Bay Area Housing Market Update - Buyer's Guide [January 2021]
In today’s difficult world a lot of people have a critical need for a new home, but they don’t know where to start. It is still possible to find a good home in today’s market, but it requires determination and commitment.
Let’s look at why buying a new home is such a demanding project here in the Bay Area:
- Supply is steadily declining – 42K homes were listed for sale in Santa Clara and San Mateo Counties in 2005; but only 24K homes were available for sale in 2020, a 45% drop.
- Demand, meaning competition, is high – in 2020 half of the homes on the market were sold in 9 days or less, an indicator of unquenchable housing demand. Multiple offers are commonplace and homes that are best prepared and best marketed sell above asking price; sometimes WAY above asking price.
- Competition for homes is intensified by record low interest rates. Freddie Mac has conducted weekly interest rate surveys since 1971 and the current rates are the lowest recorded. Back in July of 2020 the rates dropped below 3% for the first time in the history of the survey and are staying in the 2.7 to 2.8 percent range at the time of this video.
All these factors are driving home prices up and today they stand at an all-time high. 2020 median home sale price in Silicon Valley was $1,275,000, in 2009 the median home price was $503,000. It represents a 153% increase from the bottom of the market.
People don’t move for no reason. In order to succeed, you need to be motivated to put all the necessary work into finding your home. Sometimes it takes a few weeks, sometimes it takes a few months or even longer. We are committed to working with you and supporting you through your entire home searching journey. Every one of our clients has different success story and yours will be different and unique in its own way.
Here are some real home buyers’ stories:
- A Mountain View home was put on the market the week before Election Day and set an offer date for two days after the polls closed. We took our client to see this home and he liked it and was ready to make an offer. As soon as we knew that our client liked the house, we approached the seller and asked if they would review a preemptive offer. Worried about the uncertainty of the elections, they agreed, and we were able to secure this home for our clients with no competition from other potential buyers.
- On another occasion, we showed our client a home in Santa Clara that was on the market for almost 3 weeks. It was not well prepared for sale. The owner was living in the house 3-4 days a week and decided not to do any preparations and not to stage it. The marketing pictures showed dark empty rooms. In reality, it was a great house. Our client liked the location, the floor plan and the yard. We brought a designer who quickly produced a proposal for upgrades and a contractor to provide cost estimates. Again, without competition from other buyers, we were able to negotiate the price way below asking and close the deal.
- Once we brought our client to see a home that was “coming soon” to the market. We were able to get in to see the property just 3 days before it was listed publicly. The location and schools were exactly what our client was looking for and they were ready to move fast. We reviewed the disclosures with them and put together an offer that same day. Our clients were preapproved by a reputable local lender and had all the necessary preparations done ahead of time. Moving fast, we were able to get this home for our clients even before other potential buyers had a chance to learn about it.
- Sometimes there is no way around the competition. To make your offer stand out, you need to learn the seller’s needs like close of escrow timing, 1031 exchange plans or accommodating the seller with rent back. On a house in Los Altos, the owner was interested in rent back and our clients gave the seller 2 months to stay in the house free of charge. That was the part of the offer that won that house for our clients.
- Market shifts always present opportunities for the buyers. We keep eyes on the market and update all our clients so they can take advantage of the changing situation before everyone else.
Your story will be different, and you have to be prepared to write it, to accept it, and to act on it:
- Get your finances ready – we can connect you with best local lenders and help you get preapproved.
- To be able to make buying decisions fast, you need to learn home values, locations, and neighborhoods. We will help you see as many homes as possible and provide you with information about recent sales. And nothing can replace your own experience.
- Know your priorities. You can paint the house with a different color, but you can’t change the shape of the lot. You can upgrade the bathroom, but you can’t change the direction of your windows so they face the morning sun. You can even add another bedroom or a bathroom, but you can’t move the house to a different school district. Do not compromise on your most important requirements.
- Making the right choice and buying the right house will add hundreds of thousands of dollars to your equity over the years. So choose wisely, and work with a professional. Get connected with a local real estate agent to be your trusted advisor. We will provide you with all available data and will share our experience with you to help you make the best decision.
- Together with you we will monitor the market all the time, keep our eyes open to find opportunities and secure a great home for you.
We work with only a small number of buyers at a time to be able to provide our 5-star service. Call us or text us so we can start on your home searching journey together.