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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (86209)	8/21/2007 9:45:18 AM
From: Les H	Read Replies (3) \| Respond to of 306849

Silicon Valley A homogeneous market is normal. Currently, there is both a dramatic price and geographic split in the market within SCC. Pricing is near record high levels but, doesn't tell the full story. Look at volume. SMC, SCC and MTY all had their fewest number of SFR closed and/or initiated transaction since 1998. the one exception was SZC had 177 initiated sales compared with 172 initiated sales in July 2006. For the most part, July 2007 saw additional price stabilization. SMC set a new record high median Sold price in June of $1,011,000. Yes, breaking $1.0 Million for the first time ever. The recent price jump in large part is because of a significant change in the mix of what is selling because of the sub-prime loan situation. Mt View, Los Altos, and Palo Alto normally represent 10% of the transactions. In February these areas represented 9% of all SCC transactions. By the end of March this had nearly tripled to 25% of all SCC transactions. The affordable areas: South, Central and East San Jose dropped from 16% to only 11% of all transactions. Both these shifts forces the median Sold price to increase even without any appreciation. This can also been seen with year over year appreciation in the median price but with year over year depreciation in the 10 percentile price level. The demand for housing close to the SMC/SCC border remains high causing that area to appreciate. The San Mateo - Santa Clara County border tends to lead local real estate market trends. The current trend seems to be closing in on this border from the outlaying areas. This area is doing much better than either SCC or SMC as a whole. SCC inventory is 138% of the 8-year average. Inventory, resumed its climb reaching 4,245. This is the highest level since 1998 except May 14, 2001 through June 30, 2001. Sales volume remains dramatically low at only 75% of the 8-year average. The inventory and sales volume data are not adjusted for growth, so approximately 107% would be normal for both. Days of Unsold Inventory is at 171% of the 8-year average is self adjusting for growth as it is the ratio of inventory to sales. SMC and SZC inventories are also approaching their record highs. MTY inventory is currently setting new record high level and continuing to grow. The decrease in demand coupled with the increase in supply has moved most of the region into what we consider a Buyer's market. The real estate market is not that simple. The notable exception is the area close to the SMC - SCC border that is still a Seller's market with only 29 days of unsold inventory. Other areas such as Santa Clara, Willow Glen, Cambrian and Campbell are slower with 89 days of unsold inventory, Los Gatos and Saratoga with 102 DUI which we consider a balanced market. Areas such as North Valley, Milpitas, Blossom Valley have 147 DUI. Finally South County is at 255. Finally East Valley, Central San Jose and South San Jose have 402 DUI. These last three market areas are experiencing strong buyer's market. This geographic based discrepancy is abnormal based on our observations of the market dating back to 1998. Currently, the hottest price range is between $750,000 and $2,500,000 with only 97 Days of Unsold Inventory. Normally, the lower price ranges have the lower DUI. creeksiderealty.com