This month’s Silicon Valley Market Report for November 2017 shows home prices are continuing to climb throughout Silicon Valley as we have even fewer homes to sell. At a micro level, in November, we saw double-digit sales growth in Los Altos and Santa Clara and a drop in sales in the other communities we cover monthly. Could this be as simple as there were more homes for sale in Los Altos and Santa Clara, so buyers are drawn there? Read on to find out how each Silicon Valley community fared in November 2017.
Cupertino Real Estate Market - November 2017
Cupertino home sales dropped off significantly in November 2017 compared to November 2016. In November 2016, a total of 30 Cupertino homes sold. Last month, total sales dropped 46.7% to just 16 while inventories stayed about the same 0.9 months in November 2016 compared to 0.7 months available in November 2017. Bucking local trends, prices dropped last month. Cupertino Buyers paid $1,747,556 on average (2.4% above the list price) compared to an average sale price of $1,927,493 last November 2016 (7.5% above the list price). Even so, the price-per-square-foot increased 16.3% from $942 in November 2016 to $1,096 in November 2017.
Los Altos Real Estate Market - November 2017
Los Altos home sales experienced an increase in year-over-year sales. In November 2017, this rose 36.7% to 41 compared to 30 home sales in November 2016. Inventory shrunk from 0.8 months available in 2016 to just 0.3 months this November. With the increase in total sales, we also saw a significant jump in the average sales price to a whopping $3,264,678 on average in November 2017 compared to November 2016, when the average sales price was $2,746,230. That translated to a price-per-square-foot of $1,315, 18.3% more than the $1,112 paid in November 2016.
Mountain View Real Estate Market - November 2017
Mountain View sales tapered off to 47 compared to 55 in November 2016. Inventory levels, on the other hand, stayed the same at 0.4 months available. Like Los Altos, Mountain View prices rose to $1,547,916 on average (8.1% above the list price). This appreciation compares to November 2016, when Mountain View Home Buyers paid an average of $1,393,715 (11% above the list price). The price-per-square-foot followed this price increase trend, coming in at $1,124 in November 2017, 26.2% higher than the $891 in November 2016.
San Jose Real Estate Market - November 2017
San Jose, our most populous community, typically has the most sales of any city we cover in the Silicon Valley Market Report. So San Jose can often show the health of the average Silicon Valley Home Buyer. In November, year-over-year sales slowed down. Homes sales dropped from 703 in November 2016 to 591 in November 2017, a decline of 15.9%. Likewise, inventory levels dwindled from 1.2 months of available supply in November 2016 to just 0.5 months in November 2017. This is a reduction of 58.3% compared to last year. This October, the average sale price came in at over $1,000,000 for the very first time. In November 2017, it came in even higher at $1,050,221 (6.2% higher than the list price). In November 2016, San Jose Buyers paid $846,288 on average (2.6% below the list price). The average price-per-square-foot rose from $545 in November 2016 to $652 in November 2017, an increase of 19.6%.
Santa Clara Real Estate Market - November 2017
A total of 81 homes sold in Santa Clara in November 2017, a 17.4% increase from the 69 sold last November. Inventory sank to 0.3 month’s supply in November 2017, down 66.7% from the 0.9 months available in November 2016. Santa Clara Buyers paid $1,248,564 on average (7.8% above the list price) compared to an average of $956,938 in November 2016 (7.1% above the list price). As in other communities covered, price-per-square-foot went up 30.6% to $876 compared to $671 in November 2016.
Sunnyvale Real Estate Market - November 2017
Like the Cupertino, Mountain View and San Jose housing markets, Sunnyvale sales decreased year-over-year. Sixty-five (65) Sunnyvale homes sold in November 2017, an 11% decline from the 73 sold in November 2016. Sunnyvale also saw a severe drop in inventory levels, reporting just 0.3 months available in November 2017 compared to 0.8 month’s supply available in November 2016. This helped boost prices from an average of $1,320,022 in November 2016 (8.3% above the list price) to $1,663,822 on average in November 2017 (13.5% above the list price). The price-per-square-foot jumped 26.8%, from $832 in November 2016 to $1,055 in November 2017.
Silicon Valley Market Report - November 2017 Summary
Prices continue to climb as the number of homes available for sale drop. We continue to see more buyers than we have a home to sell at all price points up to $2,000,000. Above the $2.0 million price point, homes are taking much longer to sell, often as long as 90 – 120 days. As we approach 2018, we expect home sales to take longer as more homes reach the $2.0 million list price.
Likewise, we see fewer homes available for the first-time, entry-level buyer. As average home prices climb to over $1,000,000, entry-level buyers are being pushed to more remote locations: Morgan Hill, Gilroy, and even Hollister.
We desperately need more inventory in the form of new construction and existing homeowners wanting to sell to raise their hand.
Likewise, if you want to buy in 2018, start your prep now by talking with an experienced REALTOR@ who knows how to get your offer accepted. It’s not always to the top offer that wins the deal. Often, it's who presents the best solution that matches the needs of the seller. StynesGroup has been getting our buyers' offers accepted for 17 years. Put our experience on your side. Contact your Silicon Valley REALTOR@ to find out what's available. And feel free to visit our Home Buying Page or helpful tips about the entire home buying process.
2018 Tax Changes Commentary – We are not tax experts, so we encourage our readers to consult their professional before taking action on our comments.
We have heard that Congress has proposed tax changes that could impact Silicon Valley Home Owners. We have listened, too. The mortgage interest deduction could drop from the present $1.0 Million to $500,000. We may lose the deduction for Home Equity Loans. We may lose the deduction for state and local taxes, including property taxes. Lastly, Congress is proposing a modification of the Capital Gains Exclusion for homeowners: $250,000 for single taxpayers/ $500,000 for couples. Presently, homeowners need to be able to prove they lived in their primary residence two out of the last five years. Congress wants to raise the bar five out of the past eight years.
If any of the proposed changes become law, we expect it will negatively impact Silicon Valley Home Sales. We have been advised by our tax advisor to pay our 2018 property taxes this year, if possible. Also, we've been encouraged to pay off or refinance our Home Equity Loan into a fixed 1st loan before year-end.
For further information, contact your Silicon Valley REALTOR today.