Posted Tue May 18 03:29PM
Attached, please find the most updated Market Dynamics statistics for Santa Clara County through April 2010. These statistics are for Single Family and Condo/Townhomes in Santa Clara County.
Here are some highlights to pay particular attention to as you review the data/graphs through April of 2010:
1. Median Price- April's Median Price continued its upward trajectory from March 2010/$520,000 to $542,000 in April (which is $112,000 than April one year ago). The SCC Median reached its low point in March, one year ago at $415,000. As we predicted over the last few months of 2009 and beginning of 2010, we are noting an increasingly higher rate of upper end sales in Santa Clara County (particularly between 2-5+ million). As these sales are now closing escrow, the median price in SCC has already climbed well above $500,000 and should approach $600,000 this year (last seen in July 2008 ($630,000).
2. Supply&Demand (Units)- We continue to see a dramatic distinction as we compare April 2008 with 2010 in the following categories; For Sale (supply/inventory), Under Contract (pending sales) and Sold (closed escrows). To illustrate when we compare Apr 08 with the same month in 2010 we see the following- For Sale properties/supply is down 36%. The number of under contract properties (pending sales) is up 92% and the sold/closed escrows are up 42%. The pattern and direction of this market for the past 7-8 months continues to be the same story; declining overall supply/inventory, increasing new sales and closed escrows. Normal seasonality is coming into play in 2010 as buyer demand continues to amplify moving well into the 2, 3, 4 and 5+ million price ranges at a significant rate as compared to the same time last year. Following an increase in sales and slow closing rate due to short sales and financing guidelines and challenges, we are now seeing closings coming through at a higher rate. This increasing closing activity in April, May and in the coming months will have a significant, positive affect on these monthly data points, further pointing to an imminent real estate recovery in Silicon Valley.
3. Months Supply of Inventory & Days on Market- The overall Months Supply of Inventory (months of inventory available based on the total existing supply divided by the rate of sales) dwindled down to a 2 year low range of 1.7 months supply at month end as compared to a fully adjusted MSI of 2.1 months in March 2010. This is down from a 2 year peak of 14.2 months in January of 08. The Months of Supply of Inventory declined each and every month in 2009 from 7.7 months in January to 2.6 months by year end. Days on market has remained under 60 days for the past 7-8 months, and has now dipped into the 50 day range in SCC. This reduction in the Days on Market is another indication of the improving residential real estate market.
4. Basic Absorption- The decline in the residual inventory levels continues(the remaining inventory each month excluding pending sales, closed sales and new listings). This segment is down -63% when comparing Apr 2008 and Apr 2010. More and more of the less desirable or unrealistically priced properties are either now selling (in the case of unrealistically priced- prices are being adjusted) or coming off the market. The other metrics are quite compelling with the comparison of April 2008 vs April 2010 we see Under Contract Properties/pendings increasing and up 92% and New listing inventory coming on the market remaining down 11%.
5. Percent Under Contract- This is typically one of the most telling statistics of all because this is @ the line of scrimmage, where the market is today. Essentially when looking @ this stat, we are factoring of all the available inventory what percentage is under contract or a pending sale. Typically in any area we have seen where @ least 1 for every 4 available listings is under contract, we have a stable or appreciating market. Whenever we have seen this factor less than 1 out of 10 or less than 10%, we have sign prices more in a correction mode. We can look back historically and show where this occurred in pockets throughout SCC @ different times and how this was impacting values to the down or upside. At this point in time, SCC is @ a 2 year high with nearly 33.4% of all the available listings/supply under contract/in escrow. This percentage continues its progression and is up from last month's fully adjusted figure of over 29.1%, and is a 202% increase when compared to April of 2008 when this figure for SCC was at 11.1%. One year ago March, the percent under contract figure was 17.9%.
In conclusion, the market continues to stabilize and improve in the Santa Clara County and overall bay area residential real estate market. Listing inventory remains at historical lows, even with new inventory coming on, strong buyer demand is consuming these properties in relatively short periods of time. From our sales activity over the past 30 days and increasing even in the past several weeks and months, we are certain to see improving data and statistics in the news as these new sales are now closing escrow. We are fortunate to be right at the pulse of activity and trends and this should be an advantage to our clients and/or those that have an interest in following the most current market trends.
In addition to the positive current rate of sales, one of the most encouraging signs continues to be the increasing high-end sales activity, which was sluggish during much of 2009. This upper-end activity continues to increase and particularly in the $2-5+ million ranges. It will be very interesting to see the upward movement in the median price as these sales continue to close over the next 30, 60 and 90+ days. We are projecting a strong second quarter as this YTD (year to date) volume is up dramatically when compared to YTD 2009. As a company, Sereno Group is up 110% this YTD as compared to the same period in 2009. Most of the market and leading peer companies are up between 30-40% which is a strong indication for the market overall. We are in the midst the most balanced and active market we have seen in over 2-3 years.
Thank you and have a great evening and weekend.
Sincerely,
Chris Trapani
President & CEO
Sereno Group
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