Want a below-median price bargain on a home in a market where home values are rising by double digits?
Consider buying a short sale or REO in Silicon Valley, CA.
The median price of all single family-homes (resales, short sales, REOs) in Silicon Valley (Santa Clara County, CA) rose 13.6 percent over the past year from $585,000 in August 2011 to $665,000 this August, according to MLSListings, Inc., the multiple listing service for the area.
Meanwhile, the median countywide price for short sales was up only 0.5 percent to just $412,000 during the same period. The REO countywide median price was up only about 4 percent to $438,000, also during the same period.
Bigger bargains in San Jose
In San Jose, CA, which accounts for more than half the county’s sales, the median single-family home price, for all single-family sales, was up even more, 17.5 percent to $575,000, from August 2011 to August 2012. The median price on short sales was dead in the water, $333,500 last August, $390,000 this August.
The median REO price in San Jose actually lost ground, falling from $403,450 to $402,950 during the same period, according to MLSListings, Inc.
Short sales and REOs are bargain priced. In San Jose, the median short sale price was $185,000 less than the overall median, REOs were $172,050 cheaper in August this year. Property condition, location, size of the home and time on the market, as well as other factors, play into the price point differences.
There is a relatively sizable supply of short sales to choose from.
In San Jose, short sales comprise nearly half of the inventory of homes for sale right now, up from one third a year ago. Countywide, short sales comprise a third of the market today.
The number of San Jose short sales fell 26 percent year over year ending in August. Overall (short sales, REOs, traditional sales), home sales in San Jose were down just two percent.
“The short term pattern seems to indicate more inventory coming on the San Jose short sale market,” said James Harrison, president and CEO of MLSListings Inc.
“Fewer homes leaving the market could provide opportunity for short sale buyers in the months ahead,” he added.