The Santa Clara real estate market, found in the midst of the San Francisco Bay Area, saw an abrupt drop in median price as the risk of a “double-dip” increased. Until the month of November – the most recent period for which statistics are available – the median price had increased for thirteen consecutive months. According to figures provided by MDA DataQuick, the median sales price for Santa Clara County properties was $510,000, a decrease of almost seven and a half percent relative to last year. Santa Clara homes have been sold with less frequency for more than half a year, a phenomenon which has been largely attributed to economic uncertainty and hesitant lending practices on the part of banks. The drop in the average price is attributable to a number of factors, although it appears that the type of homes which were sold in November 2010 may have been important. Specifically, homes worth more than half a million dollars composed a lower percentage of the properties purchased in the most recent tracking period compared to both month ago and year ago levels. Some local experts have suggested that this may have been the result of investment-oriented buyers waiting for more favorable conditions.
The nationwide real estate market is facing a possible “double-dip,” according to a recent report by Standard&Poor’s/Case-Shiller. According to that home price index, there were more unsold homes and fewer home sales in recent months, indicating that the artificially stimulated real estate rally may soon reverse itself. However, local experts believe that the Silicon Valley, including Santa Clara homes for sale, may weather the storm and avoid slipping into negative territory. One expert with DataQuick suggested that Silicon Valley may remain strong going into the next tracking period because of the comparatively stronger economy in the region. The report indicated that the hardest hit areas in upcoming months will be those with a fragile economy, likely excluding the Valley and surrounding regions. Local drops in median price and sales volume can likely be attributed to seasonal drops, suggesting that the falling figures may not be the result of an inherently weak economy but rather just a cyclical phenomenon.