Will Fall Be a Seller’s Market?
In a recent HousingWire article, Fannie Mae’s chief economist stated “the wild card will be whether enough sellers enter the market to continue to meet the strong home-buying demand.” From a micro-economic standpoint, I’m seeing homes that show well and that are strategically priced are moving relatively quickly even though we’re battling a pandemic. Homebuyers are looking for space — both inside and outside — so they can work from home, accommodate distance learning, and comfortably shelter in place. Homes with ample room are very desirable.
Santa Clara County Single Family Homes
The median sales price for single-family homes in Santa Clara County rose from $1.22M (September 2019) to $1.41M in September 2020. We’ve seen an uptick in prices that are above asking (3%) and a reduction in the number of months to sell (1.2 from 1.9).
The following graph charts the median sale price compared to the median list price. With the exception of September 2019, sales prices are typically above the list price, and home values have recovered from Q1 levels. Overall, we’re seeing resilience in the single-family home market despite the pandemic challenges.
Santa Clara County Townhomes & Condos
Comparing Median Sales Price from September 2019 to September 2020, Santa Clara County condos dropped $40,000 even though it took 10 fewer days to sell (41 avg Days on Market vs. 31 days) and approximately 100 more condos were sold in the same period. Active inventory in September 2020 is slightly above the 600 mark, an increase from May’s 480.
2021 Housing Forecast
It’s that time… for predictions of what’s to come in the new year. The California Association of Realtors released their housing and economic forecast. Here are the highlights:
- Low mortgage rates and pent-up demand for homeownership will bolster California sales in 2021.
- Economic uncertainty caused by Covid-19 and inventory shortage will limit sales growth. Modest sales increases — around 3.3% — are projected.
- California’s median home prices are expected to rise by 1.3% compared to 2020’s 8.1%.
While home prices rose sharply in 2020, driven by strong sales of higher-priced properties and a limited inventory of homes for sale, the pace of price growth will be more moderate in the coming year. The uncertainty about the pandemic, sluggish economic growth, a rise in foreclosures, and the volatility of the stock market are all unknown factors that could keep prices in check and prevent the statewide median price from rising too fast in the upcoming year. ~ Leslie Appleton-Young, Senior Vice President and Chief Economist
Return to Normal Unlikely Before 2022
In May, FiveThirtyEight — a website that focuses on opinion poll analysis, politics, and economics — kicked off a biweekly survey in partnership with the University of Chicago Booth School of Business. In the latest round of the survey (conducted from October 9 through 12), the responding economists collectively thought there was a 66% probability that the economy won’t truly be back to normal until 2022 or later. While that figure is not particularly optimistic, they were slightly more hopeful regarding unemployment, expecting the rate to drop from 7.9% to 7.4% by year’s end.
Some Fall Fun… Sereno’s Halloween Coloring Contest
Santa Clara County officials consider trick-or-treating and public gatherings as high-risk activities. While that may be disappointing for your little ones, Sereno Group is lifting ghostly spirits and celebrating with a Coloring Contest. Download your favorite picture, have your favorite artist color their masterpieces, and upload to Instagram and tag @serenogroup. Entries have a chance to be featured. Boo-tiful!
Reach Out & Connect
I’m meeting with clients via phone, video conferencing, and by appointment. Whether you’re looking to buy or sell, you need an experienced guide in this complex and fast-paced real estate market. I’ve helped hundreds of individuals like you successfully negotiate the most important financial transaction you’ll ever make.