/Cupertino

Cupertino Real Estate Sales Consistent but Level

September real estate sales activity for the greater Cupertino continued at a slightly increased pace following the month of August.  There were 59 closed sales in September compared with 55 for August and 65 in July.  Sales are at normal levels for the early fall following several successive months of slightly higher sales activity.  There are currently 63 pending sales, compared with 71 in August.  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 116 homes for sale at the end of September, compared with 121 at the end of the August.  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 stabilize at current levels.

Multiple offers, a common event, earlier last year, 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 59 closed sales in September, 53 sales were below $1,300,000.  This is where the bulk of the demand is.  In September there was only 1 home sale in the price range above $1,500,000.  In August there were 4 sales above $1,500,000.  This past 2 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 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 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.