Silicon Valley Market Update July 2022

by Sophie Tsang 07/18/2022

 

 

Silicon Valley Real Estate Market July 2022

 

Market has shifted and it is evident with many price reductions and homes go off the market without selling because sellers have higher expectation. Areas that are near major employers and with good schools are still commanding strong offers. Most homes that are priced well are getting 2 or 3 offers instead of 15 offers like 3 months ago. 

“We’ve squeezed a decade of home price appreciation into a year and a half.” - John Burns Real Estate Consulting. 

The down shift came quick and drastic. Buyers who could qualify for $3M purchase just 3 months ago may be at $2.5M now. Rates do go up and down on a weekly basis, but expected to continue upwards.

Two BIG ITEMS to watch over the next weeks/months are: UKRAINE and CHINA.

1. Russia/Ukraine war has been the biggest accelerator of inflation - by far - as well as a global energy price surge and supply crisis. The longer this war rages, the worse for global markets.

2. China Covid lockdowns continue and will impact global supply chains dramatically. We are addicted to cheap Chinese goods and components. About 20% of our imports come from China. (Marketwatch)

Office occupancy has increased to over 44% already and rising. "I think as you go into a recession and people fear that they might not have a job, that will bring people back to the office," - Stephen Ross, Related (Bloomberg) 

One has to live somewhere usually for around 60 years (from age 20 to 80). And many buyers who are unable to buy due to rising rates or job losses turn to renting, thereby further fueling rent prices and demand. 

When times get uncertain, there is always a flight to quality. With the inventory of buying options rising, focusing on the best quality is always smartest. And now you may have more choices. Buying a quality home for a fair price is always smarter than a bargain price for a bargain. 

As of 2011, no single investor in the U.S. owned more than 1,000 homes. Just five companies own a collective 280,637 homes as of October 2021, adding 76,325 homes to their portfolios between March 2018 and October 2021.

- Invitation Homes: 83,512

- Progress Residential: 71,930

- American Homes for Rent: 56,077

- FirstKey Homes: 35,899

- Amherst Residential: 33,219

When/if institutional investors stop buying single family homes, we could see a spike in more affordable home options for first time home buyers. (contributor - Leonard Steinberg)

Anything Real Estate related, please contact me. I'm happy to help.

 

Santa Clara County last 13 months

 

San Mateo County last 13 months

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 ranks top 1% of all Silicon Valley Realtors, and top 1000 Realtors in the country per World Street Journal Real Trends.

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, or the Miracle Worker, frequently helps sellers sell their homes when other agents had failed or given up. She helps buyers get into homes when they previously struggled. 19 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 is a proud parent of 2 Eagle Scouts. She has done guest speaking at Faith Radio, and written a column for World Journal Newspaper to share her Real Estate knowledge. Sophie is a Palo Alto Rotarian and a Paul Harris Fellow, also a Golden Gate Keeper (Golden Gate National Park Conservancy)