Where is our bubble ?

Countywide we are up 4.2%?  Communities like Los Altos, Saratoga, Campbell, and Mountain View lead the way, Where communities such as Morgan Hill, Santa Clara, Cupertino and Gilroy seem to be hit the hardest ? But what does hit the hardest really mean in dollars and cents.

The community of Morgan Hill has seen their home prices drop the most ? a whopping 3.2% which translates into $15,000 dollars.  Santa Clara is next with a decline of 1.8% or $12,500, Cupertino down .9% (yes less than 1%) or $8,750 and Gilroy is off $5,000 or .7%. 

May 2007 Medium Home Prices for Santa Clara County 
Compares May 2006 Medium Home Prices to May 2007 Home prices. 

Santa Clara County $  720,000  $  691,000 +4.2%
Campbell  $  760,000  $  707,000 +7.5
Cupertino        $1,005,000  $1,013,750 -0.9%
Gilroy   $  695,000  $  700,000 -0.7%
Los Altos  $1,680,000  $1,512,500 +11.1%
Los Gatos  $1,225,000  $1,180,000 +3.8%
Milpitas  $   640,000  $  620,000 +3.2%
Morgan Hill  $  760,000  $  785,000 -3.2%
Mountain View  $  739,000  $  701,000 +5.4%
San Jose  $  679,000  $  670,000 +1.3%
Santa Clara  $  665,000  $  677,500 -1.8%
Saratoga  $1,650,000  $1,485,000 +11.1
Sunnyvale  $  760,500  $729,500 +4.2% 
**From Dataquest and County Records.

When you see a headline Sales Down 25% - that does not mean the prices are down, just the number of people in the buyer pool is down.  Then you hear the blues about how rates are so high, but compared to May 2006  30 year fixed rates  (6.6 in 2006 vs. 6.26 in 2007) and the Adjustable Rates are also down (5.63 vs. 5.52).

Yes, there is pressure in the sub-prime market and we are seeing communities that were the most affordable and thus the most targeted for, what I like to call the Via la Loca loans (Just live the good life and don't worry about tomorrow), have been the hardest hit.   Yes, the guidelines for loans today have tightened up. Now you not only have to breathe but you also have to work and pay your bills on time.  All these things are great for the housing market. 

It's location, location, location and all Real Estate Markets are local.  Reading National News and applying it to our local market will keep you scared and out of homeownership your entire life.

Sales are down, inventories are up, it takes longer to sell a house in this market and you might even have to fix the Section 1 work and suffer through an open house or two.  But this is not the end of the world for Real Estate in the Silicon Valley. 

Once the buying public stops being scared witless by the press that glories in a bad Real Estate Market Story, we will see business as usual come back.  The question is, do you want to compete for your dream home with the herd that just figured out that living in Silicon Valley is about as close to heaven as you can get?  Or do you want to jump now before the pack and let the pack carry your values up to the next level. 

The choice is yours.