August 2010 newsletter
See how local real estate is doing now.
Now simplified and expanded, with plenty of charts for the analytical types and plain explanations for everyone else, and broadened geographically to cover recent real estate trends from Burlingame to the South Bay. Find out what's hot and not in local real estate.
Still offering hand-crafted and carefully charted statistics you won't find anywhere else, now expanded to show recent trends for these eleven local sub-markets:
And now including seven leading indicators for the Silicon Valley housing market.
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First, this month's summary: I said wow! in June and I'll say wow! again. You may have heard that July was a "brutal" month for Bay Area real estate, and for once the media got it right—mostly. Even mid-Peninsula and South Bay markets that were scorching hot have cooled significantly this summer. On the bright side, the news isn't all bad, and the slowdown isn't entirely unexpected: local real estate does taper off over the summer. Prices in most ranges were essentially flat, and activity in a few markets actually rebounded off June lows. What's happened to the midrange and top end since June can be partly and even completely explained by buyers at the beach rather than open houses, but it's a bit alarming to see how demand for affordable homes evaporated in May, and how poorly the lower price ranges did this July compared to last. Maybe that tax credit really did compress months of first-time buyer activity into one or two. August, usually the doldrums, will probably be more of the same or worse, but we'll get a better read on where real estate is going in September, when the market traditionally gets its second wind. |
Next, a look at the 13-month trend in sales prices per square foot:
Next, for historical context, a comparison of sales price per square foot between July 2005, 2009 and 2010:
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 | up | up | bad |
| Santa Clara County unemployment | down | up | bad |
| local business confidence | down | up | good |
| Silicon Valley VC Index | up | down | bad |
| 30-year fixed mortgage rate | down | down | good |
| NASDAQ Composite | up | down | bad |
| Bloomberg Silicon Valley index | up | down | bad |
And finally, a more in-depth look at what's hot and not in local real estate, looking at the 13-month trend in real estate's two most reliable indicators:
mid-Peninsula top-end single-family residences (SFR):
|
hot or not? |
13-month trend | 1-month trend |
| so not | thawing | cooling |
|
hot or not? |
13-month trend | 1-month trend |
| cool | warming | mixed |
San Mateo and Burlingame upper midrange SFR:
|
hot or not? |
13-month trend | 1-month trend |
| not | warming | warming |
|
hot or not? |
13-month trend | 1-month trend |
| cool | warming | warming |
San Mateo and Burlingame midrange SFR:
|
hot or not? |
13-month trend | 1-month trend |
| cool | mixed | mixed |
|
hot or not? |
13-month trend | 1-month trend |
| cold | mixed | mixed |
|
hot or not? |
13-month trend | 1-month trend |
| not | cooling | mixed |
|
hot or not? |
13-month trend | 1-month trend |
| cold | cooing | cooling |
South Bay condos and townhomes:
|
hot or not? |
13-month trend | 1-month trend |
| not | mixed | mixed |
|
hot or not? |
13-month trend | 1-month trend |
| cold | mixed | mixed |
|
hot or not? |
13-month trend | 1-month trend |
| warm | warming | mixed |
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: Homes in Central (downtown) San Jose (MLS Area 9) except Rose Garden.
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. All sales except short sales are included.
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 Department of Real Estate license number is 01044243.