Today I received an email from the CEO of Sereno Group, Chris Trapani, about his housing market prediction for Santa Clara County. The Sereno Group is dedicated to making the housing market direction transparent for all. With accessible knowledge for the 2019 housing market trends, we believe that people looking to buy in Santa Clara County or the Bay Area can make more confident decisions. Take a moment to read Chris Trapani’s 2019 housing market prediction.
2019 Housing Market Prediction
“We’ve only just begun to enter our most active real estate season, and today offered a reminder of how fortunate and blessed we are to experience life in such a remarkable part of the world. For those of us who have been around our profession for a number of years, you too may have sensed that we may just be on the front-end of a very active spring market. A market quite possibly as productive as any late 1st, or 2nd quarter we have experienced.
This may be a bold statement given the market stall in Q4 of 2018 and constrained feeling earlier this year. However, as I have been hearing more about listing and sales activity in a variety of areas and price ranges, my forecast for this year’s market is coming into focus. We can definitely report that overall activity has been picking up quite significantly over the past 1-3 weeks. This includes new listings, pending sales (including increasingly more with multiple offers (anywhere from 2-17 offers is what I have heard so far)) and just overall energy that feels like very good things are ahead. We can also be confident that the sunshine will provide a potent, natural mood boost.
While reviewing the most recent market stats for Santa Clara and Santa Cruz Counties, I developed a few theories and since we have been spot on predicting in years past, we will never be bashful to share them. We know that Q4 of 2018 saw sales drop precipitously and this carried over into early 2019. We also know buyers cannot hold off forever and it occurred to me today that we very likely have some pent-up demand from both Q4 and also the abundance of rainfall over the past several weeks. Don’t be surprised if this results in a literal “spring” of buyers entering the market with a greater sense of urgency. This might then match up well with the relatively increased inventory equating to significant sales volume. During this extended, multi-year, up-cycle, one of the conditions we have not seen is healthy buyer demand combined with a reasonable level of inventory. The past 5+ years have been characterized by lower inventory, with buyers concentrated and competing for limited supply.
Since our Bay Area real estate values have closely mirrored the NASDAQ over the past few decades, it’s also important to compare and note levels as we started out each of these past 3 years: January 2017: 5,500. January 2018: 7,136. January 2019: 6,738 (NASDAQ now @ 7,472 as we head into our busiest season – don’t underestimate this significance).
Here are a few stats which offer perspective on where we stand at this time as compared to the start of the prior two years.
In general, in terms of data/stats, we are in a market most similar to January of 2017, however, some stats may be more similar than how it may “feel” when comparing January 2018 and 2019.
Santa Clara County (SFR + Condo/Townhomes):
*Listings for Sale: January 2019 there were 2,213 as compared to only 1,503 last January but more similar to 1,965 in January of 2017.
*Under Contract Properties: Jan 2019 (704), Jan 2018 (742) and Jan 2017 (726) under contract. Current pending sales are not far off from prior years, all things considered.
*Sold Properties: Jan 2019 (598), Jan 2018 (630) and Jan 2017 (721). The decline for Jan 2019 is due to the Q4 slowdown/carryover hangover and expected. This should even out in late Q1, Q2+
Days On Market for Pending/Under Contract Properties: January 2019 (38) closely resembling January 2017 (31). January 2018 was most rapid @ (17) Days on Market.
New Listings: Very similar for each of the past 3 years: January 2019 (1,119), January 2018 (1,007) and January 2017 (1,014).
I hope this provides you with an early indication of what we are seeing and forecasting so far. We will all be a bit smarter in about 30-45 days and will always do our best to keep you in tune with our sense of the market’s trajectory.”
– Chris Trapani, CEO & Founder of the Sereno Group