Encouraged by rising home prices, more sellers are coming to market in Santa Clara County.
Santa Clara County has seen its active inventory almost double in the first four months of 2013, moving from 571 single-family homes and 149 condos in early January to 1,013 single-family homes and 258 condos in early May.
While inventories remain relatively low, this is a traditional spring supply increase as move-up, move-down or move-out-of-town home sellers position themselves to sell their home and close escrow from June though early August.
Home sellers and home buyers want their kids to complete the current school year in their existing school and start anew in another school, if necessary, after the move.
The median price for single-family homes rose from $660,000 in January to $735,000 in March, the latest numbers available from MLSListings.com, the multiple listing service for Silicon Valley and surrounding northern California.
Condo prices rose from $425,000 to $446,050 during the same period.
In addition to the equity boost from the more than 11 percent increase in the median single family home prices and the 5 percent increase in the median condo price, low mortgage rates make a difference for move-up buyers.
For example, a homeowner who owns a property worth $600,000 with a 30 year fixed rate mortgage (FRM) of $400,000 at a 5 percent interest rate pays about $2,147 per month in monthly mortgage payments – principal and interest only.
Moving up by $200,000 in sales price and mortgage balance at today’s low 30-year FRM rate of 3.5 percent, gives the homeowner a $2,694 monthly payment – an increase of about $547 per month.
A $200,000 more expensive home in most Silicon Valley markets can be a dramatic change in the type of home, size and neighborhood.
Low-interest rates also give move-up buyers the opportunity to save on their monthly payment, if they buy a less expensive home and the interest rate reduction is large enough.
The increase in the number of active listings may not be enough to meet the demand from thousands of home buyers lining up for a shot at home ownership.
Today’s real estate market retains a high ratio of home buyers to homes for sale. Inventories remain relatively low.
However, as more and more homes come onto the market home buyers will have more breathing room.