Q2 Real Estate Report 2014-Silicon Valley

 

Spring is typically a brisk season for real estate, but second-quarter activity in our Silicon Valley region was even busier than usual. Tech-industry workers and foreign buyers catapulted our market activity resulting in high sales prices. Just a few years ago, homes in our immediate counties sold for $1.1 million to $1.7 million; today, those same homes command between $1.5 million and $2.5 million, and they go into escrow as soon as they hit the market. 

High-end homes continued to sell well, with many buyers paying all cash for properties priced at $10 million and higher. An estimated 25 percent of sales in the region were “off-market” – private transactions that never appeared on an MLS.

Off-MLS sales are controversial. While buyers and sellers can avoid the tumult of open houses and bidding wars, a prearranged price can mask a home’s real value. Buyers, for example, may pay well over a homes value just to avoid competition. On the other hand, sellers may settle for a price far below what a home is worth in an off-MLS transaction to avoid the multiple offer situation.

Looking Forward: The third quarter in Silicon Valley looks to be busy, although not as hectic as the second. Homes generally attracted fewer multiple offers in the second quarter than in the first, and we expect that trend to continue.

Defining Silicon Valley: Our real estate markets in the Silicon Valley region include the cities and towns of Atherton, Los Altos (excluding county area), Los Altos Hills, Menlo Park (excluding east of U.S. 101), Palo Alto, Portola Valley, and Woodside. Sales data in the charts below includes all single-family homes in these communities.