South SF Bay to Monterey, CA home prices rise 6 percent to 58 percent on low inventories, low rate-driven demand

housingrecovery

Low inventories are sending prices soaring in the five-county, South San Francisco Bay Area-to-Monterey, CA (SSFBAM) region, which includes San Mateo, Santa Clara, San Benito, Santa Cruz and Monterey counties.

In July, median prices for single-family homes rose, year-over-year, from 6 percent to 13 percent in the SSFBAM region, as more affordable condo prices soared ahead by 18 percent to 58 percent, according to MLS Listings Inc.

Single-family median prices were up most in San Benito and Santa Cruz (both 13 percent) and Monterey 12 percent. All counties experienced double-digit, year-over-year median price increases for condos, with the greatest gains in San Mateo, up 35 percent, and Monterey, up a whopping 58 percent.

During the same year-over-year period, single-family home sales were down in Monterey (-9 percent) and San Benito counties (-16 percent), but up in San Mateo (11 percent), Santa Clara (15 percent) and Santa Cruz (27 percent). Condo sales were down only in Monterey County (-6 percent), flat in San Benito County and up in San Mateo (24 percent), Santa Clara (2 percent) and Santa Cruz (26 percent) counties.

Month-to-month sales, however, dropped in all five SSFBAM counties, for the second month in a row in July, making for a sluggish summer selling season, according to MLSListings.

MLSListings Inc. also reported month-to-month inventories remained flat in all counties, but dropped significantly year-to-year in San Mateo (-38 percent), Santa Clara (-39 percent), San Benito (-33 percent), Monterey (-26 percent) and Santa Cruz (-16 percent) counties

“New listings are barely keeping ahead of closed sales. For buyers and their agents to succeed in this market, they need to be constantly monitoring new listings, including using technology that notifies them instantly once a home comes on the market,” said Barbara Lymberis, president of the Santa Clara County Association of Realtors.

Low mortgage rates are also prompting more buys. The average interest rate on fixed-rate mortgages (FRMs) for 30-year conforming loans for the week ending Aug. 14, rose to 3.79 percent, from last week’s 3.76 percent average, but rates remain well in record low territory, according to the Erate.com Interest Rate Update.

Silicon Valley Close-up

In a separate report from the Santa Clara County Association of Realtors the July 2012 median price of single-family homes in Silicon Valley rose 13 percent to $695,000, up from $615,000 a year ago. Condo prices were up by more, 18 percent, to $385,000 from $325,000 a year ago.

The average number of days on market to sell a single-family home dropped to 43 days this year, compared to 64 days a year ago – a 32.81 percent drop. Condos sold in an average 53 days last month, down from the 81 days in July 2011 – a 34.57 percent decrease.

Already tight inventories for single-family homes for July dropped to 2,460 from the 4,053 of July 2011, a decrease of 39.30 percent. Inventory for condos dropped to 790 from 1,616, a decrease of 51.11 percent.

“The housing market in Santa Clara County is fast and furious and doesn’t show any signs of stopping yet,” said Lymberis, also Keller Williams – Perfect Harmony Properties.

Click the chart to expand and obtain additional data.

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