How the Santa Clara Market Has Shifted, and What Agents and Sellers Can Do About It
How the Santa Clara Market Has Shifted, and What Agents and Sellers Can Do About It
The Santa Clara market has shifted. Santa Clara, CA, real estate is changing like much of the rest of the country's real estate climate.
The reality is that homes are taking longer to sell, and there are more homes on the market. Santa Clara homes have dropped in value. They may drop further going forward.
So, how can you beat this Santa Clara County real estate market? What do you need to do to get your home sold and get a good price in this market?
Read on to learn more about the Santa Clara real estate market trends and how they might impact you in selling your home.
Working With an Experienced Santa Clara Real Estate Agent
When you consider the Santa Clara market, you want to talk to someone who knows the area and is familiar with the ebb and flow of the real estate climate.
The statistics show there's been a shift in the market. But an experienced Santa Clara realtor like Vinicius Brasil also sees the trends in the market.
As a part of the Brasil Group, Keller Williams, his experience can also help you understand the trends present in the current Santa Clara market. He can help you learn what to expect moving forward and what you need to do to get your home sold.
Santa Clara, CA Real Estate, What Has Happened?
To understand the current market in Santa Clara County, you must first consider the area historically to understand what got the market to its current state.
Locally, the real estate market tends to be a seller's market with limited available inventory and strong demand for that inventory.
First, consider the federal government's recent monetary policy of low-interest rates and quantitative easing. This created an atmosphere of rapid and high asset depreciation, resulting in record-high stock prices and real estate.
The covid pandemic also contributed even further to this phenomenon.
Typically, there's low inventory after the holiday season at the beginning of the year. In a market with reasonable demand, the market generally experiences some price appreciation at the end of the year's first quarter.
- This year the market was overly heated due to:
- Extremely low inventory
- Low-interest rates
- Record-breaking stock market
This resulted in a very hot market at the beginning of the year, with local real estate prices reaching the highest levels ever. This made the Santa Clara and the Valleys real estate even less affordable.
With recent concerns about inflation, the Fed has chosen to take a more conservative approach and raise interest rates. The goal is to slow the economy and ultimately curb inflation.
Because of the interest rate hikes, the results have been higher mortgage rates and a sharp correction in the stock market.
These factors have resulted in a steep decline in affordability for buyers in the Santa Clara market.
These factors, combined with record housing prices and the seasonal increases in the inventory of homes for sale, resulted in a sharp correction in local real estate values.
There are some cases where homes are now selling for a half-million less than they sold at their peak in recent times.
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What Should You Expect From the Market Going Forward?
The real estate market, like economic markets, operates on the premise of supply and demand.
For the past few years supply of homes for sale has been low, and demand has outpaced supply. This meant that for several years the price of homes has increased.
Recently though, the demand has dropped. This could result in home buyers being priced out of the market. It could also result from interest rate increases and stock market corrections.
These changes all impact affordability, and therefore, demand goes down. When demand goes down, it also means homes take longer to sell.
This, coupled with the general increase of homes for sale that seasonally happens in the spring and summer markets, will put further pressure on home values to drop.
The current market conditions due to the correction in real estate values have buyers proceeding cautiously. At the same time, sellers are hoping to realize sale prices from months back.
All of this leads to more homes sitting on the market and the eventual dropping of home prices as sellers lower the list price to sell their homes.
How Can You Get Your Home Sold in the Current Market?
There are a few factors key to a successful real estate sale. The seller needs to have realistic expectations about the current market situation. The realtor's role is strong communication, so there is an understanding of the current real estate climate.
Sometimes this means the seller needs to adjust their expectations once they have a better understanding of the current market.
So the key is working with realtors and agents who can communicate what is happening in the market to inform or educate their sellers.
Ultimately, the seller and the agent should work together to develop a successful sale plan.
The first part of this plan involves pricing your home to sell. It's critical to price for the current market conditions to get the home sold.
As demand is softening and prices drop, you don't want to have your home sitting on the market too long.
You'll want to capture the attention of those motivated buyers who are still making offers in hopes of getting a solid offer and selling your home quickly.
Let's look at some tips to ensure your home sells in the current shifting real estate market.
Hire a Neighborhood Santa Clara Real Estate Agent With Experience
A Santa Clara realtor with experience in your local market will understand what is happening in the current market and how your home will fit into the current market conditions.
Your agent will know:
- How strong buyer demand
- Your competition
- How to price your home effectively for a successful sale
If you price your home too high, your home will sit on the market longer. You will only receive offers from opportunistic buyers who will make lowball offers.
As the market drops and new listings come in, undercutting your home's price, you will eventually have no choice but to drop your price or take your home off the market.
The first week your home is on the market is critical in a shifting market. Make sure your realtor knows their stuff and has a solid plan to get your home sold, including pricing it right.
Pay Attention to the Appearance of Your Home
In a shifting market, more homes are on the market, which means more competition and options for buyers.
It's critical to grab buyers' attention online before they go through the door to view it in person. Your Santa Clara realtor should advise you on how to make your home stand out.
An experienced agent should also have a team of skilled contractors, stagers, and tradespeople that can help you get your home ready at a reasonable price, and with a quick turnaround.
Time is key here because the market is softening. You want to get your home sale-ready quickly.
Be Prepared for Negotiations
A few months ago, a seller would list their home and end up selling it with multiple offers and a record price.
In the current Santa Clara, Ca, real estate market, sellers will need to work hard and do more to get multiple offers. They will also need to be prepared to negotiate.
This gets back to the agent you work with. Not only should they be a top-notch negotiator, but they must understand the current market and be able to calculate risk. The agent should be able to guide you through those tough decisions in negotiating a sale.
As a seller, you shouldn't be afraid of losing a buyer if you counter. If a buyer has made you an offer, they want your home.
Trust that your agent will guide you through the negotiation process to sell your home for the best terms and price the market will bear.
Time to Get Your Santa Clara Home Sold
It can be shocking how quickly and dramatically the Santa Clara, CA, real estate market can turn.
Now that the market has shifted, it's important to know exactly what's going on. Where is demand, and how does your home stack up?
Working with a professional who knows your area will be your best asset for the successful sale of your home.
If you have questions about the market, and your Santa Clara home, let me help you. Feel free to call or email me with all your questions.
Contact the office and ask for Vinicius Brasil, the Santa Clara Real Estate Guy.