Market Update: August 2019
How’s the Market?
Here’s the short answer: The market is softening. But, you can still get top dollar for your home with your Friendly Neighborhood Agent, Andy Wong of Sereno.
Here’s the long answer:
This is my 17th year in real estate and I believe we’re returning to a “normal market.” The market has been ‘on fire’ for the last 7-8 years. Following the Great Recession (2008-9), our local market recovered and soared past the 2007 peak.
We’re entering a stabilization phase because the market cannot continue climbing at double digit rates forever. At some point, it needs to level out. I don’t see any reason to panic because the market isn’t crashing like 2008 though.
In South Los Altos, the number of homes put up for sale was up 37% in 2019 (May, June, July) compared to the same period of time in 2018. However, the number of homes sold was up only 22% in the same period of time.
Buyers still have the money to buy, but they are being more patient and sticking to their ‘wish list’ more closely than in the past few years. Two years ago, they were driven by the Fear Of Missing Out (FOMO). Even if a house checked off only 75% of their wish list, they would make an offer because they were afraid the escalating market would make the next comparable house more expensive. Today, Buyers driven by the Fear Of Over-Paying (FOOP). They’re concerned that the value of the home will drop after they purchase it. Also, unless a house checks off 90% of their wish list, they are willing to wait for the next house to come on the market. Here’s a recent article in the Mercury News that reports on this latest trend.
Los Altos is holding up much better than the greater Bay Area. The San Francisco Chronicle reports, “The total number of homes fell sharply last month…down 11.4% from May and down 12.6% from last June. Normally, sales rise between May and June — since 1988 they’ve gone up 3.6% on average.” The Mercury News reports similar information: Santa Clara county sales dropped 14.6% year-over-year. Another Mercury News article mentions a drop in the number for Santa Clara county, citing prices hit an affordability ceiling for the Bay Area.
Can You Still Get Top Dollar In This Market?
Because the inventory is growing and Buyers are more picky (and patient), hiring the local neighborhood expert is crucial for selling your home. The local expert gets you more money, more quickly. They know what makes a specific street or neighborhood unique and valuable (or not). They can sell prospective Buyers on the neighborhood community from first hand experience. In other words, any agent can say, “This is a nice neighborhood with good schools.” However, resident local expert creates more value for Buyers because they’re an integral part of the neighborhood community. For example, they can speak firsthand about their kids’ experiences in the schools, neighborhood traditions, and community culture.
Here’s a case in point: I just sold another home in our neighborhood and the Buyer’s Agent said:
By the way, 2008-9 were two of my best years in real estate because neighbors needed to turn to a trustworthy and experienced local agent to get top dollar for their homes in a challenging market. They understood that hiring the right agent makes all the difference! Call me today if you are thinking about selling your home.
Andy, your Friendly Neighborhood Agent, gets Sellers MORE $$$ and more quickly!