The wait for the return to “pre-recession home prices” is over in some Silicon Valley neighborhoods.
However, that pre-recession price has yet to wipe out equity losses homeowners suffer because they purchased at the peak of the market.
Still, the report is good news about the Silicon Valley housing market’s resilience.
When MLSListings.com, Northern California’s multiple listing service, took a look a single-family home prices from January 2005 (pre-recession) to October 2012, it found many homes in four Santa Clara County cities are worth more today then they were in 2005.
“Comparing San Jose real estate with the Campbell, Los Gatos and Saratoga housing markets, it becomes evident that for the most part, we have returned to 2005 home value levels,” said James Harrison, president and CEO of MLSListings Inc.
The big news
In the City of San Jose, the median sale price of single-family homes was $585,000 in October 2012, down seven percent since January of 2005, when the median sale price was $630,000.
During the same period:
• Campbell’s median home price dropped 1 percent, from $697,000, to $692,000.
• Los Gatos’s median home price increased 8 percent, from $1,380,000 to $1,487,500.
• Saratoga’s, median home price rose 23 percent, from $1,416,000 to $1,741,500.
The small print
Remember, the median price represents the point at which an equal number of homes sold for both less and more than the median price. So in all four cities, and others, some home values are well beyond 2005 levels, while others are still playing catch up.
After 2005, home prices skyrocketed to levels beyond where they are today, only to plunge and bottom out, before returning to 2005 levels.
Many homeowners, especially those who purchased homes at the peak of the market, still suffer underwater mortgages – mortgages with balances that are higher than the home’s value.
Bottom line? Patience, if you can afford the wait, is a virtue.
Also, buy low, sell high, not the other way around.
Read more: MLS Listings’ Current Housing Update