April 25, 2010

Silicon Valley median home price rises 29 percent

Silicon Valley median home price rises 29 percent

In one of the strongest signs yet that the Silicon Valley housing market is recovering, the median price of houses sold in Santa Clara County last month shot up 29 percent from a year earlier, hitting $550,000, the biggest year-over-year increase in almost a decade.

San Mateo County saw a similar phenomenon, with the median house price leaping 27 percent to $700,000, according to a report released Thursday by MDA DataQuick. That was the county’s biggest year-over-year increase in nine years.

"In the last four to six months, we’ve been seeing multiple offers, and there are definitely a lot of incentives" for people to buy homes, including both state and federal tax credits for home purchases, said Karl Lee, president of the Santa Clara County Association of Realtors. "I think there’s an undercurrent of demand even without the tax credit. The two greatest factors are the low interest rates, and that buyers believe prices have come down to where they think it’s attractive."

Those low prices helped spur Richard Jackman and his wife, Gina, to buy a three-bedroom house in San Jose’s Willow Glen neighborhood last month. After a little remodeling, they hope to move in next week. The Jackmans began looking for a home a year and a half ago, and in late 2008, they made an offer of about $700,000 on one, but ultimately did not buy it. This time, they won out over three other bidders, and paid $560,000 for a house that had been priced at $540,000.

Did I call it or what? The Valley is back! 10% year over year appreciation here we come!

Comments (37) -- Posted by: burbed @ 5:04 am

37 Responses to “Silicon Valley median home price rises 29 percent”

  1. Alex Says:

    Buy now or be priced out forever!! You heard it here first! Well, you heard it here again.

  2. madhaus Says:

    Come on, you don’t really think this article was serious! Dick and Gina Jackman? Alex, you should have been the first to realize that the Murk was just funnin’ us. Offering over the listing price was the icing on the pie.

  3. meep Says:

    alameda rose 28.6%

    contra costa 25%

    solano 19.4%

    if the economy comntinues to improve some people may have missed their chamce.

  4. A. Lewis Says:

    You can’t tell what happened to prices from the median reports the realtors like to spew.

    Median sales price is meaningless. It can go down as homes are appreciating, and up as they’re depreciating. The median is much more sensitive to how the mix of low and high priced homes that are selling is changing, as opposed to how the values of those homes are changing. Use the Case-Shiller or some other measure that is based on same-home resales.

    Or use the price/sqft numbers on Redfin – almost anything is better than the damned median.

  5. bob Says:

    Yes.. I’m sure many people ( RE included) read today’s headlines about rising home prices in the BA. But it helps to read the fine print:

    http://www.dqnews.com/Articles/2010/News/California/Bay-Area/RRBay100415.aspx

    The March median’s jump over a year ago was to be expected, given the pattern in recent months toward a more normal distribution of sales across the region and all price categories, which pushed the median higher. A year ago the median dived to $290,000 not just because home prices had fallen, but because the market had become extremely lopsided: Sales were unusually high in lower-cost inland areas hit hardest by foreclosures, while they were scant in many higher-cost areas.

    “While March’s big annual gain in the regional median tells us a lot about what’s changed in the market, it shouldn’t be viewed as evidence of surging home values,” said John Walsh, MDA DataQuick president. “It’s a statistical quirk. A variety of data indicate prices in many communities have more or less flattened out or risen modestly, while they remain soft in others. The Bay Area is still impacted more than a lot of other markets by the years-old credit crunch. It’s tougher to get the ‘jumbo’ mortgages and adjustable-rate financing that had long been staples there.”

    “Looking ahead,” he continued, “stability in the housing market will rely more heavily on a strengthening economy. Government housing stimulus is fading, and there are threats from higher mortgage rates, more distressed properties hitting the market and continued job losses.”

  6. SEA Says:

    bob- Let me explain how REALTOR statistics work:

    Case 1: Stats show favorable selling conditions (increasing prices/decreasing supply/etc.).

    In this case there is no reason to dispute the statistics. They are perfect.

    Case 2: Stats show unfavorable selling conditions.

    In this case talk about what a great time it is to buy, how the stats are skewed by shifting sales mixes, and so on.

    What does all this mean?

    Now is a great time to sell and buy, as always. Owners really don’t lose. Those foreclosures only happen to bad people. And, as we are all very well-aware, all this does not apply to the RBA, where prices only go up, up, up and away.

    I am always reminded that REALTORS are just like attorneys: It does not matter what side an attorney is on, he’ll be paid either way.

  7. nomadic Says:

    Now is a great time to sell and buy, as always. Owners really don’t lose.

    You bet – you can sell your house for a modest loss now, but then the one you buy (NOW!) will have an equally depressed price. Win-win!

    I am always reminded that REALTORS are just like attorneys: It does not matter what side an attorney is on, he’ll be paid either way.

    Worked great for Goldman Sachs too!

  8. Real Estater Says:

    The changing real-estate landscape in 2010 by Robert Taylor, J.D.:

    The landscape for buyers is exceptional. The interest rates are at historic lows (assuming you can qualify). Real estate has fallen in value and is therefore more affordable. Rents remain high in the Bay Area so that buying looks attractive in comparison with renting.
    First-time buyers may be eligible for federal and state tax credits of $18,000 if they are in contract by April 30, 2010, for a property under $800,000. Even certain move-down buyers are eligible for a tax credit.

    Buyers have an opportunity to invest in real estate at a significant discount in comparison with those who purchased in the last three to four years. Buyers can expect that as unemployment goes down that the values of homes will increase and rents shall go up. The lack of new construction will tighten the housing market in the Bay Area for the next 10 years or more. Our communities remain highly desirable and the local economy produces some of the highest wages in the nation.

    My advice on landscaping: Plant gradually to avoid Big Brother and use less water, look for higher interest rates in the future, and buy a home if you can afford to do it.

  9. nomadic Says:

    Rents remain high in the Bay Area so that buying looks attractive in comparison with renting.

    I want some of what he’s smoking. Or else he lives in the slums of the east bay – after all, a lawyer would never lie!

  10. madhaus Says:

    RE would never lie, either, except when his fingers are typing.

  11. SEA Says:

    nomadic- Commenting on “Rents remain high in the Bay Area so that buying looks attractive in comparison with renting,” you suggest, “I want some of what he’s smoking. Or else he lives in the slums of the east bay – after all, a lawyer would never lie!”

    Did you forget about all that profit? And, don’t forget, “you can sell your house for a modest loss now, but then the one you buy (NOW!) will have an equally depressed price. Win-win!”

    There is never any loss to home ownership. NEVER!

  12. nomadic Says:

    Yes, SEA, I should be switching between my regular name an my bullish nom de plume “no estater.”

  13. madEstater Says:

    I wonder about your choosing that nom d’estater. Doesn’t no estater imply you don’t own anything? Mine simply says this I’m an Angry Owner.

  14. nomadic Says:

    Of course there is no estate. I live in the slums of LG. ;-)

  15. Petsmart groomer Says:

    The Residences at Dennison Triangle, a former downtown factory converted into condominiums, sold for $10 million yesterday at public auction as part of foreclosure proceedings.

    $10M for 77 units ($130K per unit) – Not bad.

  16. madEstater Says:

    Meaningless anecdotal data.

  17. Real Estater Says:

    When I write my own commentaries, I sometimes get the senseless attacks from angry renters. When I show articles after articles and stats after stats supporting my claims, would you guys at least learn to be more open minded? No, nobody is smoking anything. This is what’s happening out there.

  18. Petsmart groomer Says:

    Funny, I don’t get that. Maybe you should try to be more like me?

  19. nomadic Says:

    #17 – can you find a current prospective rental property in PA where it could be cash flow positive from the date of purchase? If not PA, then any peninsula area with good schools.

  20. madhaus Says:

    Yes, I also agree RE should be more like you. Re should be more like almost anyone else.

    Admittedly, it would deprive us of our favorite troll, but there’s only so much pity party one can take from the poster who has won Commenter We’d Most Like To Lock Up in a Trifecta House for the last 3 years.

  21. Real Estater Says:

    madhaus,

    You can use the T word a hundred times, but it still doesn’t change reality.

    Here’s some more lessons for the likes of Pralay (who never sees open houses):

    If you want to know what’s on the market, you need to get out there and look.

    // RE’s comment: Duh

    I began in Mountain View, visiting 792 Bond Way in the Cuesta Park neighborhood, with an asking price of $849,950.

    But, at just after 1:30 p.m., the traditional time for open houses to begin, not one person was inspecting the premises.

    Patricia York, a Menlo Park Alain Pinel agent, wasn’t surprised, since there was a pending sale on the property.
    // RE’s comment: I see

    “Last week it was a madhouse,” she said, with 50 groups trooping through on Saturday, another 25 groups on Sunday.

    York’s nuggets:

    * Homes on the other side of Miramonte, in the Los Altos School District, sell for $100,000 more.
    // RE’s comment: At least it’s not in CUSD, which would sell for another $100,000 less.

    * Inventory is low compared to last year. Since the market bottomed out in January 2009 it’s been slowly inching forward. “The last three to four months we’re seeing prices up, mainly because of lack of housing,” he said.

    // RE’s comment: Gee, sounds familiar. Didn’t I say that last year?

    * “People still need a bigger place. Eighty percent of sales are trade-ups, plus lots of ‘re-lo’s’ (people relocating from another city or state),” he said.

    // RE’s comment: Did somebody here say there is no more move-up buyers? Would this person step forward please?

    OK, you guys can read the rest.

  22. madhaus Says:

    Here’s a rather interesting little graph showing the utter breakdown of the pulse of the market in 94301. As nomadic snarked earlier, the RBA is where principles of economics no longer apply.

    In this case they do apply. Sellers won’t drop their prices, and buyers won’t pay asking. Result? Not a drop in inventory, but a drop in volume. I mean, this is a serious disconnect here! If anything, asking prices are going up, while selling prices are going down!

    Let’s check whether this is a buyers or sellers market again… oh dear! A score under 30 is a buyers market, and Palo Alto is under 22.5! How could this be? And why is the average Palo Alto property taking (gasp) 171 days to sell?

    We’ve all heard of sticky prices. These are downright agglutinative. No downturn here… on asking prices. Failure to sell at these prices, though, shows what’s flying through windows: bricks from the neighbors who want the damned For Sale signs out of their Special Neighborhood.

  23. Real Estater Says:

    madhaus,

    No sure where those useless aggregate data come from, but they are clearly misleading if not wrong. I see houses come up for sale and gone in a week or two all the time. There are some mega properties that sit on the market and distort the statistics of a low volume market.

    Of course, the easiest way to find out is to come bid for your trade-up property. I’m pretty sure you’ll get blown out of town.

  24. madhaus Says:

    Re post #21:

    1. Please familiarize yourself with the concept of Fair Use. You cannot take 8 grafs from an article and post them somewhere else. That is called copyright violation.

    2. Please find a SFH in CUSD selling for $100,000 less than the property described above. It must be same square footage (within 5%) for both home and lot size, same br/ba, same level of traffic, etc.

    3. 24 homes for sale in 94040 is low inventory? Altos Research also labels Mountain View as a buyers’ market with an MAI of 21.7.

    4. You misspelled “madhaus” in graf #7.

  25. madEstater Says:

    Translation of post #23:

    No sure where those useless aggregate data come from,

    I am unwilling to click links for fear I won’t understand Redfin’s ubiquitous graphs and make myself into an even bigger fool than everyone already knows I am

    but they are clearly misleading if not wrong.

    so my best strategy is to denounce what I cannot aceept, let alone understand.

    I see houses come up for sale and gone in a week or two all the time.

    I saw a house come up for sale at a fire-sale price because it was on fire last week. It’s gone. Burnt to the foundation.

    There are some mega properties that sit on the market and distort the statistics of a low volume market.

    Ha ha. I said mega again!

    There are a few hundred properties not selling at all, enough to distort the sales statistics of a low volume market. I know madhaus said above that the spread between asking and selling price lowered the sales volume but I don’t understand why. Why does she have to use all this math?

    Of course, the easiest way to find out is to come bid for your trade-up property.

    Of course, the easiest way to find out that I don’t know what I’m talking about is to post more math graphs and useless aggregate data. I won’t respond to that, either. I’ll just insult you for sitting in the same house for 15 years, burning your mortgage, and paying a hundred a year in property taxes.

    I’m pretty sure you’ll get blown out of town.

    I’m pretty sure I’m going to get blown out of this argument, so I’ll pick on Pralay next.

  26. DreamT Says:

    “I’m pretty sure I’m going to get blown out of this argument, so I’ll pick on Pralay next.”
    lol so true

  27. Real Estater Says:

    madhaus,

    Save your minor league bravado. All you need to do to test out your “buyers’ market” theory is to come bid for your move-up property. It should be a piece of cake with the equity from your 94087 shack.

  28. madEstater Says:

    Save your minor league bravado.

    I can’t respond to a word you said, so I’ll sweep it aside by putting you down. Hopefully you’ll go away.

    All you need to do to test out your “buyers’ market” theory is to come bid for your move-up property.

    I can’t disprove anything you ever have said or will say, so I’ll change the subject to a complete non sequitur: Until you bid on another house, you’re a complete loser. I’m saying that because you keep coming too close to uncovering what a complete loser I am, and how empty and meaningless my entire life is, so I’m going to pre-empt you. Loser, loser, loser, nahnahnah.

    It should be a piece of cake with the equity from your 94087 shack.

    It should be a piece of cake to deflect you from your intensely painful takedowns. After all, nothing upsets me more than remembering that once I didn’t live in 94301, so it should upset you that you don’t live here when you could. Why doesn’t this bother you? What the hell is wrong with you? Can’t you set your priorities to be just like mine?

  29. anon Says:

    Eggskreeter, are you John Madden? Do you know the quote: “Hey, the offensive linemen are the biggest guys on the field, they’re bigger than everybody else, and that’s what makes them the biggest guys on the field.”

    psst: Hey, now’s a good time to buy. It’s a good time to buy because its a good time to buy and that’s why it’s a good time to buy.

  30. Real Estater Says:

    OK. I should know better than to get a redhead mad. I back off now.

  31. nomadic Says:

    RE, it’s good that you can recognize your limitations. Even worse than getting a redhead mad, is getting a redheaded woman mad.

    .
    Please familiarize yourself with the concept of Fair Use. You cannot take 8 grafs from an article and post them somewhere else. That is called copyright violation.

    madhaus? I thought when a realtard does that to real estate propaganda, it’s just free advertising.

  32. madhaus Says:

    Well yeah, it is, but STILL, I’ll like to rotate around all the ways that our least favorite purported Palo Alto poseur is shallow, amoral, avaricious, grasping, untrustworthy, and in this case, mendacious.

  33. bob Says:

    RE,
    I find it funny that you assume renters are angry. I’m quite happy to tell you the truth. Happy that I’m saving lots of money versus spending all on a mortgage.

  34. McFly Says:

    I don’t know any angry renters and I know a lot that rent. All the renters I know realize how lucky they are that they didn’t buy during the last run-up and are looking forward to buying at sensical prices in a couple years. On the other hand, I know a lot of stressed out and pissed off homeowners that wish they were, or will become, renters.

  35. DreamT Says:

    “looking forward to buying at sensical prices in a couple years.”
    I hate to echo Real Estater, but this sounds eerily like 2007.

  36. anon Says:

    McFly, that is blasphemous. Everyone knows that buying property is the key to building wealth!

  37. Gina jackman | Lentablog Says:

    [...] Silicon Valley median home price rises 29 percent | Burbed.comApr 25, 2010 … Dick and Gina Jackman? Alex, you should have been the first to realize that the Murk was just funnin’ us. Offering over the listing price was the … [...]


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