January 2013 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 eight leading indicators for the Silicon Valley housing market.
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First, this month's summary: Believe it or not, we may be looking at the launching pad for a Spring 2013 that makes Spring 2012 look almost tame. Barring a sudden injection of truly humongous uncertainty—because it looks like we've learned to live with merely major uncertainty—all signs point toward a spring at least as robust as last. Most of the markets I track barely slowed for the holidays, and a few got even hotter! Are there any warning signs on the horizon? Yes, some buyers are already leaving the market, but booms always have a high attrition rate, and the open houses tell us that others are stepping forward. Will this boom go on forever? No, but history suggests that by the time it fizzles this area will be even more expensive, even after the usual price correction. The appreciation of the first few years of the up-cycle has generally been durable, and it's why homes cost so much more now than they did ten or twenty years ago. The heightened level of market activity I see indicates that many of us get that. |
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 2007, 2011 and 2012:
Next, eight leading indicators for the Silicon Valley housing market.
| indicator | one-year trend | short-term trend | effect on real estate |
| San Mateo County unemployment | down | down | good |
| Santa Clara County unemployment | down | down | good |
| local business confidence | up | down | bad |
| Silicon Valley VC Index | up | up | good |
| 30-year fixed mortgage rate | down | down | like gasoline on a fire |
| NASDAQ Composite | up | up | good |
| Bloomberg Silicon Valley index | up | down | bad |
| Silicon Valley 150 stock index | up | down | bad |
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:
mid-Peninsula top-end single-family residences (SFR):
|
hot or not? |
13-month trend | 1-month trend |
| cool | warming | cooling |
|
hot or not? |
13-month trend | 1-month trend |
| hot | warming | cooling |
San Mateo and Burlingame upper midrange SFR:
|
hot or not? |
13-month trend | 1-month trend |
| warm | warming | cooling |
|
hot or not? |
13-month trend | 1-month trend |
| red hot | warming | mixed |
San Mateo and Burlingame midrange SFR:
|
hot or not? |
13-month trend | 1-month trend |
| hot | warming | mixed |
|
hot or not? |
13-month trend | 1-month trend |
| red hot | warming | warming |
|
hot or not? |
13-month trend | 1-month trend |
| red hot | warming | mixed |
|
hot or not? |
13-month trend | 1-month trend |
| red hot | warming | warming |
South Bay condos and townhomes:
|
hot or not? |
13-month trend | 1-month trend |
| red hot | warming | cooling |
|
hot or not? |
13-month trend | 1-month trend |
| hot | warming | cooling |
|
hot or not? |
13-month trend | 1-month trend |
| hot | warming | warming |
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 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. 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.