If, last fall, I had told my clients looking for homes in the wonderful mid-Peninsula city of Wonderfulville that prices would go up 10 percent as soon as January 1 rolled around, they would have been…skeptical. And I would have understood their…skepticism. But I would have been right.
Wonderfulville has been hot hot hot, more often than not, since at least 1998. In fact, back in 2010, when home prices were still declining in communities of lesser wonderfulness, Wonderfulville homes were selling with multiple offers. It was hard buying a Wonderfulville home back then. It was even harder last year. It’s even harder today.
The election was a major distraction, but once over, even people who didn’t like the result decided to get on with their lives. Uncertainty still exists, but I’ve found that Silicon Valley buyers are, in general, remarkably optimistic. I don’t know if it’s the job opportunities or the weather that’s responsible for this cheerfulness–or maybe you need a lifetime of positive attitude just to get an invite to Silicon Valley these days.
Then there’s an idea going around that even more tech money will flood Silicon Valley real estate in 2017. According to Reuters, “between 30 to 45 venture capital-backed technology companies could go public in 2017, compared to 15 in 2016”. Personally, I think the direct effect of IPOs on Silicon Valley home prices is overrated, but if enough buyers believe it has an effect, it’ll have one.
Whatever the reason, I sense more urgency this year than last. Minor, and even major, flaws in homes aren’t holding buyers back. It’s just that homes with minor flaws are getting more interest than homes with, say, a weird floor plan or a location problem. The desire to put down roots here is still strong, and there are still people who can afford to do so. I’ve been saying this for years and, with luck and regular exercise, I’ll be saying this for years to come.
So did I tell my clients that prices would go up? In my December newsletter I opined that “strong activity this late in the year, plus local economic data and the stock market’s heightened confidence since the election suggest an even stronger spring”.
copyright © John Fyten 2017