I know you have come to expect that I usually give a positive “spin” to every piece of news I read. That’s my nature. With all the bad news out there, we need some people in the world who want to accentuate the positive!
In residential real estate, we have one thermometer we like to use to check the temperature of the market — Pending Home Sales. This indicates the number of homes where a buyer has made an offer that the seller has accepted and they are moving forward toward closing the sale. Typically if the number of Pending homes is around 25% of the total Active homes for sale it is a solid and balanced market. If the Pending number for any given area is lower than 25% it is considered a weaker market; greater than 25% is consider a strong market.
In my opinion, the most recent news covering the period through end of July is very positive. First of all, Pending sales for Santa Clara County are up to now over 2300 which is over 1000 more homes Pending than we had at this time last year, giving a 26% Pending ratio for the county. This tells me that more buyers have come into the market to make offers and more sellers have gotten realistic about accepting reasonable offers.
Most noteworthy are the Los Gatos and Saratoga markets which are at their lowest Pending ratio of recent history — only 17%. Conversely, Sunnyvale is at the highest of the entire county at 37%!
Every piece of news has two sides, but the media loves to interpret it on the negative side because bad news sells. But how you choose to look at it or what you choose to believe all depends on your personal choice – this is the power of “law of attraction”.