Time to take a hard look at the beginning numbers this year and see what we can tell about the market. For those of you who are not aware, inventory is a big factor in price performance and home values. As inventory increases and buyers are unable to keep up with the supply of homes entering the market, prices begin to fall, as anxious sellers feel the immanent price drops.
Looking at the Cupertino home market this time last year we see big changes in active inventory. Currently Cupertino has 2 times the inventory that it had in the preceding year. You would hope to see that pending sales for the week increasing, but it appears that they are in line with last year’s figures. This may indicate that sellers are holding firm at their prices and buyers are sitting tight waiting for price reductions. If this continues on we can expect the Cupertino home market so see some further price decreases.
Looking at the Santa Clara home market we actually experienced a decline in inventory from last year’s levels. We also see that pending sales for the week are higher than 2008. Santa Clara has seen some significant price drops in 2008, about 10%-15% overall. If this trend continues we can expect to see some stabilization in the home prices in that market.
Looking at the Sunnyvale home market we see some increases in inventory over last year’s levels. We also see that pending sales have also increased. Sunnyvale is a unique market due to the different areas and price ranges. Sunnyvale real estate has low-end markets and markets that reach up into the 1.4 million dollar price range. A more accurate approach would be to see how these submarkets are performing to get a real picture of what is happening in Sunnyvale.
Moving on to the higher-end in Los Altos we see a much larger and more drastic change from last year. Inventory has more than doubled, and sales have dropped more than half. Another indication that sellers are holding firm and prices have not come down enough to reflect real values. We can certainly expect some drops in the Los Altos home market.
Los Gatos is a mixture of high-end and upper middle class housing. Inventory is certainly higher but not double in number over last year’s figures. Also sales for the month have not increased over last year’s levels. This is another market were you should look inside to be able to tell the real story of whats going on in the different submarkets. Either way with inventory increasing and sales staying roughly the same, expect more price drops in Los Gatos.
It’s already starting out to be a busy year in real estate based on the number. Sales are up overall as buyers are cashing in on good deals. Stay tuned for the next update.