What I'm seeing in the market these days.....
We’ve had tremendous housing price growth throughout the Bay Area over the last seven years and especially over the last year, but when will it level off? Well, maybe it is starting, but only for a certain type of real estate. I’ve been consistently touring and showing properties from Sunnyvale through San Carlos and am starting to see a pattern of changes in the local real estate market that I thought I’d share with you.
When the market is white hot with low inventory and a large pool of buyers, everything sells - properties with noise issues, on the railroad tracks, homes needing major repairs, having mediocre school districts, etc. What I’m seeing right now is a softening at the edges of the market. Buyers at certain price points are starting to quickly become more selective now that they have more choices. What still holds true though, is if a house is in good condition, has no noise or layout problems, decent schools and most importantly, is priced right, it’s still a HOT market with multiple over bids, some cash buyers (though not as many) and those houses move quickly. Overall, the housing market is still strong. But, there is another side to the market that is starting to emerge- many non-ideal properties are sitting for over 20 days. This can be the first indicator of a market in transition.
Sunnyvale, one of the hottest markets in the Bay Area, currently has 75 active properties for sale and almost 30 of those have been on the market for over 20 days. We haven’t seen this level of inventory in Sunnyvale in almost 2 years and definitely have not seen 30 units sitting in a long time. Why are some properties sitting? Whether it’s Sunnyvale or Redwood City, the answer is the same- it’s either condition, location or most importantly, price. Additionally, some sellers with non-ideal properties are expecting the same jaw dropping overbids that prime locations have garnered. On these properties, we’re finally starting to see prices level off as sellers come to terms with a changing market. A common recent scenario is that a property comes on the market with some flaws and the seller sets an optimistic sales price. Come bid day, there are no bids as buyers know that sellers want bids over asking. A couple of weeks go by and the seller lowers the price which now generates activity and the house sells for near the original asking price. If you’re in the market to buy, this can be an interesting time and if you’re looking to sell, make sure you understand the current trends in your neighborhood and how your property fits in.
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Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.