After crossing the half-million dollar mark in March, the median price of a single-family home in California’s Santa Clara County hit a jaw-dropping $577,820 in April, a real estate trade group reported.
That figure is 7 percent more than the March 2000 median, and 45.2 percent more than last year’s median of $397,850, according to data released by the California Association of Realtors.
“I don’t know what to say. It’s clearly a lot of high-end properties,” that have contributed to the jump in local prices, said Leslie Appleton-Young, the association’s chief economist.
The median price marks the midpoint, meaning half the homes sold for more and half sold for less than the median figure.
And while the total San Francisco Bay Area’s median price climbed 30 percent in April compared to a year ago, the number of homes sold slipped 17 percent from April 1999. The association measures home sales on an annualized basis and does not release the monthly number of homes sold in individual counties.
Real estate experts say the slide in the tech-heavy Nasdaq stock market is one of numerous factors that contributed to a decrease in home sales year-over-year. The recent bout of volatility in the stock market began in mid-March, when the Nasdaq index rose above 5,000, then fell 7 percent in less than a week. The index recently had fallen 37 percent from its peak, before rallying.
In recent months, many Silicon Valley realty agents have said that more homebuyers have been deterred from purchasing homes by their worries about the stock market than by rising mortgage interest rates. In mid-May, the average rate for 30-year fixed-rate mortgage went above 8.5 percent for the first time in five years, according to secondary mortgage market giant Freddie Mac.
Even adjustable rate mortgages, known as ARMs, have risen quickly as Federal Reserve policymakers have been increasing short-term interest rates. Mortgage finance firm Freddie Mac, reported in late May that the average rate for a one-year adjustable-rate mortgage shot up to 7.25 percent, the highest level in nine years.
Appleton-Young attributed the marked decrease in sales activity in California to a variety of factors, among them a relatively limited number of homes for sale, stock market woes, and steadily rising interest rates.
“All of those things together are pushing kind of a transition in the marketplace,” she said.
The association’s forecast for 2000 predicted sales would slow by 8 percent from 1999, when a record 538,000 homes changed hands statewide.
Realtor Richard Calhoun, a board member of REInfolink, the Multiple Listing Service in Santa Clara County, said he believes the red-hot Silicon Valley market has cooled slightly. Since the end of March, the county’s inventory of for-sale single-family homes has risen from just under 900 to more than 1,700, he said, but homes are selling more slowly than in the first quarter of the year.
It’s hard to pinpoint exactly why homes are staying on the market longer, Calhoun said, but anecdotal evidence suggests buyers are feeling more finicky.
“The desirable homes in desirable locations are still going to get multiple offers,” he said. However, “buyers will no longer do anything the seller tells them to do to get the house.”
For California as a whole, Appleton-Young said, “I think we’ll continue to see very, very strong price appreciation over the next quarter . . . the demand-supply imbalance coming to a head, if you will.”
The National Association of Realtors also released April figures which showed sales activity slowing 6.9 percent nationally over last year.
