Statistics and Fake News

The San Jose Mercury News recently wrote that the Bay Area home prices continue to rise, in the face of a pandemic.

WOW!  That was hard for me to fathom.  All I experienced are price cuts and selective demand.  The Ultra Luxury Market is soft. Sales occur below list and many tie the sale to a recent cut.  This Monday there were 56 price cuts in Woodside, Atherton, Palo Alto, Redwood City, Menlo Park and Portola Valley.  Palo Alto was the greatest hit with price cuts from 7-11%.  Two cities saw price to list increases.  they were Menlo Park and Los Altos.  The other took hits.

The article goes on to say that the "median" sales price for an existing home rose 3.4% from last years "median" of $925000!  WAIT A SECOND!  $925,000?  Okay, where in our Silicon Valley is there a home for sale for $925,000?  When they went into various counties the number became a bit more realistic.  San Mateo median is $1.65 million.  I live in Farm Hill Estates.  The only $1.65 million sold here was a tear down.

Further into the article the quote is homes sales fell 8%, condo's dropped 19% and condo prices fell 4.5% to $687,000.  If they can show me a condo in Menlo Park for that price, I WILL TAKE IT!

Now the article gets interesting to me.  Livermore had an upgraded 4 BR home with pool selling with 21 offers and a significant premium over the $1.15 million asking price.  That tells me something.  There was a time not too long ago I would suggest an east bay and central valley home to struggling buyers..."are you crazy, you know how hot it is there in the summer?  100 degrees!"  That certainly tells me that buyers do not want the high rices of the Valley and they do not want the Virus spread about in the Valley.

Moving out of the area?  Zillow predicted a 5.6% price increase in La Honda from $821,575 to $875,718.  Affordability and proximity rule with an hour to 101 down highway 84 to Woodside Road.  New owners leave the peace and tranquility of the Giant Redwoods, knowing they are their family is safe and healthy.

News papers are a passing industry.  More and more of us use the cloud for our news.  We are able to get feed back from communities using "neighbors" Facebook and other social media sites.  Newspapers rely on ads to survive.  The largest advertiser are the real estate related industries.  Real Estate agents put out large sums in ads promoting listings.  It would be bad business to hit the industry newspapers rely on with "bad press".

Rents and home sales will soon see inventory expansion.  How long can bars, restaurants, barber shops, hair salons, nail shops and their employees take economic hits until they walk away and move.  The large apartment complexes in Redwood city are still empty and there is a very, very large hole on El Camino Real in Menlo Park where once were Auto Sales.  The fact that Livermore is getting multiple offers is a clear indication that the move is out of the Bay Area.

The past history of our real estate economic cycle is dead.  Year end and beginning of the year dead Spring and fall hot.  The Pandemic, the Shelter in Place in shut down of businesses and communities are and will take near term and long term tolls.  

The Chinese curse..."may you live in a changing world" certainly has its place with us, doesn't it?




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Silicon Valley Real Estate Newsletter

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