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John Fyten's Blog

By John Fyten | Agent in Palo Alto, CA

July 2014 newsletter.


See what's happening in local real estate now, with plenty of charts for the analytical types and plain explanations for everyone else, covering recent real estate trends from Burlingame to the South Bay.  Find out what's hot and not.

Offering hand-crafted and carefully charted statistics you won't find anywhere else, now expanded to show recent trends for these ten local sub-markets (see end of newsletter for definitions of sub-markets and methodology):

  • mid-Peninsula top-end single-family residences (SFR)
  • mid-Peninsula midrange SFR
  • San Mateo and Burlingame upper midrange SFR
  • South Bay upper midrange SFR
  • San Mateo and Burlingame midrange SFR
  • mid-Peninsula townhomes
  • mid-Peninsula condos
  • South Bay midrange SFR
  • South Bay condos and townhouses
  • mid-Peninsula affordable SFR

And including eight leading indicators for the Silicon Valley housing market.

First, this month's summary:  Silicon Valley real estate collapses!  But seriously, folks, doesn't the real estate market seem slow to you?  It sure seems slow to me.  Yet the charts say activity is as strong or stronger in most cases than it was at this time last year.  I guess when you're used to going 120 miles per hour, 100 feels slow.  Home prices have flattened or even declined in many neighborhoods lately, making this a good time to either a) buy a house, or b) wait nervously for home prices to decline even further.  If I was a betting man, I'd bet that a) is the correct answer.  It feels like we're seeing a gradual return to a normal boom market, which is the mode Silicon Valley real estate has been in for much of the sixteen years I've been selling homes.  In that market, prices flatten or even dip when so many buyers are sidetracked by summer vacation.  What puzzles me is that the pace is still breakneck, with plenty of buyers fueling plenty of market activity, even as the rest of them rent castles in Tuscany.  

Next,  a look at the month-over-month trend in sales prices per square ft. 

Next, for historical context, a comparison of sales price per square foot  between June 2009, 2013 and 2014:

Next, eight leading  indicators for the Silicon Valley housing market.

indicatorone-year trendshort-term trendeffect on real estate
San Mateo County unemployment    down    down   good
Santa Clara County unemployment    down    down   good
local business confidence Q3 2012    up    down    bad
Silicon Valley VC Index   Q1 2014    up    up    good
30-year fixed mortgage rate   down    downdepends on price range and area
NASDAQ Composite    up    up    good
Bloomberg Silicon Valley index    up    up    good
Silicon Valley 150 stock index    up    up    good

And finally, a more in-depth look at what's hot and not in  local real estate, using the month-over-month trend in real estate's two most  reliable indicators:

  • absorption: sales divided by inventory; shown on the charts below on the left X axis, a high or rising absorption rate favors sellers, while a low or declining rate favors buyers, and
  • days on market (DOM): the average number of days before homes go into contract; shown on the right X axis, a high or rising days on market favors buyers, a low or declining DOM, sellers.

mid-Peninsula top-end  single-family residences (SFR):

news714topendSFR

hot or not?

13-month trend1-month trend
      hot    warming  mixed

mid-Peninsula midrange SFR:

news714midPenmidrange

hot or not?

13-month trend1-month trend
hot       warming       mixed

San Mateo and Burlingame upper midrange SFR:

news714uppermidSMBG

hot or not?

13-month trend1-month trend
 hot    mixed  warming

South Bay upper midrange SFR:

news714upperSB

hot or not?

13-month trend1-month trend
   red hot    warming   mixed

San Mateo and Burlingame midrange SFR:

news714midSMBG

hot or not?

13-month trend1-month trend
     hot   warming   mixed

mid-Peninsula townhomes:

news714midPentownhomes

hot or not?

13-month trend1-month trend
   red hot   warming  warming

mid-Peninsula condos:

news714midPencondos

hot or not?

13-month trend1-month trend
   red hot   warming   mixed

South Bay midrange SFR:

news714midrangeSB

hot or not?

13-month trend1-month trend
   red hot   warming    mixed

South Bay condos and townhomes:

news714SBCID

hot or not?

13-month trend1-month trend
   red hot   warming  mixed

mid-Peninsula affordable SFR:

news714affordablemidPen

hot or not?

13-month trend1-month trend
    warm     mixed   cooling

Local sub-markets:

Mid-Peninsula top-end SFR:  Homes 2001 sq.ft. or more in top-end Menlo Park, Palo Alto, Woodside and Portola Valley; Los Altos; Los Altos Hills; and Atherton.

Mid-Peninsula midrange  SFR:  Homes 2000 sq.ft. or less in entry-level neighborhoods of Palo Alto and Menlo Park; all of Mountain View; and Redwood City and San Carlos west of El Camino.

San Mateo and Burlingame upper  midrange SFR:  Homes in the Aragon, Baywood and San Mateo Park neighborhoods of San Mateo, plus Burlingame west of El Camino.

South Bay upper midrange SFR:   Homes in Cupertino, plus the neighborhoods of Sunnyvale, Saratoga, San Jose and Santa Clara with Cupertino schools.

San Mateo and Burlingame  midrange SFR:  Homes in San Mateo neighborhoods west of El Camino (except Aragon, Baywood and San Mateo Park) and Burlingame neighborhoods east of El Camino.

Mid-Peninsula  townhouses:  Two-plus level CID (Common Interest Development) 2000 sq.ft. or less in Los Altos, Menlo Park, Mountain View, Palo Alto, Redwood City, Redwood  Shores and Sunnyvale.

Mid-Peninsula  condos:  Single-level CID (Common Interest Development) 2000 sq.ft. or less in the same cities.

South Bay midrange SFR:  Homes in Campbell and adjacent San Jose neighborhoods (MLS Area 15) and the Cambrian area of San Jose (Area 14).

South Bay condos and townhomes:  Homes in Campbell and adjacent San Jose, Cambrian and Santa Clara.

Mid-Peninsula affordable  SFR (Single-Family Residences):  Homes at least twenty years old in East  Palo Alto east and west of 101; Menlo Park east of 101 (Belle Haven); Redwood  City, San Carlos and Belmont east of El Camino; and San Mateo neighborhoods east of 101, plus MLS area 416 Bowie Estate west of 101 but east of El Camino.

South Bay affordable SFR:   (Discontinued due to changes in the MLS.)  Homes in Central (downtown) San Jose (MLS Area 9) except Rose Garden and Naglee Park.

Methodology:  For sales price per square foot, a rolling three-month average to minimize statistically irrelevant differences from month to month yet capture the overall trend; then adjusted to the average size of the last 1000 homes sold to minimize distortions in sales price due to variations in average property size sold for each period.   For days on market, a rolling three-month average.  For absorption, the one month average.  All sales except short sales are included.

Thinking of buying or selling? Please contact me at jfyten@cbnorcal.com.  This is not a solicitation if your home is listed with another broker.  My Bureau of Real Estate license number is 01044243.

More from JohnFyten.com, Silicon Valley Real Estate Explained (TM).

copyright © John Fyten  2014

 
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