Business
Welcome to our newest episode of the Silicon Valley Real Estate Market Report, where we discuss the latest trends and events that will help you make better decisions about buying, selling or investing in homes here in Silicon Valley and beyond.What I want to talk to you about today is the perception of the current real estate market conditions. Recently, sitting with a new buyer client, I was surprised by his question – the market is down by 40%, what should I do? Is now the right time to buy?The 40% number WAS and still IS absolutely out of range comparing with our data and our understanding of the current market. Where did it come from? I started checking some of the individual cities looking for the large price swings and found one – Los Altos Hills October median sale price dropped by 42% comparing with October of 2018 and 29% comparing with September of this year. If you take data at the face value, it is a complete reversal of the recent market trends.But how meaningful is this data? There was only 1 sale in Los Altos Hills this October, 3 sales in October of 2019 and 8 homes were sold a month earlier in September. With so few homes changing hands in a city with a huge range of unique properties it is not surprising to see dramatic median sales price changes month over month.We are seeing similar wild price swings in other low volume markets. In Atherton, e.g, October median sales prices dropped by 47% from the peak reached earlier in the year in May, 11 and 9 homes sold respectively. These uncharacteristically large price changes are great for the news headlines, but the market reality is much less attention grabbing. To detect emerging market trends and get meaningful statistics we look at larger data samples like counties or accumulate data quarterly.Santa Clara County prices now are down by about 6% year to date comparing with the last year and San Mateo County prices decreased by only 1.4%. The market is going through an adjustment after seven years of consecutive growth, but it is not a dramatic shift we remember from the last recession.With inventories continuing being low, it is still hard to find the right home. Trying to time the market in addition to finding the right property is almost impossible – you can’t day-trade real estate. Silicon Valley and the Bay Area overall have a long history of property values appreciation driven by economic growth and on-going housing shortages.Everywhere up and down the Peninsula the prices more than doubled since 2009, the bottom the last recession. If you plan on staying in your home for 5, 7 or more years, the time to buy is NOW! Any market adjustment, like the one we are experiencing now will be, most likely, overshadowed by the home value growth of the years to come. This is Michael Talis with the Talis Team. Call us at 650.766.6100 so we can answer all your questions. Check our web site at talisteam.com and if you like what you hear, don’t forget to like, review and share.