Santa Clara County Nearing a Balanced Real Estate Market

 




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Santa Clara County Nearing a Balanced Real Estate Market

Introduction: The Cost of Buying a Home in Santa Clara County


You need a $400,000 income to buy a house in Santa Clara County. To make it affordable, right? San Jose, Sunnyvale, Santa Clara Metro area. The annual income of $408,000 is needed to afford a typical home sale in the highest in the nation. That's more than 8% higher than a year ago. 

Guess what? Our trend, in Santa Clara County is about 8%. For a while it was about 12 to 15% growth. 8%. That's about typical in this area. 


Understanding Housing Affordability in Santa Clara


That's why it's important for you to buy a house I know people that 10, 15 years ago, they're like, I'm gonna buy a house when the market crashes.

They're still renting and nothing personal, but that's just it. So an annual income of 1 28 is needed to afford an apartment for rent in San Jose, Sunnyvale, Santa Clara Metro. We consider a home affordable if a buyer is taking out a mortgage and spends no more than 30%. Now it's usually 35%, and we go up to 45%.


Homebuyers need to make more than $400K in this Bay Area region to afford the 'typical' home, analysis finds

Visualizing Home Buying Costs

But yeah, wanted to show you this real quick because I always have charts, all these exciting fun charts. Let me break this open so you can see this. I'm gonna move this over here. There you go. Pardon me. So this is a typical buyer's net sheet.

a sample one for visualization. This is not for use to close on a house. You're gonna get one from a title or an escrow company that will actually be more accurate for you. I use this to help visualize costs, not exact costs. this is how it looks. typically how it looks, but every cost is different because it's timing and dates and okay.

Enough of that.



Current Market Trends and Income Requirements

REO of the Week 


The US median income is 67. I know right now, Santa Clara County is $200,000 a year. That's the median income right now. And if you bought a house today, the median priced house is 1 8 4 5, which has gone down dramatically over the last couple of weeks that takes 73% of your income to purchase a house. You could buy a million-dollar house, which is a lot less, but just for this example, it would be 73%, so it would be unaffordable if you had the median price.

Good news is, We're seeing the market to be a balanced market. If you made $400,000, as that article suggests, it's still 35%, not 30%. that's loan to income ratio.

These numbers are completely off. This number right here, 35%, if it's a $400,000. Income and a median-priced house in Santa Clara County. 

Now they're probably using more specific numbers, et cetera, so don't expect it to jive. Exactly. San Francisco is the next highest, just above us. Shrinking gap, we'll talk about that in a second. The big picture across the US Americans need to earn $116,000 to afford a medium-priced home for sale. So if you're an employer, understand that's where you need to be, not from a socialist point of view, but to make a living.

If you're gonna hire somebody, that's the projected income that they need. What they're saying is become increasingly challenging for American renters to make the shift to home ownerships again, if you did it 10 years ago. Today is Wednesday. I'm actually back for my selling trip, by the way. That was amazing. I suggest you do it. 


Balanced Market Insights


Getting close to a balanced market. If you recall, I've said that we need to be at about a thousand homes for sale in San Jose to make it a balanced market, not a seller's market, not a buyer's market, but a balanced market.

Right now we're at 711, In Santa Clara County, we need to be about 2000 and we're getting close to it. when I say 2000 or a thousand, I mean it could be 1800 to 2200.

Making it a balance market. It's not a flood of inventory, it's just the market is slowing down and we're in the middle. Actually, we're at the tail end of our selling season, and we're seeing the market slow down. if you can afford it, this is the time to do it.

This is the time to buy. I just bought a house in Las Vegas for my parents. ' I'm taking advantage of this market. It's not a hot market. I don't have to spend $400,000 over list price to buy a house that I don't like, I don't have to pay a higher price.

The higher the selling cost, the worse for me as a buyer. Okay. Now if you're selling, sucks for you, but if you're selling and buying, it's actually a good thing because when you have lower selling costs, you're paying me less. You're paying the buyer's agent less. You're paying escrow tax and everything else less.

You can buy a larger house. It doesn't matter if you're buying a larger house or a smaller house. I bought a smaller house than this. I had no competition offers are gone. The market has dried up a little bit. Buyers are being a little manby pamby. They're like, oh my God. 7%. It's so unaffordable. It is unaffordable. But if you can afford it, squeak by, you can buy a million-dollar house instead of a $1.8 million house or get into a townhouse or what have you.

Get into a house now, because there's no competition, right? Real estate is like Little League soccer. Imagine this screen as. Little League Soccer, Everybody starts out, coach is yelling, play your positions, and all of a sudden the ball starts off, gets kicked, and then the ball goes over here and all the kids run over here, and then they start scrambling for the ball and there's nobody else playing their position, A new house is on the market, so all the buyers go over there and they gotta check it out, and the ball gets kicked over here. So everybody goes over here. And then the ball gets kicked over here, and then nobody's playing position. The analogy is you're looking for the new shiny thing like a cat.

And I'm like a cat, too. We're all like cats where we're like, we wanna play with that laser beam, right? Look for the houses that have been on the market for 30, 60, or  90 days. They're not fresh. And if you're a seller, you gotta get in this mindset. You're not gonna get your house sold in seven to 10 days right now because the market is not where it is unless you price it really aggressively low for the condition, location, and the market's telling you right now.

Be low, take what you get, and move on. If you list it low and you attract five, 10 buyers and you get offers in hand, then you don't have anything to worry about. You can pick the highest one. Who cares what it sells for, because less is more. You're paying me less than the buyer's agent. Escrow and taxes are lower. Let's say you had a house that was worth $2 million, and you got 1.5, you have a $500,000 delta off the expectation of what you are going for.

Now, you can go and get $500,000 less on the next house. I'm going up to Sacramento tomorrow because we know we can get. 7.5% off a house. If we buy this week, it's a new house, massive discount. We're gonna go get that house. You don't pay a premium. There's no appraisal gap. And if you need to know that there are videos galore about that, you can ask for repairs. You can ask for inspections. You can ask to make sure you get everything. So your house is not perfect, but better, right? Again, you have lower closing costs, and you have lower property taxes.

So this is good when we're going into a balanced market. This is what we've been waiting for the last few years. Four years ago, 20 20, 20 21, we were in a firestorm. We had 25 offers on every house, and you were getting three, $400,000 over a list price, and that was great for sellers, but then they had to take that money and buy something else and they had to compete.

Right now there's hardly any competition, especially if you're looking for houses that have been on market for over 60, 70, 90 days. And yes, right now we're at a balanced market.  


Mountain View home of the week 

Home of the Week: Mountain View

Mountain view home for the home of the week is Calderon not my listing. Three bedroom, two and a half bath, 1800 square foot, built in 1997. I picked it is because it's walking distance to Castro Street.

I see a trend here. Keep on looking at houses that are close to a downtown, a main street, USA. Calderon is an avenue. It's an avenue, meaning it's a semi-busy street, so that's why they priced a little bit lower, 2.8, but let's take a quick look. Oh, these are dark pictures. I love the box. Brownie. Look, man, you know it's a standard house. Looks nice. I wonder if it has an HOA. No. No, HOA. That's beautiful. Original list price is 2.888. Now they're down to 2.8. We're seeing more homes sit on the market longer, and we're seeing far more list price decreases. If you're interested in looking at it, let me know. 


Apple Homes for sale  


Go take a look at it. Homes near Apple, I picked Mallard Way. It's walking distance to the Apple campus, to the Spaceship. Four bedroom, two bath, 1600 square feet, built in 1961. Fairly updated. 2.99888 And it's brand new. How many days on market? Eight days on market. So we've been seeing houses in Cupertino last eight days. That was unheard of. A year ago, two years ago, this was an updated house. It's a pretty house. Has a nice little DU thing. Shaq back there. There you go. $3 million. 


Distressed Home of the Year

This is the distressed home of the week. 

I would love to have this house, $1.8 million. Monroe Street. I sold a house on Monroe a few years back. Four bedroom, two and a half bath, 2,600 square feet, built in 2024, which I am calling bs, but here you go. I don't know why it's there. Monroe is right there. You're close to everything.

Santa Clara University. Let's take a quick look inside. Maybe they rebuilt it now and this is a circa 100. Look, you can take a look and see. This one's ganged up. Beat up. Need some love.

Let's keep an eye on this one.

It looks like a wall heater. The vents tell me that there's hvac. This is a hundred year old house.

It has access to an attic. That's cool. I'm sure it has a basement too. I probably have access to it. That was an add-on right there, with or without permits. Wow, that's a whole lot of house.


Historical Tidbits and Conclusion


This is a perfect example of why there used to be attached garages and now we have detached garages. Back in the day, you used to have a horse and buggy, right? The buggy would stop, and you would offload right here. You get into your house, and then your husband or your stable man, depending on how wealthy you were, would take the buggy and the horse into the garage or into the stable. That's why we had detached garages, 'cause we wanted to keep the smell of the horses far away. Pretty amazing, huh? And now it's expected to have a two-car garage attached to your house for easy access. A little bit of history, a little bit of veto knowledge. Cliff Clavin of real estate. So if you're interested in looking at that one, gimme a call.


Let me know number's down below. Happy to help you out. Thanks for watching. I'm Vito with Abano. We'll see you out there. 



🔴 Insurance Adjuster What You Should Know https://youtu.be/8IWgof1qvnc

🔴 Renters losing MORE than Rent! (Bay Area Median Home Prices) https://youtu.be/VwLrwX2YuHo?t=41

🔴 MoonBeans Coffee https://www.youtube.com/watch?v=OmHpGXVu5sQ&feature=youtu.be


Vito Scarnecchia

Real Estate Broker, Veteran, Dad

DRE#: 01407676

408-479-2427

Update your home value: https://hmbt.co/bT7qRJ      

FREE DESKTOP APPRAISAL https://www.propertyrate.com/agent/vitoscarnecchia

If you are moving ANYWHERE in the world, let me know! I know a LOT of AMAZING Agents!

🔴 Willow Glen's five most expensive homes https://youtu.be/3A_E2ck0ePg





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