“The median price paid for a Bay Area home plunged to $485,000 in June, marking the first time in more than four years that it was below the half-million mark.”...a new report from Data Quick. Of course, news media outlets ran screaming with headlines like “Home sales plunge to near record lows” but how can you not look at the other side? The fact is, when prices fall to their lowest levels in four years, what it becomes is music to the ears of buyers. And here comes that first time home buyer again, creating that domino effect for what could be our entire housing market in the next several months.
Yet another reason? The Commerce Department said Thursday that construction of single-family homes dropped 5.3% in June to a seasonally adjusted annual rate of 647,000 units, the weakest performance since January 1991, another period when the housing industry was going through a severe downturn. So how could this possibly be good? The fact is that our population is growing and over the next several years, we are going to continue to need additional housing. When construction of new homes slows, it means demand increases. It’s Economics 101.
As for our Sunnyvale/Cupertino market, Cupertino saw a huge surge this week with their pending sales increasing from seven to 19! This market seems to change with the wind and we never know from one week to the next whether inventory and sales will be up or down. Sellers who seem to prevail are those who price their homes competitively from the start and don’t test the waters...and good schools are still the key.
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