Thursday, August 26, 2010
Monthy Statistics by John Dozier
Cupertino Real Estate Sales Steady, but at Relaxed Pace
July real estate sales activity for the greater Cupertino continued at a comparative relaxed pace following a brisk month of June. There were 55 closed sales in July compared with 76 in June. Sales are at normal levels for the late summer following several successive months of higher sales activity. There are currently 65 pending sales, compared with 71 in June. This is down moderately from recent Spring activity. Pending sales are homes that are under contract, or in escrow waiting to clear inspection and financing contingencies prior to close. Tougher lending regulations will continue to make it more difficult for borrowers to purchase homes. There were 156 homes for sale at the end of July, compared with 149 at the end of the June. The number of homes at current inventory levels would indicate a stabilized market. If current inventory levels hold steady for the coming fall season, home prices should stabilize at current levels.
Multiple offers, a common event, earlier last year, where homes would often sell above their asking prices, are now a rarity. In the uncommon event where there are multiple offers, the buyers are typically coming in below the asking price. The majority of home sales remain in the price range of $700,000 to $1,200,000. Of the 55 closed sales in July, 37 sales were below $1,200,000. This is where the bulk of the demand is. In July there were 4 home sales in the price range above $1,500,000. This past month there was just 1 home sale that closed above $2,000,000. Luxury home sales have been anemic for months. Home owners of the upper price range homes in the Cupertino area are experiencing a very different market than their peers in the lower price range homes. The average marketing time for the upper price range is approximately 9 months, while the marketing time for homes in the lower range is less than 30 days. Average time on market for all homes is currently at 34 days. Average closing price expressed as a percentage of list price is currently 99.33 percent. Compare this to the month of June which was 101.38 percent. These statistics can be very misleading, depending on which end of the price range your home happens to be.
Buyers are showing up at open houses in strong numbers. A significant number of them express that they plan to buy in the next few months. There is still a contingent of buyers that express the sentiment that prices may dip even further. Lending restrictions are now much tougher than they were prior to the recent changes in lending practices. Lenders are now required to restrict their appraisals to homes that have closed escrow within the past 2 to 3 months. Near perfect credit scores are key in getting loans at reasonable interest rates. It is imperative now, for Buyers to obtain loan pre-approval before seriously looking for a home.We are experiencing a stabilized supply of homes, but I expect the supply will continue to increase in coming months. There is still a healthy number of Buyers out there compared with the relatively small number of homes for sale. The bulk of the buyers tend to be seeking homes that are affordable by our standards, priced below $1.2 Million. The market trends at the moment would indicate moderation of prices and perhaps short term declines. Homes priced upwards of $2 Million have plenty of competition and are tougher to sell. Knowledgeable astute buyers who choose to act now can take advantage of prime market conditions unique to this area.
