In blogger-friend Scott Sambucci’s recent Altos Research post, he suggests that year over year and non-seasonally adjusted house sales statistics are the most reliable indicators to answer the questions:  What’s happening in the real estate market?  Where  is it headed?
Scott affirms that the “Case-Shiller HPI is a very reliable index … proven over time to accurately reflect transaction prices and housing market trends… but there is a 60 day reporting lag because of using closed transactions”.  One of the slides above affirms to me that Altos Research is a good advance indicator of Case-Shiller!
So where is the national real estate market now?    Scott cautiously points out that nationally “a trough only emerged in 2010 in non-seasonally adjusted prices” in their April 16th data and ” housing supply is on the rise for the first time in 18 months.”  In other words, as a nation, we’re not out of the woods yet nor into a clear sustainable real estate recovery.
From his May 30th slide presentation (above), I deduce a few conclusions:
  • Average home prices for the 10-city Composite reach a low point in January 2009; recovered by early summer 2009; started a downward decline through year end 2009; and started an up-tick again this spring 2010.
  • New delinquencies peaks correlate with market troughs.
  • The most recent up-tick is due to the lower quadrants of the real estate market and not the upper quadrant.
  • Some bubble markets such as Phoenix and Miami are still in trouble.

So is it a good time to be a buyer or a seller?  Well, it really depends on the locality and even the specific neighborhood.  Don’t loose sight of the larger picture, but don’t over-generalize about local conditions.

In the San Jose metropolitan market it is a “buyers market” and market prices are currently relatively stable with a median at about $500K.  Days on the market (DOM) blipped up the end of last year into early 2010 and then declined.  Prices per square foot have been increasing.

Even more locally, in Saratoga, CA 9570 we are seeing the median price drop since the first of the year and inventory, which was dropping is now again on the rise (albiet from a low point);  days on the market (DOM) has peaked and is on the decline again.  It’s a “strong buyers market” (depending on the price point), but conditions do not seem to have strong up or down pull and the real estate market is showing some evidence of slowing recently.  Days on market (DOM) are still relatively high for homes priced above $1.5 million.

If you have local silicon valley real estate market questions or want a valuation of your specific property, please call Rick Bonetti, Alain Pinel Realtors at 408-857-8800.

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