According to the California Association of REALTORS, home sales are projected to rise 1.3% in 2013 for a total of 530,000 units. Sales in 2012 were up 5.1% from the prior year. With the market being so strong buyers are faced with a decision, by next year or weight in the hopes that prices will stabilize or decline.
In Santa Clara County, sales are up for 2012 over 5%. Sales were up even more in many communities with sales rising 10% or more with price increases to match. There are many examples of individual neighborhoods with price rises well over 20% such as Old Palo Alto, the downtown Campbell area, and certain sections of Los Altos.
Where the concerns in previous years were determining if the bottom had actually been reached, we are now faced with deciding if we've reached the top. In my opinion, prices in many areas will continue to rise until they reach peak levels from the 2006-2008 period. These levels have already been achieved in many communities including Palo Alto and Los Altos. However, these price levels not been achieved in most of Silicon Valley. Buyers should be prepared to deal with continued appreciation in property prices, ongoing competition, and a shortage of inventory.
Another key consideration for homebuyers in 2013 will be confidence in further appreciation in 2014 and beyond. As the economy continues its recovery what is very likely to happen is much more moderate appreciation in future years. Even the local economy will have an extremely difficult time sustaining 10 and 20% year-over-year gains. An interesting article on the general real estate trends discusses this continued slow growth.
One of my first blogs in November 2009 regarding buyer prospects in 2010 and what the market would do. As it turned out, my predictions that 2010 would be a strong year were correct.
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Bryan Robertson, CEO | T: 650.799.9951 | Email: firstname.lastname@example.org | Website: http://www.BryanRobertsonHomes.com |CA BRE# 01191946 | Catarra Real Estate, Inc | 171 Main St #220 | Los Altos, CA 94022