“As January goes, so goes the rest of the year.” If that’s correct, we’re in for a heck of a 2013. In all the markets I track, this January was stronger, and usually far stronger, than last. Open house attendance, and anecdotal reports of sales prices of transactions not yet closed, all suggest that this year may be even harder on buyers than 2012. What’s the fuel for this conflagration? Interest rates? Yes. Foreign investment? Yes. Stock market wealth? Yes. Fear of getting priced out of the market? That too. But also moms and dads looking for a place to raise a family. And singles looking for a place to settle down. Strip the hype, suspicion and resentment from this boom and it’s exactly what you’d expect from a real estate market where great wealth, surging confidence, normal social patterns and lack of buildable land all meet in one great resounding collision. Is it sustainable? No boom lasts forever, but betting against previous booms has been a bet against the durability of middle-class Silicon Valley and human nature. From what I’ve seen, that’s not a bet I’d care to make.
Next, a look at the month-over-month trend in sales prices per square foot:
Next, for historical context, a comparison of sales price per square foot between January 2008, 2012 and 2013:
copyright © John Fyten 2013