decline Recovering from the initial shelter-in-place drop in sales activity, Santa Cruz County has now jumped well above the highest points of the past 2 years. The first 2 charts below illustrate the big rebound in listings accepting offers in both the general residential market and the higher-price home segment. The Bay Area markets with the largest year-over-year increases in the number of listings accepting offers in June 2020 were the 4 outer Bay Area counties of Monterey (up 61%), Santa Cruz (58%), Sonoma (47%) and Napa (37%). They also have among the lowest population densities in the Bay Area. The more urban counties saw more modest y-o-y increases: San Francisco (6%) and Alameda (7%). The year began with a relatively low inventory of homes for sale, and though that number has been increasing, it is still well down year over year. The next 4 charts look at median home sales prices from a variety of angles. Remember that median sales prices are not perfect indicators of changes in fair market value: They can fluctuate due to a number of other factors as well. Average days on market were quite low in the last quarter, a common dynamic in Bay Area markets. The homes that sold went into contract relatively quickly. In Q2 2020, the average sales price was 2.5% below asking price. And interest rates hit another all-time low in early July, adding fuel to buyer demand.
The real estate industry has always been a very human one. Successful REALTORS must gain an understanding of people to make their real estate dreams come true. It’s the sort of business that perhaps doesn’t appear to lend itself to technology – the combination of a firm handshake, an understanding ear and honest, bespoke advice is difficult to create out of zeroes and ones. But while the real estate industry isn’t one that is a slave to technology, it can certainly be enhanced by it. Modern tech can make the process of matching property with a buyer and make it even more human than it already is, by providing insights and avenues that improve the quality of the realtor/buyer connection. How can you leverage technology when selling real estate? Let’s take a look at four of the most effective ways. 1. Be everywhere on social media Social media is proving to be an incredibly valuable tool for REALTORS. A visual medium designed to facilitate connections, the likes of Facebook, LinkedIn, and Instagram are right in the sweet spot of real estate professionals. The value of social media will entirely depend on how well you use it. There are several mistakes that many realtors make, and some opportunities that tend to be missed. To maximize the effectiveness of social media: Know your niche and talk specifically to that audience. Give them a reason to follow you by offering value – post tips and tricks, share helpful articles, and give them a reason to laugh every once in a … Read More
It’s that time of year again! Early in the year, inventory is low – but there’s no shortage of eager buyers looking to purchase a home. While an imbalance of supply versus demand is not uncommon in the greater San Francisco Bay Area, it’s especially acute early in 2020. New inventory is trickling onto the market, and it will continue to ramp up as we get into spring. But at the moment, there’s nowhere near enough new inventory to meet demand. Sellers with well-priced homes across the region are being rewarded with multiple offers from prospective purchasers. That is of course a wonderful situation for a seller – but it’s more like a nightmare for buyers. Many of these buyers will have been looking for months, even years, before they finally put an offer in on a property…only to find out that the seller has a number of competing offers to choose from. A buyer never knows how a seller will respond in a multiple offer situation. Will they accept just one offer from the “best” buyer? Will they make counter offers to specific buyers? Will they ask all buyers to respond with their “highest and best” offer, knowing that there are multiple offers on the table? What’s more, a seller can make different counter offers to different buyers, with different prices and terms. I’m helping clients manage a few multiple-offer situations at the moment, as listing agent and as buyer’s agent. Working with buyers in a multiple offer situation is especially fraught, because of course, … Read More
As you may have heard, I recently became a Broker Associate with Compass in Los Gatos (the former Alain Pinel REALTORS). There are a lot of benefits to working with a large, upscale brokerage – one of them being that you can get access to valuable information before the competition. Yesterday, our office had the first meeting of the year and it featured a feature presentation by Jordan Levine, the Deputy Chief Economist for the California Association of REALTORS. I have also seen many presentations by Jordan’s boss, Leslie Appleton-Young, and I even had her as a guest on an episode of the Bay to Bay Podcast. Jordan, by the way, is also a podcaster as he is the co-host of California Association of REALTORS Housing Matters podcast. Video of California Real Estate Forecast for 2020 The presentation was about 40 minutes long, as there was a lot to digest in there. The bottom line is that the 2020 real estate market is expected to look a lot like the 2019 real estate market: tight inventory, low interest rates, poor affordability, but with slightly more sales at somewhat higher prices (statewide, but the greater Bay Area should be an exception). Key Points for California’s 2020 Real Estate Forecast Housing prices may be up, but actual mortgage payments are down Lowest Unemployment in 50 Years Prices at the very high end softening, lower priced homes rising in price. Higher-end homes taking longer to sell U.S. 2020 GDP Projected @ 1.6% (down from 2.2% in 2019) U.S. Inflation … Read More
On October 18, 2019 I appeared on KSCO Radio in Santa Cruz as a guest on the Mike Young Radio Hour. Mike is a REALTOR I have known virtually my entire career in real estate. He has a weekly radio show and he usually has another Santa Cruz REALTOR, Dennis Casey, as his wingman. For the October 18 2019 airing, I was invited on as a guest to discuss the recently-enacted California AB1482 legislation, which establishes rent control state wide in California. We touched on a few other topics of interest to followers of Santa Cruz and California real estate as well – so if you want to learn more about AB1482 and rent control, please listen to the audio of the radio show below.
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
One of the most popular pages on my website in 2018 was an article where I addressed the perennial question, “Is it better to sell my home this year, or next?” In that posting, I opined that the preponderance of evidence is that 2018 was shaping up to be a pretty good year for home sellers. Today many sellers are wondering about selling a home in 2019 vs. 2020. In last year’s article, I said that given a choice, it would be better for homeowners to sell in 2018 rather than rolling the dice on 2019, as the economic forecast for 2019 was cloudy. Now that we’ve flipped the page into 2019, I can say it looks like the jury is in on this one: 2018 was the peak year for this real estate market cycle. The question before us today is, I think: will 2019 prove to be a good-but-not-great year for sellers – or will it be the year the market falls off a cliff, again? Why The Real Estate Market Has Gone Soft After much thought and analysis, it seems to me that the softening of appreciation in home prices is due to the market finally reaching the limit of affordability. In Santa Cruz county, only 12% of households can “afford” a median-priced home (with a 20% down payment). In Santa Clara county that number is 16%. In Monterey county, it’s 19%. It looks like what we’re seeing today simply comes down to the fact that buyers simply can’t afford to pay more … Read More