No wonder the consumer is confused about where our real estate market is heading. One headline reads “More Foreclosure Activity”, another reads “Home sales up 19% year to year”, and don’t even bother listening to the news because everything is negative, negative, negative!
That is why you need local market information! Thank goodness, you know me!
So here is the local scoop.
Out of 27 zip codes within San Jose:
SIX had an increase in price per square foot in July and August over 2010.
NINE had an increase in median sales price on average 15%! Highest increase by zip? 95112 – downtown with a nearly 23% increase over last year! (#2 Willow Glen, #3 Santa Teresa)
ELEVEN had an increase in volume of sales with 95130 increasing nearly 50% over last year.
Some of you have heard me say it but here it is again; Investors are buying homes. Willing to buy without leverage, all cash because they believe the potential upside is there. With nearly 30% of them paying all cash, it is hard to believe this is the whim of speculators. Consider the fact that your leveraged dollar is now at or below 4% because of interest rates, and that affordability is at a 30 year high for San Jose. There are opportunities for those who truly want a home. You will either be a home owner building equity or you are a renter building equity for these investors.
“Last month absentee buyers – mostly investors – purchased 21.3 percent of all Bay Area homes sold, up from 20.5 percent in July and 17.8 percent a year ago. The peak was 23.4 percent in February this year, while the monthly average since 2000 is 13.8 percent. Absentee buyers paid a median $242,818 in August, up from $240,000 in July but down from $260,000 a year ago.
Buyers who appeared to have paid all cash – meaning no corresponding purchase loan was found in the public record – accounted for 27.5 percent of sales in August, up from 26.3 percent in July and up from 25.6 percent a year ago. The record was 30.5 percent this February, while the monthly average is 11.9 percent since 1988. Cash buyers paid a median $245,000 in August, the same as in July but down from $272,727 a year earlier. – DataQuick”
Here is the link to the August report. Recognize, even a report on the BAY AREA is not a good local gauge. If you have questions about specific neighborhoods, please let me know. I am here to help!
Some more interesting charts for the San Jose area (Click on image to enlarge!)