In the heart of Silicon Valley, summer home sales keep going up despite sharp drop in listings

Real estate markets traditionally suffer from the summertime blahs.

But the Silicon Valley market is not a normal market, particularly in Santa Clara County.

Yesterday’s monthly report from the CoreLogic real estate information service showed July sales down across the Bay Area, but up 13.0 percent in Santa Clara County from the year before. That was despite the fact that inventory in the county has been down about 30 percent from the same period in 2016. So how are sales increasing?

Andrew LePage, a research analyst for CoreLogic, guessed why: “Buyers are burning through whatever inventory there is, really fast.”

The median price of a single-family home in July was $1,097,000, a hair under the county’s all-time high of $1,100,000.

We spoke with Alex Seroff, an agent with DeLeon Realty in Palo Alto, who dug further into the numbers to flesh out the Santa Clara County phenomenon.

Drawing his figures from the Multiple Listing Service, Seroff looked at active listings, median prices for single family homes, and median prices per square foot in five cities: Sunnyvale, Mountain View, Palo Alto, Los Altos and Los Altos Hills.

“Typically you’d see less buyers on the market and prices would stay flatish over the summer,” he said. “But here we saw the median price go up in each of those five cities because the demand is just increasing.”

First, he computed the change in active listings from July to August (through Aug. 29): down 37 percent in Sunnyvale; down 8.0 percent in Mountain View; down 24 percent in Palo Alto; and down 20 percent in Los Altos. Los Altos Hills’s inventory actually went up 6 percent, though the statistical sample was tiny — the number of listings increased from 31 to 33.

“Inventory is now so low that trying to derive meaningful statistics is challenging,” Seroff said. “The sample sizes are so small.”

Still, it’s at least somewhat telling that the month-over-month prices in the five cities went up between July and August, when the market is typically flat.

Here are the August prices per square foot: Sunnyvale, up 7.0 percent month-over-month to $1,000; Mountain View, up 1.6 percent to $1,081; Palo Alto, up 5.8 percent to $1,528; Los Altos, up 4 percent to $1,293; and Los Altos Hills, up 8.7 percent to $1,431.

And here are the month-over-month August numbers for the median price of a single-family home: Sunnyvale, up 3.5 percent to $1.37 million; Mountain View, up 17 percent to $1.70 million; Palo Alto, up 3.2 percent to $2.69 million; Los Altos, up 5.4 percent to $2.95 million; and Los Altos Hills, up 4.4 percent to $4.07 million.

“Anecdotally, I haven’t heard anyone arguing that the market is cooling here,” Seroff said. “Sellers are still emboldened and expect high prices and buyers are still very motivated and willing to do what it takes to get houses.”

Photo: House at 631 Torwood Lane in North Los Altos is on the market, listing for $2,798,000 (Courtesy/Anthony Halawa and DeLeon Realty)

 

 

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  • hoapres

    If you don’t yet own a house and want one then you might have to move OUT of Silicon Valley.

  • hoapres

    This is news ??

    Let’s see.

    We don’t build single family homes anymore and more people want them.

    The price goes up.

    We don’t have much empty land to build on in Silicon Valley and the little that exists is being used to build mostly apartments and condos.

    If this sounds simplistic then well sometimes life is that simple.

  • Sam

    I am in the market and my unscientific conclusion from the open houses I attend is that there is still a fair bit amount of foreign interest (eastern euro and China). If these are investment properties for them, they are actually making it difficult for citizens/permanent residents.

    I wish we could put in a tax for these foreign investors so that we (people who work here and call the US home) have a shot at buying a home. The sellers won’t be happy as there would be a price drop, but with these taxes we can help the true buyers and cities and counties at the same time.

    • hoapres

      It’s all cash when it comes to buying a house in Silicon Valley. Realistically, the wages need to go WAY UP along with companies moving OUT of the Bay Area to get some housing price relief for the near future.

      • Sam

        I don’t understand your comment. If wages go way up, you’ll have more buyers, i.e., more demand. That’s not going to change anything. Companies moving out is an option, but it’s hard to artificially create that and having policies that drive away businesses and jobs is not a good idea. The only realistic way is via taxes to remove some of the buyers, thus decreasing demand.

        • hoapres

          Not always.

          Let’s say we get rid of all foreign tech workers coming in on visas. Then instead of paying $70K for a foreign software engineer then the following happens : 1. You have a temporary shortage of labor resulting in increased wages say instead of paying $70K a year, you might have to pay an American $150K a year OR 2. Your company MOVES OUT of the area.

          Either way that makes the demand for housing lower and/or more likely to be affordable.

          Ironically, it is the CHEAP foreign labor that ONLY the high tech industry gets that made the problem. So in this case the problem is “artificial”. Treat high tech like any other economic endeavor and the problem goes away.

          • Sam

            My comment had to do with foreign investors. As an example, these are wealthy people from China buying 1.8M houses as rentals or for their kid to crash at while attending Canada College. My beef is with these folks (not the China part, but with foreign real estate investment).

            Also, my comment had to do with supply and demand. If you don’t believe in that, then I can’t help you.

            Finally, I did not comment on foreign tech workers and their salary relative to this conversation. That is a political issue that I do not have a strong opinion on.

            BTW, I have nothing against you or your comments. I am hoping someone will get that investors from China and Russia can overpay on $1.2-2M houses without batting an eye, and it’s making the market for working folks like me pretty miserable.

          • hoapres

            Stopping the Chinese invasion of SF Bay Area will never happen. We lost that war.

            That’s unfortunate but those are the facts of life.

          • Mark

            Cancel the H-1B visas and deport their holders.

            Voila, a good chunk of the Chinese would be gone.

            Chinese aren’t bringing money to the Bay Area though. If Chinese ethnicity people are buying, they’re doing so from the proceeds of their tech jobs.

          • hoapres

            The Chinese really ARE bringing in lots of money to the Bay Area and they are likely to bring in a LOT more.

            Well

            That’s what happens when you have $1 Trillion in US debt.

            I know you say otherwise but real estate agents in Silicon Valley are learning Mandarin and it isn’t because they really want to.

          • Mark

            Ummm, nope. Chinese H-1Bs might be buying, but that’s because they’re making big $$$ at outfits like Nvidia and Marvell right now, and can take on huge mortgages. But the bulk of buying is from Indian-ethnicity “landlord families” buying on credit. I think you pointed out a few times earlier that all cash purchases were actually down from historic norms.

          • Scott Jenner

            yup stinky chinky is a pinky!

          • Scott Jenner

            sad but true we let red china destroy us with cheap garbage and debt but it was the congress and greed of banksters and a few globalist CEOs who sold the American people out. Ross Perot warned about this happening decades ago but people were blind then as they are now.

  • Sam

    I am in the market and my unscientific conclusion from the open houses I attend is that there is still a fair bit amount of foreign interest (eastern euro and China). If these are investment properties for them, they are actually making it difficult for citizens/permanent residents.

    I wish we could put in a tax for these foreign investors so that we (people who work here and call the US home) have a shot at buying a home. The sellers won’t be happy as there would be a price drop, but with these taxes we can help the true buyers and cities and counties at the same time.

  • hoapres

    It’s even worse now that Google owns the city of San Jose or at least the city government.

 
 
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