How to Adapt to a Shift in
Silicon Valley Real Estate Market
How Should Home Buyers and Sellers
Deal with the New Market Trends
@ SFOResidentialHomes, 2018
June and July market data confirms what we’ve known for a couple of months: The hot sellers’ market in Silicon Valley is cooling down. The explanation is quite simple.
For those who put their property for sale on the market earlier this year, the lack of inventory at that time almost always guaranteed them multiple offers. As a result, sales prices reached record high levels in certain areas. Then neighbors of these lucky owners started to put their properties for sale hoping for the same good deals. Unfortunately, these sellers broke the circle of the low supply guarantying higher selling price. This new inventory led to increased selection which quickly translated into lower selling prices.
Just to clarify, home selling prices in Silicon Valley are still very high but they have slowly started to decrease since early June. In other words, the residential real estate market is cooler, but still hot enough. Consequently both home buyers and sellers need to adapt their expectations and their strategies.
Sellers, Time to Adjust!
The anything-goes list-price does not apply systematically any more. The most relevant adjustments sellers need to make in this market is in setting the right price and having realistic expectations. When pricing a home, current market conditions currently play a more important role than comparable properties sold. I expect that home sellers are likely to receive offers within a tighter range of asking price.
Buyers, Stay Active and Realistic!
Higher inventory levels are not only giving buyers more choices, but it also gives them more a leverage on price and terms. Whenever sellers face competition, they are prone to be more flexible. However, keep in mind that the market still favors sellers. Prices are still relatively stable and multiple offers are still happening, just at a lower frequency. Making an offer under or at asking price is still not a good strategy.
To wrap up, the real estate market shift has given buyers a little relief but sellers are still getting good prices. It’s a good time to be in the market for both buyers and sellers providing you have the right expectations!