The official real estate sales numbers are in. And 2017 was another superb year for real property appreciation in our area. How good? Very. Let’s look at the statistics more closely.
RECORD HIGHS DRIVEN BY LOW INVENTORY
The median sales price for a single-family home in Santa Clara County hit another new record in 2017: $1,171,753. That’s 15.44% ($1,015,000) over 2016. Prices for townhomes and condos enjoyed 10.61% appreciation. Yet there’s more to the story.
- Days on Market dropped nearly a week – from 27 to 21 days — showing that buyers respond quickly to new listings and escrows are short.
- Sales Price versus Listing Price jumped to 106.0% from 102.8%. This ratio is the highest in a decade.
- Neighborhoods like Campbell, Cambrian and Willow Glen are rising stars, with sales price over asking at 106.1%, 108.4%, and 104.3% respectively.
SILICON VALLEY IS A PREMIER MARKET
In a January 19, 2018 article, The Mercury News reported that the Bay Area real estate market now has several distinctions:
- The highest income requirement among the nation’s metro areas. To buy a median-priced home in the San Jose metro, buyers must earn $216,181 to qualify.
- Zillow’s 2018 forecast predicts that Santa Clara and San Benito Counties will be the nation’s hottest market.
68.5% of homes sold in the San Jose metro area went for more than the listing price. The median amount paid above list was $41,000 or 6%. - Job growth, especially in the tech sector, is fueling buyers willing to pay over asking price. The unemployment rate in the San Jose-Sunnyvale-Santa Clara MSA was 2.7% compared to an unadjusted rate of 4.2% for California and 3.9% for the U.S.
2018 FORECASTS
According to California Association of Realtors’ Chief Economist, Leslie Appleton-Young, there are several factors to keep an eye through 2018:
- Consumer confidence is still high. In January, this index was 125.4, up slightly from December’s 123.1.
- The unemployment rate is low, putting pressure on labor markets and pushing up wages to attract talent.
California job growth is slowing. At 1.6% growth, it is slightly higher than the 1.4% national figure. - There’s lots of uncertainty. The impact of the recent tax reform is yet to be seen, especially on how consumers feel about the cost of homeownership. For first-time buyers, the benefit between owning versus renting has narrowed.
- Housing inventory is low, fueled by homeowners not selling but leasing their property.
- Sellers aren’t moving as often as before due to concerns about capital gains, low property taxes, low rates on current mortgage, and affordability of purchasing elsewhere. 20% of sellers are moving out of their county, while 28% are moving out of California.
- The percentage of international buyers dropped to 3% from a high of 8% in 2013.
- All-cash buyers represented 22% of the market; this percentage has held relatively steady since 2014.
IF YOU’RE READY TO SELL
We’ve had consecutive growth year-over-year since 2012. If you’re ready to make a move, now is an excellent time. If you have questions about the sales trends for your neighborhood and how they affect your property, please reach out to me.