According to experts in the Mid-Peninsula real estate market, the current lack of inventory is primarily due to the absence of tax incentives and many homeowners’ reluctance to give up their low-rate mortgages. This has created a scarcity in available properties.
Michael Dreyfus, the general manager of Golden Gate Sotheby’s International Realty in Silicon Valley and a real estate agent in Menlo Park, noted that the market is expected to be more robust this fall compared to last year. This is largely attributed to recent interest rate cuts by the Federal Reserve and strong housing demand. However, the issue of property shortages remains one of the largest challenges facing buyers and real estate agents in the Mid-Peninsula area.
Despite the inventory challenges, there is still a significant demand for reasonably priced homes in desirable locations and good condition.
High-end properties are selling quickly. Dreyfus reported that luxury homes priced between $7 million and $10 million, as well as mansions costing around $20 million, are moving at a “very active” pace.
Elyse Barca, a real estate agent at Compass Real Estate focused on luxury properties in Menlo Park, stated that there are many qualified buyers in the market. She anticipates an even more thriving real estate market this fall, although the limited inventory remains a significant concern.
The condominium market is seeing a recovery. Barca mentioned that the condo market has rebounded from its pandemic lows, and high-quality single-family homes in the area are being quickly snatched up.
In Santa Clara, condo and townhouse prices now exceed those in typically more expensive San Mateo. Jasmine Lee, a sales assistant at Coldwell Banker Realty in Menlo Park, reported that the median sales price in Santa Clara has reached $1 million, compared to $937,000 in San Mateo.
As for the upcoming elections on November 5 and their potential impact on the real estate market, Barca’s colleague, Nick Granoski, believes that prices will remain relatively stable this fall.
Denise Welsh, the assistant sales manager at Compass Real Estate’s Los Altos office, pointed out that receiving multiple offers on properties has become increasingly common in recent months, especially for entry-level homes, which continue to attract significant interest.
Moreover, there have been changes to commission rules that present new incentives for sellers. The new regulations eliminate the long-standing tradition of requiring sellers to pay 5-6% of the sale price as commission to both the listing and buyer’s agents. The new rules mandate that agents must first secure a written agreement with buyers before showcasing properties to clarify their compensation.
Lee predicts that inventory levels will rise slightly this fall and that market activity in the fourth quarter is likely to exceed the same period last year. There is high interest from buyers looking at everything from condos to luxury homes.
While some sellers may delay listing their properties due to the upcoming elections, Lee believes this is unlikely to have a significant impact on the market, noting that there are always sellers who need to list for personal reasons.