Market News

With the election behind us, we can now fully focus on our local real estate market's developments. The Federal Reserve's mid-September rate cut has already shown its impact on our October numbers, giving us valuable insights as we compare October 2024 to October 2023 

Let's explore what these trends mean for our neighborhoods and community members.

Market Activity & Sales Volume 
Our communities are showing remarkable vigor in sales activity, with many areas experiencing noteworthy increases. Sunnyvale and Mountain View have both seen a wonderful 42% uptick in sales volume. Atherton, known for its prestigious estates, has demonstrated particular strength with a 55% increase in sales. However, some areas like Menlo Park have taken a more measured pace, with a 23% decrease in sales volume – a reminder that each neighborhood moves to its own rhythm.

Price Trends & Community Value 
The story of home values in our area continues to reflect the desirability of Bay Area living. Atherton's median prices have grown by an impressive 19% to $8,665,000, while Palo Alto has seen a healthy 14% appreciation. Some communities, like Redwood City and Menlo Park, are experiencing price adjustments.

The Speed of Our Market 
One of the most interesting aspects of our current market is how quickly homes find their new owners. Most of our communities see properties move swiftly, with many cities reporting less than 11 days on the market. Sunnyvale continues to show particular appeal, with homes selling at 113% of the asking price.

What This Means for Our Community 

These trends paint a picture of a market that's evolving but fundamentally strong. The fact that homes continue to sell above the asking price across all our communities speaks to the enduring value of Bay Area living. The varied trends we're seeing – from Atherton's longer market times to Sunnyvale's quick sales – remind us that real estate is always local, and each community has its unique characteristics and opportunities.

As we approach the holiday season, last week's additional 0.25 point Fed rate cut could bring extra cheer to our market. This second rate reduction in just three months could:

• Energize our traditionally quieter December-January period
• Create opportunities for both buyers and sellers through year-end
• Set the stage for an active start to 2025

Whether you're considering buying or selling, these market conditions and recent rate cuts create unique opportunities. As your local market expert, I'm here to help you navigate these evolving conditions and understand how they might align with your real estate goals.

Remember, behind every sale is a family's story, and I'm here to help write the next chapter of yours in our wonderful Bay Area community.

Connect with Wendy at [email protected] for personalized insights and strategies to make the most of our current market conditions.

The Fed doesn't set mortgage rates. Powell controls the Fed rate aka the Prime rate. Mortgage rates are tied to the yield on the 10 yr treasury. The yield goes up, mortgage rates go up. The yield drops, the rates drop. Robust economic data and deficit worries are among the factors behind the recent rise in the 10-year Treasury yield. Traders are also growing concerned that central bank policymakers may be less inclined to reduce rates, even after the Fed had forecasted another 50 bps of trimming before the year end at the September meeting. Lenders set rates based on anticipation of where the rates are heading after reviewing current economic data. A robust economy, strong job market, inflation trending down, doesn't appear to support the case for a rate cut at the next Fed meeting.

• Where mortgage rates go from here: Many forecasts have rates near 6% at the end of this year and falling to about 5.8% next year. If we are lucky maybe we get to 5.5%
• What to do now? Is it better to wait for mortgage rates to fall, or start looking now? Experts advise against trying to time the market — including when it comes to buying a home. That's for two reasons. First, if you buy a home and then mortgage rates do fall, you can refinance your mortgage and take advantage of the lower rate. Second, if you wait and rates go up, it just gets harder to afford a home.
• How's the housing market looking? The number of homes for sale in September was 6.4% higher than a month earlier and 33.6% above a year ago. The median home price has risen about 50% over the last 5 years. 

Bottom Line 

Despite a Federal Reserve interest rate cut, mortgage rates have unexpectedly risen, complicating the home-buying landscape. While rates are still lower than last year, experts predict stabilization around 6%, with some potential for fluctuation. Increased inventory and slowing market dynamics offer buyers a better chance, but high home prices remain a significant challenge. Buyers are advised against waiting for ideal rates, buy now and refinance later.

Guest constributor
Risha Kilaru

SVP of Mortgage Lending, OriginPoint 
Compass Affiliated Business
[email protected]
www.RishaKilaru.com
O: (510) 338-7034
C: (510) 209-7374

As Santa Clara County experiences unseasonably warm weather with temperatures in the 90s, our real estate market is showing signs of its own gentle warming trend. The recent Federal Reserve rate cut has added a new dimension to our evolving market, prompting both buyers and sellers to reconsider their plans. Let's explore the current trends and their meaning for our local community.

Market Dynamics
Year-to-Year Sale Volume
While sale volume has cooled year over year, with seven out of ten cities showing a decrease compared to September 2023, there's a silver lining. Recent weeks have brought an uptick in open house attendance, suggesting a renewed interest from potential buyers in our neighborhoods.

Price Resilience
Our local market has shown impressive strength. Despite the earlier slowdown in sales, median home prices have remained robust, with eight out of ten cities seeing increases. Los Altos Hills led the way with a remarkable 52.68% jump, highlighting the enduring appeal of our communities.

Bidding Conditions and Market Speed
The spirit of competition is still alive in our market. Most cities are seeing homes sell above the asking price, with Sunnyvale leading at 113% of the list price. Meanwhile, well-priced homes are moving quickly, with six out of ten cities reporting faster sales.

Looking Ahead
The recent surge in open house attendance is an encouraging sign for our community. Coupled with the Fed's rate cut, we could see more vibrant activity in the coming months. If additional rate cuts follow in November and December, it could open doors for many families dreaming of homeownership or looking to make a change. This potential for increased activity could lead to more sales, continued strength in home prices, and exciting opportunities for both buyers and sellers in our area.

As we look towards the winter months and into 2025, Santa Clara County's real estate market promises to keep us on our toes. Whether you're considering buying your first home, upgrading to accommodate a growing family, or considering downsizing, opportunities are on the horizon.

Remember, having a knowledgeable local guide in this dynamic market can make all the difference. As your neighbor and realtor, I'm here to help you navigate these changes and find the best path forward in your real estate journey. Let's work together to make your housing dreams a reality in our wonderful community.

The Federal Reserve, led by Chair Jerome Powell, recently lowered interest rates and hinted that more cuts might be coming. But don't expect rapid changes - they're taking a careful approach. The Fed cut rates by half a point, which is more than usual. This is a shift from fighting high prices to supporting jobs. They're not making emergency cuts but rather adjusting their approach. More rate cuts are likely this year, but they'll probably be smaller and spread out. The Fed is watching how the economy responds before making big moves.

The next jobs report could be important. If it shows the job market is struggling, the Fed might consider bigger rate cuts. Different Fed officials have different views. Some want quicker cuts, while others prefer a more cautious approach. Even if there is going to be more rate cuts, it will likely happen gradually over time. The Fed is trying to balance keeping the economy strong and prices stable. They're watching closely and will adjust their plans based on the economy's performance in the coming months.

The Silicon Valley real estate market continues to evolve, and data from August 2023 to August 2024 shows interesting trends. Let's examine the key findings across several cities in the region.

Home Sales Volume
Most cities saw a decrease or stagnation in the number of home sales:

• Atherton experienced the most significant drop, from 12 sales to just 4. 
• Palo Alto, Mountain View, and Redwood City also saw decreases.
• Cupertino and Sunnyvale maintained the same number of sales.
• Los Altos and Santa Clara bucked the trend with slight increases.

Median Prices
Median home prices showed mixed results:

• Atherton saw a dramatic increase, nearly doubling from $8.2M to $16.1M.
• Menlo Park, Cupertino, and Sunnyvale also experienced notable price increases.
• Los Altos was the only city to see a decrease in median price.
  
  

Sale Price to Original Price Ratio
Most cities maintained or increased their sale-to-list price ratios:

• Atherton reached 100%, up from 94% the previous year.
• Sunnyvale showed the highest ratio at 111%, indicating strong demand.
• Los Altos Hills was the only city to see a significant decrease, from 106% to 96%.

Days on Market
The average time homes spent on the market varied:

• Atherton saw a significant decrease from 105 to 60 days.
• Los Altos Hills experienced a sharp increase from 17 to 56 days.
• Other cities showed minor fluctuations, with most staying within a week of their previous year's average.
  
  

Key Takeaways

The luxury market in Atherton shows some volatility, with fewer sales but much higher prices. Most cities are seeing steady or increasing prices despite lower sales volumes, suggesting continued strong demand. Homes are generally selling at or above asking price, indicating a competitive market. The time homes spend on the market remains relatively stable in most areas, with a few exceptions.

Overall, the Silicon Valley real estate market remains robust, with high prices and competitive buying conditions persisting across most cities. However, the decrease in sales volume in several areas might indicate a slight cooling or potential inventory constraints. As always, local factors play a significant role, and as a local realtor, I'm here to guide you on the various markets. 

As we move into the latter half of 2024, the latest macroeconomic data paints an encouraging picture for the U.S. economy. With inflation cooling off and the Federal Reserve's anticipated cut of interest rates in the upcoming months, we can expect these factors to inject new life into the housing market for the remainder of the year.

As a realtor, I've seen my fair share of market ups and downs, but 2024 is shaping to be a uniquely challenging year for buyers and sellers. Many of my clients are feeling stuck - buyers are grappling with affordability issues, while sellers are hesitant to give up their low mortgage rates. But it's not all doom and gloom! I'm seeing some encouraging signs that things might be starting to shift.

Federal Reserve Chair Powell's recent statement that the "time has come for policy to adjust" has sparked discussions about potential rate cuts. Market predictions suggest a high likelihood of a 0.25% rate cut on September 18th, with some speculation of a larger 0.50% cut. 

Projections indicate a possible total 1% rate reduction by year-end, with further cuts anticipated through 2025. The Personal Consumption Expenditures Price index, a key inflation indicator, has slightly decreased, dropping to 2.8% from 2.9%. 

Looking ahead, I'm cautiously optimistic. While rates are still high compared to what we saw during the pandemic, it's a move in the right direction. My advice to clients? If you're thinking of buying, start preparing now. Work on your credit score, save for a larger down payment, and get pre-approved. For sellers, consider making strategic upgrades to stand out in a market where buyers have become increasingly picky. And remember, whether you're buying or selling, working with a knowledgeable realtor can help you navigate these tricky waters. The market may be challenging, but with the right approach, opportunities can still be found.

Ready to work together? Let's chat over coffee. Email Wendy at [email protected] for an initial consultation.

Posted on September 05, 2024

California homeowners note that significant changes are on the horizon for home insurance in our state. By the end of 2024, we'll see the largest insurance reform in three decades. Here's what you need to know:

New Regulations: Insurance Commissioner Ricardo Lara has proposed changes to Prop 103, which will be implemented by December 2024. These changes aim to provide homeowners with more options.

Market Flexibility: Insurers will have more freedom in setting rates and using modern risk modeling. In return, they must increase coverage in wildfire-prone areas and offer discounts for homes with wildfire mitigation features.

Action Required: Start "hardening" your home against wildfires now. Early adopters may get priority for new policies when changes take effect.

Community Focus: Experts emphasize community-wide hazard mitigation, though funding remains challenging.

Tech Innovations: New tools are in development, including an app to help document home mitigation efforts for insurance applications.

These changes aim to bring stability to the market and encourage insurers to return to writing new policies in California. While challenges remain, the future looks brighter for homeowners seeking insurance options and building more resilient communities.

Stay informed and consider starting your home hardening efforts now to be prepared for these upcoming changes.

Advice for Homebuyers

Given these upcoming changes and current market conditions, here's some essential advice for homebuyers:

1. Consider Insurability: When house hunting, factor in the property's insurability. Look into claims history and potential natural disaster risks, especially in wildfire-prone areas. Consult an insurance broker before putting in an offer. 
   
   
2. Budget for Home Hardening: Start thinking about "hardening" your future home against wildfires—budget for these improvements.
   
   
3. Research Local Markets: Real estate trends can vary significantly between neighborhoods. Look at recent sale prices and consider future development plans that might affect property values.
   
   
4. Understand Your Finances: Get pre-approved for a mortgage and factor in potential rate changes. Consider how insurance costs might change under the new regulations.
   
   
5. Think Long-Term: Consider your future needs and the home's potential for improvement. Look for properties with good bones that will suit you for years.
   
   
6. Work with Professionals: Engage a buyer's agent familiar with local insurance issues. Get a thorough home inspection.

Remember, buying a home is a significant decision. Take your time, research, and don't hesitate to seek professional advice. With careful planning and consideration, you can make a sound investment in your future home.

Ready for a chat with Wendy? Feel free to email her at [email protected] to set up an initial consultation. 

Posted on September 05, 2024

As a Realtor, I've been fielding many questions about the recent changes in our industry following the National Association of Realtors (NAR) settlement. If you plan to visit open houses or start your home-buying journey, this post will help clarify what to expect and how to navigate these new waters.

Open Houses: To Sign in or Not to Sign in?

You might notice varying protocols at open houses these days. Some brokerages ask visitors to sign in, while others don't. So what's the deal?

The California Association of Realtors has introduced a disclosure form for open houses. Here's what you need to know about it:

It's not mandatory: You don't need to sign in to enter an open house. (However, as a courtesy to the seller, you might be asked to sign in.)

Purpose: The form clarifies the agent-visitor relationship and how information is handled during the open house.

Key points:

• It covers aspects like non-representation and information sharing.
  
  
• It addresses disclosure of representation in case of an offer scenario.
  
  
• It clarifies that a written agreement should be in place if representation is needed.

Remember, this form serves a disclosure purpose, asking visitors to acknowledge that they understand the information provided. It is not intended to establish a client relationship.

Common Questions from Open House Visitors

Q: Do I have to sign a buyer agreement to tour a property?

A: If you are visiting an open house independently and not seeking any representation, you do not need to sign a buyer agreement. If you are asking more specific questions or seeking advice beyond what's available on public websites and MLS, you might be asked to sign a buyer agreement. If you are requesting to tour a home with a real estate professional, either in-person or virtually, you'll be asked to enter into a written agreement before touring the home.

Q: What types of buyer agreements are there?

A: There are several types (non-agency, one party, non-exclusive, and exclusive), each defining different working relationships. It's crucial to discuss these with your broker and choose one that suits both parties.

Q: What if I need more information or would like a copy of the disclosure package for the property?

A: Your request will be forwarded to the listing broker, who can assist you with that information.

Navigating the New Landscape: My Advice

• Start with open houses: If you're beginning your search, visit open houses to get a feel for the market and establish your preferences, wants, needs, and priorities.
  
  
• Interview brokers: Once you have a good sense of your requirements, talk to several real estate professionals. Understand their services and how they align with your needs.
  
  
• Discuss compensation: The fee is not set by law, NAR, or CAR; it is negotiable with each brokerage firm. It's an essential part of
  establishing a working relationship.
  
  
• Consider a trial period: Look for an agreement that allows for a trial period before committing long-term.
  
  
• Ask questions: If anything about an agreement or disclosure form is unclear, ask for clarification. We're here to help you understand the process.
  
  
• Stick to one agreement and disclose representation: Avoid signing multiple agreements simultaneously. You don't want to end up with overlapping agreements and be responsible for the fees for more than one broker. If you've signed an agreement with a broker, disclose this when communicating with other real estate professionals. This will maintain transparency and help avoid potential conflicts or misunderstandings.
  As a buyer broker, my role is to guide my clients through this process, ensuring they are informed and comfortable every step of the way. These new changes might seem daunting, but they're designed to provide more transparency and protection for all parties involved.
  
  

Remember, the key to a successful homebuying experience is open communication. Don't hesitate to ask questions or express your concerns as you navigate this exciting journey!

Ready to work together? Let's chat over coffee for an initial consultation. You can email her at [email protected]

Posted on August 30, 2024

If you're a California homeowner aged 55 or older, you'll want to pay attention to Proposition 19, which took effect in 2021. This new law significantly changes how you can transfer your property tax base when moving to a new home. Let's look at how Prop 19 differs from the previous Propositions 60 and 90.

Key Changes for Seniors:

Statewide Transfers
Under Props 60 and 90, you could only transfer your tax base within your county or to a select few participating counties. Prop 19 allows you to move anywhere in California and take your tax base with you.

Multiple Transfers
Props 60 and 90 permitted only one transfer in a lifetime. Prop 19 allows up to three transfers for seniors.

Home Value
Previously, your new home had to be of equal or lesser value. Now, you can buy a more expensive home and still benefit from an adjusted tax base.

Time Frame
You now have two years before or after selling your old home to buy a new one and transfer the tax base, increased from the previous one-year window.

Expanded Eligibility

Prop 19 extends these benefits to victims of wildfires and natural disasters, as well as seniors and severely disabled individuals.

What This Means for You:

Proposition 19 offers more flexibility and options for seniors looking to move. Whether you're downsizing, moving closer to family, or seeking your dream retirement home, you can now do so without facing a drastic increase in property taxes. However, it's important to note that Prop 19 also changed rules about inherited properties, which might affect your estate planning.

As always, consult a qualified tax professional or real estate attorney for personalized advice on how these changes affect your situation.

Proposition 19 represents a significant shift in California's property tax landscape for seniors. By understanding these changes, you can make more informed decisions about your housing options in your golden years.

(Legal Disclaimer: The information provided is for general informational purposes only. It should not be misconstrued as legal advice. Every real estate transaction and situation is unique, and the application of these new practices may vary. For questions specific to your unique situation, it is strongly recommended that you consult a qualified real estate attorney.)

Ready to move for your golden years? Connect with Wendy at [email protected]

Posted on August 08, 2024