Low inventories, fast sales, buyers paying more
by Hadar Guibara
Maybe it was all the commotion and preoccupation caused by the holiday season back in December and spilling over into January that turned sluggish the activities of Mountain View home buyers, but by the time the Super Bowl rolled around in February, the home-seekers were back to their predictable ravenous behavior.
Homes disappearing rapidly. Between February and July 2014, Mountain View homes were scooped up faster than in any six-month period in the last four years. Following a lackluster December and January, during which homes spent a combined average of 127 days on the market before being sold, homes in February through July lasted just 74 days — that’s the total averages for all six months combined.
Breaking it down, that means homes stayed on the market an average of 63.5 days in December and January. The individual monthly average for the next six months was 12.3 days. Homes in February never collected dust as they averaged only nine days before being bought.
Buyers are growing more and more motivated to get into these properties. Look at the average days on the market for homes between February and July in 2011 through 2014.
Average days on the market, Feb.-July
2011: 35.0
2012: 23.2
2013: 16.7
2014: 12.3
To further paint the picture, here are the number of new listings that appeared on the market in the same six-month period for each of the last four years.
New listings, Feb.-July
2011: 214
2012: 191
2013: 185
2014: 153
So we see fewer homes coming onto the market and faster sales of the homes that do arrive. This competitive atmosphere is being fueled by a growing number of buyers. We’ve seen a steady increase of qualified buyers from China, India and other countries seeking properties throughout Silicon Valley as either first or second homes or as investments. In Mountain View, buyer numbers have risen further and will likely continue to rise with the expansion taking place at Google and other growing tech entities.
As to what buyers are willing to pay, homes in Mountain View over the last three years have consistently sold at 5 percent to 15 percent above their listing price.
The growth in this trend has been slow but predictable. Most of 2011 saw homes selling for very close to asking price. The percentage paid over listing price moved up in 2012 to 5 percent to 7 percent. The sale price-to-list price ratio continued to widen in 2013, when buyers in every month from March to July paid 10 percent or more above the asking price. So far in 2014, no month saw sold prices less than 8 percent over listing prices; in April and May, that percentage reached 15, the highest in the last four years.
Do these numbers give us a hint of what to expect as we move into fall and winter? It’s impossible to predict the market and seller and buyer behavior, but based on the statistics we’ve explored here, we see three clear trends that we should expect to continue in the upcoming months:
* Fewer homes being listed for sale;
* Homes selling in increasingly short periods of time;
* Buyers willing to pay higher percentages over sellers’ listing prices.
Hadar Guibara is a Realtor with Sereno Group of Los Altos. She can be reached at hadar@serenogroup.com.
