Silicon Valley Market Update January 2021

by Sophie Tsang 02/09/2021

 

 

Silicon Valley Real Estate Market January 2021

 

2020 closed out with slightly lower unit sales in the bay area compared to 2019. The market was shutdown from mid March till late May, but rebounded 2nd half of the year. 

 

The home sale activities in 2020 clearly showed how important homes are when everyone is locked into their personal residence. Medium home prices went up as inventory dropped to 15 year low. Many sellers do not want to put homes on market till Covid is over. With the new strain of coronavirus, it may be a couple of more months before we see increase in inventory.

 

With all the 'unprecedented' events, 2020 was also the biggest IPO year. A lot of the companies IPO'ed are based in the bay area, or have heavy ties locally. There is a black out period after IPO before the shareholders can sell. Some fund managers are projecting a few months from now, when stocks can be cashed out, we will see first time home buyers from these companies flooding into the market. We are crossing our fingers that there will be more inventory than there is now.

 

There have been companies moving out of the bay area. There have been people moving out of the bay area because they can work from anywhere. This phenomenon is not new, may be more noticeable now. People who are moving out of Silicon Valley, some are staying in California. Places like Oakland hills, Castro Valley, Santa Cruz, Napa, Tahoe are all popular destinations. Buyers are looking for more living space and more yard space. There are also property owners selling investment properties and doing 1031 exchange to out-of-state properties. We are seeing more longer escrows, sellers want to give themselves more time to find replacement properties knowing the tight deadlines for 1031 exchange transactions.

 

Interest rates are still very low. The low rates have been important factors motivating buyers to get into the market. With every 1% drop in interest rates, it  increases affordability by 8.5%. About 30% of the purchases in recent months have been from first time home buyers. And more of them are buying $1M to $2M properties. It shows the strong job market in the bay area. 

 

 

If you already own a home, and looking to trade up or trade down, but want to buy first before selling. Compass offers a bridge loan services: Compass will front the cost of first 6 month payment for your purchase. Once moved into the new home, I will help coordinate the upgrades/fixes of your existing home before putting it on market. Compass will also front the cost of repairs and updates at no extra charge, this is  the concierge service. These two services have been so critical to get our clients moved smoothly. Not only can you focus on finding your ideal home first, move in, not worry about the burden of 2 payments. The existing home will be fixed up without immediate out-of-pocket cost from you, and sell quicker and at a higher price. Never has it been more critical to move out of the house before selling to eliminate any health risks for you and your loved ones. 

For details on the two services, please go to:

Compass.com/bridge-loan-services/sophie-tsang/

Compass.com/concierge/sophie-tsang/

or give me a call.

 

Due to Prop 19, come April, homeowners age 55 and over can sell and move anywhere in California and transfer their lower tax base to the new property. If you are considering taking advantage of the new property tax rules, please consult your CPA. 

 

Going forward in 2021, the biggest challenge will be low inventory. If anyone you know may consider selling anywhere in the bay area, please call me with their contact information, I will follow up and take great care of them.

 

The following are stats for the last 13 months:

Santa Clara County:

 

 

San Mateo County:

 

 

 

About the Author
Author

Sophie Tsang

Sophie’s Civil Engineering background and marketing expertise contribute to her broad understanding and high efficiency in marketing real estate properties. She has been consistently a top performer since 2005, and personally ranks the highest 1% by volume of all Silicon Valley Realtors. 

As a seasoned negotiator, Sophie’s no-nonsense marketing system and meticulous attention to details have been key success factors. She is known as the The Fixer, frequently helps sellers sell their homes when other agents had failed or given up. She helps buyers get into homes when they previously struggled. 18 years in Real Estate, Sophie has honed her skills on getting the best possible results for her clients. Her trusted network of vendors and use of cutting-edge technology ensure each step of each transaction is executed to achieve next level result!

Sophie has done guest speaking at Faith Radio, and writes a column for World Journal to share her Real Estate Knowledge. She is a proud parent of 2 Eagle Scouts, a Palo Alto Rotarian and a Paul Harris Fellow, also a Golden Gate Keeper (Golden Gate National Park Conservancy).