/Cupertino

By John Dozier

October real estate sales activity for the greater Cupertino continued at a pace consistent with recent months.  There were 41 closed sales in October compared with 59 for September and 55 in August.  Sales are at normal levels for the early fall following several successive months of slightly higher sales activity.  There are currently 74 pending sales, compared with 63 in September.  This is down moderately from recent Spring activity.  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 82 homes for sale at the end of October, compared with 116 at the end of the September.  The number of homes at current inventory levels would indicate a stabilized market.  If current inventory levels hold steady for the coming holiday season, home prices should remain stable at current levels.

Multiple offers, once a common event, where homes would often sell above their asking prices, are now a rarity.   In the uncommon 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 of $700,000 to $1,300,000.  Of the 41 closed sales in October, 31 sales were below $1,300,000.  This is where the bulk of the demand is.  In October there were only 5 home sales in the price range above $1,500,000.  In September there was only 1 sale above $1,500,000.  This past 3 months there were no closed sales above $2,000,000.  Luxury home sales have been anemic for most of the year.  Home owners of the upper price range homes in the Cupertino area are experiencing a very different market than their peers in the lower price range.  The average marketing time for the upper price range is approximately 9 months, while the marketing time for homes in the lower range is 30 days or less.  Average time on market for all homes is currently at 56 days.  This statistic can be very misleading, depending on which end of the price range your home happens to be.   There may be some relief in sight for the higher priced homes, as a few major lending institutions have now fallen in line with a recently announced loan program by BofA offering new “super jumbo” loans up to $4,000,000 loan amount at competitive rates just a fraction above the rates of regular jumbo loans ($729K loan maximum).  

There is now solid evidence that the market bottomed out earlier this year 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 is 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 2 to 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.