See how local real estate is doing now.

January 2011 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:

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 townhomes
mid-Peninsula affordable SFR
South Bay affordable SFR

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

First, this month's summary: I said December would be slow, and it was—except mine, which for some reason careened through the holidays at breakneck speed. But in general local real estate was so slow that even the few sub-markets that had been robust throughout the year went into a state of suspended animation. After a month like December 2010 you look for moral victories, and you don't have to look hard. Despite weak demand through much of 2010, sales price per square foot at the top end remains about where it was at this time last year, and is just slightly lower at the lower end. This remarkable statistic suggests two things. First, distressed sellers are relatively rare here, and I include banks in this generalization, since I'm beginning to think that they're the least-distressed of all sellers (of all time). Second, what we call a slow market would be hyper-active in most parts of the country, and its pace seems fast enough to keep us bumping along toward eventual recovery. Will that happen this spring? I'm skeptical, but I still think things will get pretty lively in a month or two.

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 December 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	up	up	good
Silicon Valley VC Index	up	up	good
30-year fixed mortgage rate	down	down	good
NASDAQ Composite	up	up	good
Bloomberg Silicon Valley 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
so not	mixed	cooling

mid-Peninsula midrange SFR:

hot or not?	13-month trend	1-month trend
cool	mixed	cooling

San Mateo and Burlingame upper midrange SFR:

hot or not?	13-month trend	1-month trend
not	mixed	mixed

South Bay upper midrange SFR:

hot or not?	13-month trend	1-month trend
cool	warming	mixed

San Mateo and Burlingame midrange SFR:

hot or not?	13-month trend	1-month trend
cool	mixed	cooling

mid-Peninsula townhomes:

hot or not?	13-month trend	1-month trend
cool	warming	mixed

mid-Peninsula condos:

hot or not?	13-month trend	1-month trend
so not	mixed	warming

South Bay midrange SFR:

hot or not?	13-month trend	1-month trend
cool	cooling	cooling

South Bay condos and townhomes:

hot or not?	13-month trend	1-month trend
so not	cooling	cooling

mid-Peninsula affordable SFR:

hot or not?	13-month trend	1-month trend
cool	cooling	mixed

South Bay affordable SFR:

hot or not?	13-month trend	1-month trend
cool	cooling	mixed

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: 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.