/Cupertino

By John Dozier .

March real estate sales activity for the greater Cupertino picked significantly in the month of March.  There were 19 closed sales in March compared with 11 for February and 9 in January.  That makes for three successive months of slower than normal sales, but trending in the right direction.  There are currently 55 pending sales, compared with 21 in February.  This is up sharply from last month and recent months.  Pending sales are homes that are under contract, or in escrow waiting to clear inspection and financing contingencies prior to close.  Tougher lending regulations will continue to make it more difficult for borrowers to purchase homes.  There were 155 homes for sale at the end of March, compared with 97 at the end of the February.  The increase of homes for sale is due primarily to increased marketing time to sell, particularly in the price range above $1.5M.   The new administration’s stimulus package will most likely have little affect in the market place here.   If it helps in less affluent areas, then, the news headlines may be a good psychological boost for us all.

Multiple offers, a common event, earlier last year, where homes would often sell above their asking prices, are now a rarity.   In the rare event where there are multiple offers, the buyers are typically coming in below the asking price. The majority of home sales remain in the price range between $700,000 to $1,200,000.  This is where the bulk of the demand is.  As recently as August, there were 4 home sales in the price range above $1,500,000.  This past month there were 3 sales above $1,500,000.  Homes in the upper price range in the Cupertino area are experiencing an average marketing time of 8 months, with price reductions being common.   This past month we did have 2 sales on listings priced above $2 Million.  In both cases the homes sold significantly below asking price, in the range of 8%.

There is now evidence that the market may have bottomed out and is poised for a modest recovery.  Buyers are showing up at open houses in strong numbers.  A significant number of them express that they plan to buy in the next few months.  There are still a contingent of buyers that express the sentiment that prices may dip ever further.   Lending restrictions are now much tougher than they were prior to the recent changes in lending practices.  Lenders are now required to restrict their appraisals to homes that have closed escrow within the past 3 months.  Near perfect credit scores are key in getting loans at reasonable interest rates.  It is imperative now, for Buyers to obtain loan pre-approval before seriously looking for a home. 

Despite the lack of rosy news, the supply of homes remains low by historical standards.  We are experiencing a stabilized supply of homes, but I expect the supply will continue to increase in coming months.  There is still a healthy number of Buyers out there compared with the relatively small number of homes for sale.  The bulk of the buyers tend to be seeking homes that are affordable by our standards, priced below $1.2 Million.  The market trends at the moment would indicate moderation of prices and perhaps short term declines.  Homes priced upwards of $2 Million are tougher to sell.  Knowledgeable astute buyers who choose to act now can take advantage of prime market conditions unique to this area.