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Where Have All the Houses Gone?

We have been experiencing the full gamut of the housing market cycle in the Bay Area over the last decade - from the rise of the housing bubble to the devastating crash after the bubble popped, it's been a rocky road back to market stability. Right now, the Silicon Valley area is experiencing a severe housing shortage, despite the increase in housing values (which often acts as incentive to sell).Many of the areas surrounding San Francisco and San Jose are experiencing this, but real estate experts at say that East Bay and Santa Clara County are being hit the hardest. These areas have highly sought-after neighborhoods, and as the Silicon Valley tech boom continues, more and more employees are looking for homes in the area. However, current home owners in the area seem pretty content, so there are very few houses being put on the market. The houses that ARE on the market sell within a week, and usually after an intense bidding war.Many current home owners were able to take advantage of last year's historically low interest rates to refinance their houses, and are now adopting the "Improve, Not Move" model of redoing their current homes instead of looking for a new one. Some owners are also delaying a previously-intended move because they are nervous about the lack of inventory as well; Zillow's director of economic research Svenja Gudell likens it to a game of musical chairs, and "they don't want to be one stuck without a chair." Some home owners are holding onto their homes in hopes of finding the peak market price later, and home owners who ARE willing to sell right now are often inflating their prices and taking advantage of the bidding wars, which ends up contributing to this "crisis of affordability," as David Stark (public affairs director of the Bay East Association of Realtors) calls it. The San Jose Mercury News describes this issue in a little more detail on their website.This period of low housing inventory definitely makes it a seller's market, but a well-informed, proactive real estate agent can make all the different for a potential buyer. Make sure you choose an agent who knows the area and is willing to do the leg work to get you the home of your dreams. Buyers are still finding hidden gems in the midst of this affordability crisis, and an agent with a finger on the pulse of the market is your best chance for joining that group! Contact Laila today for the latest information on the Silicon Valley real estate market, or to start looking for your dream home.

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