The Silicon Valley Housing Market Update

Sales of existing single-family Bay Area homes rose in August from the previous month and compared with a year ago, according to a report Friday. But part of the increase was attributed to August having more business days to record deals, and sales were below normal for the month, typically one of the busiest for home buying.
"Lower prices and lower mortgage rates have drawn more people off the sidelines" to buy homes, said Andrew LePage, a spokesman for DataQuick, the real estate information service that issued the report. "But there are still a lot of folks holding off waiting to see if prices have bottomed out so they don't buy and find themselves in the position of others who owe more on their home than it's worth."
A total of 1,183 existing single-family Santa Clara County homes were sold in August, an increase of nearly 9 percent from July and up nearly 12 percent from a year ago. In Alameda County, the 1,079 homes sold represented an increase of 2 percent from July and about 7 percent from a year ago. Contra Costa County's 1,210 sales were up about 10 percent from July and 12 percent year over year.
The median price of homes sold in August was up slightly from July in Alameda, Contra Costa and Solano counties, but sagged a bit in Santa Clara, San Mateo and San Joaquin counties, and was unchanged Bay Area-wide compared with a year ago.
The median price in August was $561,750 in Santa Clara County, $399,000 in Alameda County
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Many real-estate agents based in Cupertino, are encouraged by what they are seeing. They noted that five developers recently submitted bids on a Sunnyvale parcel of land in hopes of building new homes there. In addition, they are seeing a rise in the price of entry-level homes in Palo Alto, Cupertino and West San Jose -- areas that had been among the last to succumb to falling prices when the housing market tanked in 2008.

"I definitely am seeing improvement," Walker said. "Buyers are feeling more confident" about entering the market.
Sonia Dueñas and her husband bought a five-bedroom house in West San Jose in August for $810,000 after deciding "the time was right" for their family to move up from their townhome north of the city's downtown.
"It was a combination of things" that prompted the purchase, Dueñas said. "We felt comfortable with the interest rates, we qualified for the property without any issues, we were looking for certain things in a home, and it just happened to be the right one."
Besides, she added, "I have a boy and girl, and they were still sharing a room, so it was time to make a change."
But not everyone is finding it easy to get into the market. Robin Dickson, who works in the Danville office of J. Rockliff Realtors, said many mid-range buyers are having a tough time.
"The high end is becoming a little more solid, and the low-low-end investors are everywhere," she said. "But the difficulty in obtaining financing is really affecting the move-up buyers."
Because a lot of people, even with good credit, can't qualify to get a mortgage, cash is king, Dickson said. She said cash deals in her office are up about 30 percent compared with last year. She added that many buyers are looking at Brentwood and Oakley for housing options because, "you can buy so much more house for a lot less."
Kevin Kieffer, of Keller Williams Realty, said he is getting 20 to 25 calls a week from investors looking to buy low-end properties, mostly in Concord and Martinez.
"With what's going on in the stock market, people are looking for other ways to invest in property," he said.
However, some high-end home buyers are facing difficulties, too.
Sean Ryan, an entrepreneur specializing in software, two months ago paid $1.2 million in cash for a five-bedroom Danville house. But when he recently sold his previous home nearby, he said, it closed at about a 5 percent loss.
"We bought the new house with the understanding we could sell the existing home, but the market turned out to be a little more difficult than we thought it would be," he said.
Despite August's uptick in sales, "I don't think it means we're on a rebound," said Jeff Hansen, who handles home sales in Santa Clara County for Keller Williams Realty. But he added that it's hard to draw conclusions from just one month.
Comparing June through August, this summer's sales don't look too impressive. Santa Clara County had 3,573 single-family home transactions during the three-month period this year, which was 20 more than during 2010 and 227 more than in 2008. But over the past decade, the number of sales averaged 4,796, said DataQuick spokesman LePage, who believes the weak economy, political wrangling in Washington and worries about the nation's debt have caused many potential homebuyers to hold off venturing into the market.
"In a historical context, it's been a very slow summer," he said. And judging from the August sales data, "it definitely didn't finish with a bang."