October 2017 newsletter

See what’s happening in local real estate now, with plenty of charts for the analytical types and plain explanations for everyone else, covering recent real estate trends from Burlingame to the South Bay.  Find out what’s hot and not. Offering hand-crafted and carefully charted statistics you won’t find anywhere else, now expanded to show recent trends for these ten local sub-markets (see end of newsletter for definitions of sub-markets and methodology):

  • mid-Peninsula top-end single-family residences (SFR)
  • mid-Peninsula midrange SFR
  • San Mateo and Burlingame upper midrange SFR
  • South Bay upper midrange SFR
  • San Mateo and Burlingame midrange SFR
  • mid-Peninsula townhomes
  • mid-Peninsula condos
  • South Bay midrange SFR
  • South Bay condos and townhouses
  • mid-Peninsula affordable SFR

And including seven leading indicators for the Silicon Valley housing market.

First, this month’s summary:  This month isn’t last month, but that’s not unusual:  the pace of local real estate changes from month to month, week to week and even day to day.  August’s frenzied pace was unsustainable, and September dialed us back to the usual dull roar.  It’s hard to believe that at this time last year the market was stalling–or at least stalling as much as Silicon Valley real estate ever does when the local economy is healthy.  Open houses at entry-level price points are crammed, and I’ve heard reports of 100, 200 or even more attendees through in a single afternoon.  How many are real buyers is anyone’s guess, but we know this:  the Valley housing market isn’t suffering from lack of attention.  This boom is mature, but it’s aging well. 

Next, a look at the month-over-month trend in sales prices per sq.ft.:

 

Next, for historical context, a comparison of sales price per square foot  between September 2012, 2016 and 2017:

 

Next, seven leading  indicators for the Silicon Valley housing market.

indicator one-year trend short-term trend effect on real estate
San Mateo County unemployment       flat        flat  meh
Santa Clara County unemployment     down        up  meh
Silicon Valley VC Index   Q2 2017     down      down  bad
30-year fixed mortgage rate       up        up depends on price range and area
NASDAQ Composite       up        up  good
Bloomberg Silicon Valley index       up        up  good
Silicon Valley 150 stock index       up        up  good

And finally, a more in-depth look at what’s hot and not in  local real estate, using the month-over-month trend in real estate’s two most  reliable indicators:

  • absorption: sales divided by inventory; shown on the charts below on the left X axis, a high or rising absorption rate favors sellers, while a low or declining rate favors buyers, and
  • days on market (DOM): the average number of days before homes go into contract; shown on the right X axis, a high or rising days on market favors buyers, a low or declining DOM, sellers.

mid-Peninsula top-end  single-family residences (SFR):

hot or not?

13-month trend 1-month trend
                         warm        warming      warming

mid-Peninsula midrange SFR:

hot or not?

13-month trend 1-month trend
                       red hot       warming        mixed

San Mateo and Burlingame upper midrange SFR:

hot or not?

13-month trend 1-month trend
                           hot         mixed       cooling

South Bay upper midrange SFR:

hot or not?

13-month trend 1-month trend
                  beyond red hot        warming       mixed

San Mateo and Burlingame midrange SFR:

hot or not?

13-month trend 1-month trend
                           hot        warming        mixed

mid-Peninsula townhomes:

hot or not?

13-month trend 1-month trend
                        red hot        warming        mixed

mid-Peninsula condos:

 

hot or not?

13-month trend 1-month trend
                          hot        warming        mixed

South Bay midrange SFR:

 

hot or not?

13-month trend 1-month trend
                        red hot       warming        cooling

South Bay condos and townhomes:

 

hot or not?

13-month trend 1-month trend
                       red hot       warming       mixed

mid-Peninsula affordable SFR:

 

hot or not?

13-month trend 1-month trend
                          hot       warming       cooling

Local sub-markets: Mid-Peninsula top-end SFR:  Homes 2001 sq.ft. or more in top-end Menlo Park, Palo Alto, Woodside and Portola Valley; Los Altos; Los Altos Hills; and Atherton. Mid-Peninsula midrange  SFR:  Homes 2000 sq.ft. or less in entry-level neighborhoods of Palo Alto and Menlo Park; all of Mountain View; and Redwood City and San Carlos west of El Camino. San Mateo and Burlingame upper  midrange SFR:  Homes in the Aragon, Baywood and San Mateo Park neighborhoods of San Mateo, plus Burlingame west of El Camino. South Bay upper midrange SFR:   Homes in Cupertino, plus the neighborhoods of Sunnyvale, Saratoga, San Jose and Santa Clara with Cupertino schools. San Mateo and Burlingame midrange SFR:  Homes in San Mateo neighborhoods west of El Camino (except Aragon, Baywood and San Mateo Park) and Burlingame neighborhoods east of El Camino. Mid-Peninsula townhouses:  Two-plus level CID (Common Interest Development) 2000 sq.ft. or less in Los Altos, Menlo Park, Mountain View, Palo Alto, Redwood City, Redwood  Shores and Sunnyvale. Mid-Peninsula  condos:  Single-level CID (Common Interest Development) 2000 sq.ft. or less in the same cities. South Bay midrange SFR:  Homes in Campbell and adjacent San Jose neighborhoods (MLS Area 15) and the Cambrian area of San Jose (Area 14). South Bay condos and townhomes:  Homes in Campbell and adjacent San Jose, Cambrian and Santa Clara. Mid-Peninsula affordable  SFR (Single-Family Residences):  Homes at least twenty years old in East  Palo Alto east and west of 101; Menlo Park east of 101 (Belle Haven); Redwood  City, San Carlos and Belmont east of El Camino; and San Mateo neighborhoods east of 101, plus MLS area 416 Bowie Estate west of 101 but east of El Camino. South Bay affordable SFR:   (Discontinued due to changes in the MLS.)  Homes in Central (downtown) San Jose (MLS Area 9) except Rose Garden and Naglee Park. Methodology:  For sales price per square foot, a rolling three-month average to minimize statistically irrelevant differences from month to month yet capture the overall trend; then adjusted to the average size of the last 1000 homes sold to minimize distortions in sales price due to variations in average property size sold for each period.   For days on market, a rolling three-month average.  For absorption, the one month average.  Thinking of buying or selling? Please contact me at jfyten@cbnorcal.com.  This is not a solicitation if your home is listed with another broker.  My Bureau of Real Estate license number is 01044243. copyright © John Fyten 2017

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