Archive for May, 2008
Graduation vs. The Market
For years, I’ve noticed that the real estate market seems to slow during the final weeks of May and first few weeks of June. I was always surprised that graduation could make a noticeable difference in the attendance to open houses and number of buyers out looking at listings. But I got to learn first hand this year how graduation can TAKE OVER YOUR LIFE!
Our daughter just graduated from high school and between the huge party we co-hosted, out-of-town relatives visiting and the myriad of parties to go to in honor of the graduates — now I understand. We are so proud of Emma and wouldn’t have missed a minute of the congratulatory celebrations, even if it did mean removing myself from the real estate scene for a week or two. She will be off to University of California at the end of September and so shouldn’t we be savoring every last minute with her?
So if you currently have your home on the market at this time, please be patient. We weeping mothers and relieved fathers, and all of our various and sundry relatives and friends will be back actively participating in the housing market once the graduation festivities quiet down for another year.
South County Pending Sales Continue to Rise
For single family residences, the percentage of pending sales to active listings in the south Santa Clara County region continues to grow – which is great news for serious real estate sellers. In our area of Morgan Hill, San Martin and Gilroy, the proportion of pending listings to overall listings on the market began the year 2008 at 7%, a remarkably low number. But that percentage has continued to increase from 7% in January, to 9% in February, to 10% in March, then to 14% in April and at the beginning of this week, May 19, 2008, we have 15% of our listings pending. The actual numbers are 148 pending sales and 834 active listings for a total number of 982 overall listings on the market.
This rise in the percentage of pending sales reflects the ideal marriage of low prices, low interest rates and motivated sellers. Buyers are finding that it may not make sense to wait any longer….
Let’s talk statistics
Here in the south Santa Clara County area consisting of Morgan Hill, Gilroy and San Martin, pending sales have risen as Spring progesses. In January of 2008, we had 56 single family residences (sfr) go under contract. In February, 2008, 68 went under contract. In March, 2008, 80 went under contract and in April, 2008, 123 went under contract which is a signifcant rise.
There are currently 825 sfr active listings in the south county area with 140 sales pending under contract.
For the month of April, 2008, the cumulative days on market (CDOM) is 116 compared to 92 from April of last year.
The average selling price in April for the south county is $607,283 which is a 30% drop from April of last year’s average of $868,560.
The median selling price in April for the south county is $605,777 which is a 25% drop from April of last year’s median of $807,345. I always feel the median price is a more accurate picture of what is happening in the market than the average price because it is easy to skew the average when a very expensive home sells.
These statistics were obtained from pro.mlslistings.com.
There was a time when Patience ceased to be a virtue. It was long ago.
(Title quote from Charlotte Perkins Gilman)
I currently have three offers out on short sale properties. Banks are taking forever to respond to these offers. One offer was submitted on March 1, 2008, one on March 30, 2008, and one was just submitted on May 5, 2008. I don’t have a response on any of them. Thank goodness my clients are aware that they will have to be extremely patient while waiting for a response from the seller’s bank (or banks if there is more than one loan on the property.) But, in the meantime, new properties are coming on the market, and the sellers and the banks may lose what offers they currently have on the table as buyers are always looking….
Anecdotally, the banks don’t seem to realize the value of the Realtors who list the short sales or those who represent buyers who make offers on the short sales. Banks want to severely cut our commissions. From what I understand regarding short sales versus foreclosures/REOs, banks would be much better off financially if they would work with the Realtors in a timely manner, pay our full commissions and get these short sales closed. The banks’ losses will be much greater if these short sales work through the foreclosure process and end up as REOs. And with the way the system is working currently, it is very probable that the majority of short sales will become REOs. Ironically, once the REOs are listed on the MLS, the seller, i.e. the bank, usually offers 3% commission to the buyer’s agent.
Isn’t it ironic?
Several years ago, home buyers:
- were desperate to buy anything that could hold up a roof
- would offer well over list-price, especially when competing with other offers
- would purchase the home in as-is condition
- would have no contingencies in the contract
Fast-forward to 2008. Buyers are now paralyzed. It’s ironic because:
- there is a record amount of inventory to choose from
- sellers have dropped their list prices, and in many cases by hundreds of thousands of dollars
- interest rates are still low
- sellers are accepting terms that meet the buyer’s needs
Here in south Santa Clara County, average and median prices are below the average and median prices of single family homes during the fourth quarter of 2004. Currently for Multiple Listing Service (MLS) Area 1 (Morgan Hill, San Martin and Gilroy), the average price of a single family home is $723,004 and the median is $660,000. In 2004 Q4, the average was $734,250 and the median was $668,000. Just for reference, the peak average price for MLS Area 1 was $917,811 in the third quarter of 2006. And the peak median price for MLS Area 1 was $805,000 in the second quarter of 2006.
If you are contemplating a real estate purchase, now is a great time to buy in south Santa Clara County!
Let Me Introduce Myself
Welcome to my brand new blog site. I’m so happy that you came to visit! Some of you who are checking in may already know me, but for those of you who don’t I’ll give you a little bio.
I was born in southern Indiana, and no, I didn’t grow up on a corn farm. I was a city girl in Evansville (pop. 125,000). At age 18, I left for Vanderbilt University in Nashville, TN to study Civil Engineering. I had to graduate with that major because my dad told me he didn’t think I could! (He was a master at reverse psychology!) After graduation I decided to head west when I was offered a job in Redwood City, CA at a small engineering research firm where I worked for about three years.
I met my husband-to-be, Dan, traveled for four months in Southeast Asia and Nepal, and then let Dan talk me into getting my masters in Civil Engineering at SJSU with him so that he could copy my homework.
Well, to summarize a long story, we married, I worked in civil engineering for three years, we had two beautiful children who we both adore, and then I began my career in real estate.
But I will say that I’m passionate about selling real estate! When I made the switch from engineering to real estate, I was a little sheepish about admitting that I was joining the ranks of the not very esteemed Realtors. But my estimation of Realtors has risen immensely and some of the people that I admire a great deal are, you guessed it, Realtors! And not only do I love working with people and fitting them into the home of their dreams, but I feel that I’m raising the bar on the quality of the service that all buyers and sellers deserve!
Gretchen Merrick
cell (408) 892 9015
