SAN JOSE, Calif. -- A home-sales revival that began last year in some of California's cheaper inland areas has begun to spread to several more expensive coastal areas, another hint that devastated real-estate markets in the state -- and other parts of the country -- may see less grim days ahead.
Homes are selling briskly again in the lower end of the market in Santa Clara County, just south of San Francisco, with prospective buyers making multiple offers and bidding well above asking prices. The median sales price of a single-family home in May was $445,000 in the county, up 5.7% from February, when prices stopped dropping.
Santa Clara County is one of several areas around the U.S. where prices have dropped far enough to lure buyers, including investors, back into the market. Other metro areas showing this trend include the northern Virginia suburbs of Washington, parts of Phoenix and San Diego, said Ivy Zelman, chief executive of research firm Zelman & Associates. Even in glutted markets like southern Florida, investors are "gobbling up distressed inventory" in some areas, she added.
New home starts are up, in a market where supply is higher than demand this can only continue to drive prices downward causing further erosion of real estate values. The Bull will ultimately become the Bear:(
The point is that supply is not higher than demand if the inventory is dropping. In Santa Clara County, the inventory is dropping to near normal levels for June. Inventory is currently dropping when inventory is usually building following the spring regular spring buying spree.
I don't know of that much new building in Santa Clara county. I have been watching for it. I just helped one daughter get into a home and have two more. At the current levels, they can now buy.
As the prices drop, people who were reluctant to buy for the last 3 years are taking advantage of the low prices, the $8k federal stimulus AND the $10k California new home buyer credit.
New home construction is the build-out of developments that were started and builders had on the books burning resources.
A couple weeks ago, we looked at a home that just went on the market. We found out that they were going to look at the offers at the end of the second day. 60 people had already gone through and there were 40 offers. All were over the asking price.
There are many people who did not fall for the ARM loans and high prices. Many people aged into the market during the time that homes were not affordable for them. They are now affordable again.
The federal stimulus was a starting-gun that kick started the home buying market.