South County Sales Are UP!

Contrary to what you may be reading in the press, the South County has been on a rising sales trend for 4 or 5 months now! We are likely leading the rest of the country out of the housing slump!
Periodically I review all the sales and listing data for trends that will be important for you! I ususaly track properties on acreage, properties selling for more than $1M, entry level homes and the overall sales data for Morgan Hill, Gilroy and San Martin. Here are some "headlines" and graphs that should give you a better idea of just what is transpiring in our market.

Here are the headlines:

Sales in the Morgan Hill, Gilroy and San Martin areas continued to climb for the 5th straight month! We placed 174 properties in contract in April at a median price of $455,000. Overall, the local market has only 3.7 months of inventory at this recent sales rate!

In the rural market (properties located on more than 1 acre) we had 18 homes enter into contract in April, the most in any single month since July 2007!!! However, while the median price for rural properties rose for the 3rd straight month, it was only $800,000. This glaringly demonstrates the significant shift in selling prices in the country areas over the past two years. Although inventory has been falling for 6 months now, we still have 6.7 months of inventory of homes on acreage. Primarily inventory has been declining sue to increased sales in the $600K to $900K price ranges. Yes, there are homes available on acreage for less than $700K in our area!

Homes priced above $1M also experienced a good month with 9 sales and a median price of $1.4M. Even though inventory has been decling since August, we have 11 months of inventory in the upper (>$1M) price range. The decline in inventory above $1M has been due to falling prices more than rising sales.

The fastest moving market segment continues to be the entry level with prices below $399,000. We sold 68 homes last month at a median price of $290,000. Inventory at the entry level remains low with about 1.5 months of inventory! BTW, a recent USA Today poll found that 42% of all first-time homebuyers thought now was a good time to buy a home, 48% said prices will keep falling and were waiting, and 10% were unsure. Very different from what the general population is reported in the press to be thinking!

Mortgage rates tied the all-time record set earlier this month for the lowest 30 year fixed rates since Fannie Mae started keeping records in 1971. The rates were 4.78% with .75 points. Rates today (Thursday 4/30) are 4.82% for a 30 year fixed rate conforming loan. Agency jumbo loans ($417,000 to $725,000) average 5.25% and Super Jumbos are running 6.5% with 1 point.

The trend in number of sales and inventory versus price is clear! As price increases, sales fall and inventory climbs. Look at the currentr mortgage rates and lender down payment requirements and you will easily see why.