Happy Holidays to you all!
Here are the 2010 Market Statistics for Santa Clara County through October and my 2011 Forecast .
As I predicted in my previous reports, we are now seeing the year-end pickup in activity which is being buoyed by the mounting positive economic news in the US and corresponding stock market upswing. As an indicator of overall improvement in the San Francisco Bay Area’s real estate market in comparison to 2009.
I am now forecasting a 12% increase in overall sales volume for 2011 over 2010. I anticipate that prices will remain mostly flat/stable with a 3-5% plus or minus variation depending on specific market areas, the rate of continued momentum in the economic recovery and other variables such as the Euro’s handling of its debt crisis. Overall, I expect that we will see an improved market in 2011 and we are now heading into the final stage of 2010 with headwinds that have more substance than the mostly government backed stimulus that drove the increased sales at the end of 2009.
From my family to yours, we wish you a very happy holiday season and a prosperous and peaceful 2011
Ginna, John and Claire
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Please find the most updated Market Dynamics statistics. These statistics are for Single Family and Condo/Townhomes in Santa Clara County.
Here are some highlights to pay particular attention to as you review the data/graphs through October of 2010:
1. Median Price- The Median price clicked up in Santa Clara County and ended the month of October at $535,000, up from $520,000 in September. The SCC Median reached its low point in March of 2009 at $415,000. Over the past two weeks, we have seen a resurgence of sales activity including some higher end offers and sales between $2 and $5M+ in our market areas. This, coupled with the increased pending sales activity in October/November will likely lead to a fairly steady Median price range as we close out 2010. December 2009 ended with a Median Price of $500,000 and I am right in line with my projection for a year end Median of $525,000 in SCC.
2. Supply&Demand (Units)- We continue to see a significant distinction as we compare October 2008 with 2010 in each of the following categories; For Sale (supply/inventory), Under Contract (pending sales) and Sold (closed escrows). To illustrate when we compare 2008 with the same month in 2010 we see the following- For Sale properties/supply continues to remain significantly: down 27.7%. The number of under contract properties (pending sales) continues to remain- up 34.7% and the sold/closed escrows remain up 27.4% . The general pattern and direction of this market for the past 12-18 months continues to be the same story; declining overall supply/inventory, increasing new sales and closed escrows.
3. Month’s Supply of Inventory & Days on Market The overall Months Supply of Inventory (months of inventory available based on the total existing supply divided by the rate of sales) is at the lowest point over the past two years at 2.8 months supply at month end (which is down from 4.0 months supply in September 2010 and 3.4 months in October 2009). This is down from a 2 year peak of 14.2 months in January of 08. Days on market has averaged between 45 and 60 days for the past 7-8 months and has increased over the past three months to nearly 70 days on market average.
4. Sales Absorption- The Absorption metrics have been consistently compelling with the comparison of October 2008 vs September 2010 with under contract properties up 72.24% and closed/sold escrows up 61.58%. 22.5% of the active properties/listings were under contract as of October 2010, up from a final figure of 17.4 percent in September of 2010.
The first half of 2010 was significantly stronger than the same time period 2009. We had a slight slowdown over the summer months of this year which is not all that uncommon from a seasonal perspective. This slowdown, however, did correspond with some global economic concerns mainly surrounding the Euro and resulted in a temporarily declining stock market in the US. The past several weeks have seen renewed confidence, and signs of hope that the economic recovery is picking up momentum. The DOW has responded and has mostly remained above 11,000 most recently and the past two days has climbed above 11,300. This is been powered by positive developments and reports mainly in areas of employment, retail sales and real estate. Two Bloomberg articles* posted today highlight the factors leading the reasons for increased optimism which is also driving up the US and Bay Area pending sales activity as we close out 2010.
*Bloomberg: Stocks Gain, Treasuries Fall, on Retail, Home Sales Data; http://www.bloomberg.com/news/2010-12-02/asian-stocks-rise-set-for-best-gain-in-a-month-dollar-commodities-climb.html
*Bloomberg: Pending sales of US existing houses jumps a record 10% in October, indicating the industry at the center of the last recession is stabilizing as the job market improves; http://www.bloomberg.com/news/2010-12-02/pending-sales-of-existing-homes-in-u-s-increased-a-record-10-in-october.html
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