MY OPINION ABOUT MARKET CONDITIONS FOR SAN JOSE: December 2, 2009
San Jose has many different areas and, while on average some statistics might indicate a sellers market, each area can exhibit its own market flavor. In addition, the large number of distressed sales are artificially improving many of the statistics, and these also vary greatly by specific area. Almost all areas have reflected the general market deterioration and lower prices. And San Jose in general is clearly a Buyers Market.
One sign that indicates an improving market is the significant reduction in the number of "Active" listings for Class 1 (Single Family) homes over the last year. A year ago, the San Jose area had approximately 4500 active listings, while at the end of November, we had only about 1800. Although this statistic is certainly skewed by the recent effort to assure that "short sale" contracts submitted to the lender are properly moved to the "Pending" status, it indicates a measurable increase in buying activity. However, the total number of Active+Pending listings has decreased from 6100 to 4400, which validates the same improvement.
The 90 day statewide moratorium on foreclosures had measurably reduced the number of REO listings, however there are indications that there will be additional increases in the near future.
With some areas seeing a large number of Short Sales, the ratio of Pending Contracts to Total Inventory can be biased upward because of the long time in escrow, and the much higher potential for transactions not closing. For most of these areas, the ratio of Pending Contracts has seen very good improvement over the last several months but this indicator continues to be suspect because of the high number of Short Sales. These include South County, Alum Rock, Evergreen, Santa Teresa, Blossom Valley and Downtown, with these areas appearing to be a Sellers Market when in fact they are still strong Buyers Markets.
The high number of Short Sales and REO properties on the market, now approximately 58% for San Jose area, continues to force a downward trend in pricing.
My advice? With most of the market in a "Buyer's Market" mindset, in spite of the indicators, this is a great time "move up". Sellers are very willing to negotiate price and terms and buyers can get a very good deal for that next level home. And the "spread" between what you're selling and what you're buying is measurably smaller in this market. What you save on your new home will far exceed what you might lose on selling your existing home now.
For buyers, the new conforming FHA limit of $729,750 for Santa Clara County makes many of the properties in reach at the current low interest rates. Banks have recently become more cautious with locking rates, so lock-in if your lender will let you.
For sellers, properly pricing your home is the key to attracting offers in this Buyers Market, but DO fix your home to sell. Buyers have a lot of inventory to choose from and they will quickly pass on homes that are not appealing and in good condition.
The real estate market is very hard to generalize. It is a market made up of many micro markets. For complete information on a particular neighborhood or for an evaluation of your home's worth, call me. If I can help you devise a strategy, call me. Or, go to my website www.dawnoneal.com and click on HOME SALES MARKET TRENDS at the bottom of my web page for current market stats.
If you need assistance finding a good Lender, contact me. Keep your eyes open and make solid offers and you, Buyers, will find the right house with perseverance.
SOME INFORMATION ABOUT SAN JOSE - My Opinion of Market Conditions follow:
-SAN JOSE IS MADE UP OF SEVERAL AREAS:
San Jose - Central San Jose San Jose - East Valley San Jose - North Valley San Jose - South San Jose San Jose - Santa Teresa San Jose - Blossom Valley San Jose - Cambrian San Jose - Almaden Valley San Jose - Evergreen San Jose - Willow Glen
(for more detailed information on each of these areas, visit my website and click on "Areas I Serve" on the bottom right of my website www.DawnOneal.com or go directly to http://www.dawnoneal.com/neighborhoods/index.cfm)
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ZIP Code: 95000 Approximate Location Boundaries: Santa Clara County
Location Characteristics: California Dreams are made in San Jose Area. Visit my website for details of each area within our county.
