About Santa Clara County, CA

Here are my observations of October's transactions and market actions for Santa Clara, San Mateo, Santa Cruz, and Monterey counties. You are encouraged to leave your comments and questions or even update us on what you are witnessing in your neighborhood or area.

> Market continues showing strength and improvement -- Market activity has continued to display improvement for six months! For instance, in Santa Clara County, October saw an 18% increase in closings over the same month last year. My analysis of the transactional information reveals:

* Buyers continue to trip over each other to submit offers for homes in the more affordable areas of Santa Clara, San Mateo, Santa Cruz, and Monterey counties. Many offers submitted are for all cash or have substantial down payments. There are still only 22 days of unsold inventory on single family residences in Santa Clara County with a price of under $450,000! For those in the range of $450,000 to $600,000, there is only 33 days of unsold inventory. It is similar in San Mateo County.
* The supply of homes available for sale (inventory) continues to trend lower in each of the four counties without exception. This trend has been virtually uninterrupted since February 2009 and it is still more pronounced in Santa Clara and Monterey counties.
* The sale price to list price ratio continues above 100% in Santa Clara County and stands at 100.8%, continuing an upward trend; San Mateo stands at 99.3%.
* The Days of Unsold Inventory (DUI) continues to improve generally in each county for single family residences and condos/townhouses, respectively. Santa Clara's DUI stands at 47 and 44, San Mateo's DUI is 69 and 77, Santa Cruz's DUI is 108 and 105 and Monterey's DUI is 70 and 83.

> Super-heated Seller's Markets? -- You bet! East Valley, South San Jose, Blossom Valley, Evergreen, Santa Teresa, Santa Clara, North Valley, Milpitas. To refresh you, characteristics of a seller's market are shorter time on the market, fewer number of homes available for sale, higher probability of multiple offers with many sale prices exceeding list prices and a tendency towards price appreciation.

> Buyer's Markets? -- For Santa Clara County, we see buyer's markets in Saratoga, Los Gatos, and Los Gatos Mountains. Los Gatos exhibits the highest Days of Unsold Inventory in the county at 141. To refresh you, characteristics of a buyer's market are longer time on the market, higher number of homes available for sale, lower probability of multiple offers or even an offer with most sale prices below list price. The tendency is to have price depreciation or stable prices at best case under this market condition.

Where do I get "Seller's" and "Buyer's" market information? This is not an opinion thing but a calculation I make using the number of homes for sale (supply) and the number of sales (demand) in the prior month which results in days of unsold inventory (DUI). Additionally, this is not based on price levels but a supply-demand relationship. For instance, the higher-priced area of Palo Alto/Mountain View/Los Altos exhibits a DUI of only 56 which translates into a balanced market.

> Median prices -- Took another jump upwards last month median price now stands at $593,250 for Santa Clara County and $702,000 for San Mateo County. These are UP about 8% from the same month a year ago in Santa Clara County and down 1% in San Mateo Ccounty. I coach my clients to no use an entire county's median price level to decide on whether to buy or sell. To formulate an effective strategy, I use analysis of the supply-demand characteristics on a much smaller area down to the neighborhood in most cases.

> Tale of Two Markets -- Sales of affordable homes in Santa Clara County less than $450,000 level have gotten even hotter than the past few months. There are just 21 days of unsold inventory for single family residences below $450,000 and 41 for homes with prices from $450,000 to $600,000. As the price ranges increase, the DUI increases in what we call a normal pattern. For Santa Clara County, high-priced homes in the $2,500,000 to $5,000,000 range showed a DUI of 242 or about eight months of supply whereas in San Mateo County showed a similar result of 192.

> Polarized Market -- Sales of higher-priced homes (above $1,000,000) are sluggish at best, depending upon area. Last month, there were no sales of $5+ million homes in Santa Clara County and just one in San Mateo County (4.2 years of unsold inventory). With slow movements in higher-priced homes and a white-hot situation in lower-priced homes, I call this a polarized market.

> Forbes Says We're Safe -- According to an article in the Silicon Valley Business Journal, Forbes Magazine reported that San Jose-Sunnyvale-Santa Clara was the 7th safest area in the country. Factors included were: violent crime, workplace fatality rates, traffic death rates and natural disaster risk. Silicon Valley was the second safest area behind the Twin Cities of Minneapolis-St. Paul.

> Sellers Be Sooner -- I continue to maintain my recommendation for sellers of higher-priced homes, especially those above $1 million that they should consider selling sooner and having an initially more-aggressive list price as the market usually softens when we go move into the holiday season. In any case, check with a Realtor knowledgeable about the technical aspects of the market conditions to guide you in positioning your home for maximum activity and price while minimizing time on market.

For those considering a purchase of a home in an expensive area like Los Altos Hills, Los Gatos/Monte Sereno, Saratoga, your time is getting closer! Be ready but I think we'll see list prices reduced and sale prices dropping as we get into the holiday season this year. Most years we experience more activity in the early spring and spring so the best time for a purchase is coming up soon!

> Investor's Corner -- Activity continues to trend upwards as more and more investors reenter the market, many of them are completing all cash purchases, especially in the more affordable price ranges. For Santa Clara County, there were 88 sales during the month with 47 of them in the less than $600,000 price range as that price range had a DUI of just 37 whereas the DUI for residential investment properties above $600,000 jumps to nearly a year. For investors who have the ability to purchase higher-priced properties (above $1,000,000), there is about one year of unsold inventory at current sales demand and represents a BUYER'S market as I'm sure there are at least some motivated sellers in that range.


Thanks for reading my blog. I'm Tom McEvoy -- Let me know your comments, questions, observations you may have.

Thank you, Clients and Friends! You are the Heart and Soul of My Business and I invite you to join me and the Get RE$ult$ Team for our 2nd Annual THANKSGIVING party!

It's this Sat., Nov. 21st, from 9 am till noon at the Altas Realty Conference Center (Upstairs in Suite #224), 1190 S. Bascom, #224, San Jose 95128.

We'll share treats, make crafts and have fun ... PLUS FREE FAMILY PHOTOS with Santa and/or Mrs. Claus!

Look forward to seeing you there. Oh, and feel free to bring friends, neighbors or colleagues who

I am amazed by how surprised prospects are when I advise them I will provide references from past clients who have used my services, particularly, short sale clients. Yes, in the case of short sale clients, it is understandable that clients do not want to bring up and discuss the unpleasant hardships of the past with complete strangers. But as consumers of services you should have the right to see what you agree to buy.

Unfortunately in our changing business environment, there are too many people out there claiming to be “experts” in certain areas of our profession without providing any proof of their adequacy, let alone expertise. One simply is not an expert because one declares oneself as such.

Under normal circumstances, selling a house is important but does not have long term implications if the house cannot be sold. It simply means the homeowners stay in the house until a better time to sell comes along. However, in a foreclosure situation, if the house cannot be sold or if the terms cannot be negotiated with the lenders to get the approval for the sale, people not only lose houses, but they lose that important sense of “home” and go through an emotional roller coaster ride that comes along with being foreclosed. Houses can be replaced, but the emotional scars can remain for a long time…...

Ask for references. When you are talking to a Realtor, you are essentially interviewing him/her for a job. And what job interview does not involve providing references from past employers? If a Realtor does a good job for their clients, it is not difficult to get the latter to share their experiences with potential clients; as a matter of facts some become your evangelists if they had a good experience with you.

Some Realtors belong to an organization that rates the service via independent surveys and post those scores on the web. I belong to the QSC organization because I believe in its philosophy and strive to provide the best service I am able to provide and believe if I were on the opposite side, I would want to know how that person's past clients rated their service before engaging them. These are difficult times and you should get the best quality service available out there. After all, don't you deserve it?

Unfortunately, foreclosures are no longer reserved for the sub prime borrowers. Now it has spread to the mainstream. All too often, it takes a few of bad months before the borrower falls so far behind, they are unable to catch up.

Have you been blogging regularly, but not getting good reader response? Here are a few Rules of Engagement (from Virtual REBarCamp yesterday) that all of us real estate bloggers could follow for greater success:

• Ask yourself: Are you answering questions your readers have?
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Please leave your comments here at this blog post after your check out my other blog: www.SaratogaVoice.com. I learned a lot yesterday and still need to make some improvements, with your help. Thanks!

Rick Bonetti, Alain Pinel Realtors - Saratoga, CA 408-857-8800

*Note: We know that Google SEO is more focused on content than keywords, but keywords give you, the writer, focus to engage the reader in your conversation.