It's no secret that our housing market has turned around -
- The Median Home Price for Santa Clara and San Mateo County grew +30% vs. last year.
- This is the first year-over-year sales increase since 2005, signaling a housing market that is rebounding and poised for further growth.
- At the same time, housing inventory (# of homes for sale) dropped an average of -60% vs. last year.
- Santa Clara County finished 2012 with less than 1 month's supply (.9 or 27 days) for the first time in 13 years (since 1999).
- Sunnyvale and Cupertino are two of the most constricted markets in terms of available properties. Sunnyvale closed the year out with .5 MSI (15 days) and Cupertino came in at .6 MSI (18 days).
- Palo Alto also finished 2012 at .5 MSI (15 days) with a total of only 48 single-family homes available. This is even more compelling when we take into account the fact that 24 properties went under contract and 32 closed escrow in the same month.
- The distressed housing market also thawed, with REO sales declining more than 20% to sales last year.
Don't be surprised if home prices begin to appreciate rapidly. The ratio of homeownership costs to income is at an all-time low, and people are not going to continue renting homes at a monthly cost that exceeds a mortgage payment. Investors and flippers will continue to grow in numbers as they realize housing is the best risk-adjusted return on their money. First-time homeowners, who have been sitting on the sidelines waiting for a sign of the bottom, are hearing about price increases in their desired neighborhood and are rushing to become homeowners. Empty nesters and retirees, who have plenty of equity in their existing home, will buy a home that is more suitable to their current lifestyle, which may or may not include adult children as well as their aging parents.
Your Silicon Valley Housing Scorecard: