Market update provided by Wendi-Mae Davis Broker Associate/Real Estate Counselor at Connect Realty, Director of the California Association of Realtors (CAR), and Vice Chair Land Use/Environmental Committee
In a nutshell, market conditions in Santa Clara County (inventory, sales and DUI) continue to improve. Inventory is 146% of the 8-year average. That is down from 220% at the end of 2007. Offers initiated have increased from the 55% range to 114%. The volume of initiated sales has stayed above 100% since August 9th. There are a still larger than normal number of transactions that are failing to close. Consequently, closings are still only at 80% of normal in Santa Clara County. DUI has dropped 310% of normal at the end of January to only 114% of normal. A first level corrected DUI to compensate for the higher than normal failure rate would increase DUI to about 130% of normal.
Remember a lower DUI is good and 100% would be a normal market. Despite this continued improvement, DUI remains above 90 days. That is high enough that we expect prices to continue to decline in those areas.
The Santa Clara County wide median prices are currently being hard hit. SCC median Sold price has dropped $200K in the last year. Much of this is the real estate market mix returning to more typical levels. This can be seen in part with the low priced homes having a lower DUI than high priced homes.
In 2007, we maintained that much of the $100K median Sold price increase was a shift in market mix. The second $100K drop is property values. This can be seen by noticing that on October 6, 2007 there were only 7 SFR sales under $450,000 in the previous 5-weeks. Now there are 24 SFR sales under $250,000.
It has been the lower-end that has been the most negatively impacted. The media has historically focused on year over year pricing and we expect this “negative” new will depress the market some more.