STATE OF THE EVERGREEN NEIGHBORHOOD MARKET - BLOCK CHANGE REAL ESTATE
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B L O C K C H A N G E R E A L E S TAT E STATE OF THE EVERGREEN NEIGHBORHOOD MARKET BLOCKCHANGERE.COM | 6120 Hellyer Avenue, Suite 175, San Jose, CA 95138
S TAT E O F T H E E V E R G R E E N M A R K E T
Buying and Selling Guide to Real Estate in Evergreen
As a top-producing local real estate team, we’re committed to giving you excellent, personalized service. This
guide offers a timely analysis of the single-family home market for Evergreen that will answer your questions and
help you develop a winning buying or selling strategy.
As we write this guide, we’re still navigating through the COVID-19 pandemic. It impacts the real estate market in
several key ways, which we’ll discuss in the first section below. In addition to the effects of the pandemic, interest
rates are historically low and will likely remain so for the foreseeable future. Lower interest rates are important
because they encourage potential buyers to take advantage of low-interest financing, they make real estate
investments a safer risk compared to other assets like stocks, they offer a higher return than government bonds,
and they offset many of the pandemic’s negative economic effects.
While the fundamentals of developing a winning buying and selling strategy remain the same, you should take
into account the current housing market indicators in the local market, too. With that in mind, this guide will
cover the following topics:
• Housing Market Behavior During the Pandemic
• San Jose Housing Trends for Single-Family Homes
• Key Housing Market Indicators for Evergreen (95135 and 95148 Zip Codes)
• The Importance of Listing a Home at the Right Price
2. BLOCK CHANGE REAL ESTATES TAT E O F T H E E V E R G R E E N M A R K E T
Housing Market Behavior During the Pandemic
Overall, the single-family home market held up well during the pandemic. After an initial decline during the early
pandemic months, prices have moved higher through the summer and autumn months.
Median Single-Family Home Prices
TTM, Monthly
In November, the median San Jose price dipped slightly month-over-month but rose year-over-year.
Inventory has been declining while sales have been higher than usual, boosting prices.
$1.4M
$1.3M
Median Price
Nov '20: $1.26M
$1.2M
$1.1M
$1M
Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20
San Jose SFH
Source: MLS
The median single-family home price was higher year-over-year in every month of 2020, emphasizing the value
and demand in the area.
Median Single-Family Home Price Changes
YTD 2020, Monthly, Year-over-Year
Median prices over the last several months have increased significantly year-over-year as inventory
has waned.
20%
16%
Median Price Changes
12%
8%
4%
0 7% 13% 14% 4% 3% 4% 6% 19% 16% 20% 18%
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20
Source: MLS
3. BLOCK CHANGE REAL ESTATES TAT E O F T H E E V E R G R E E N M A R K E T
Supply and mortgage rates have largely driven prices, and national demand has stayed the same or—in some
cases—even risen. The Mortgage Bankers Association, for instance, reports a 35% year-over-year increase in new
home applications nationwide. Locally, Evergreen is experiencing a 28% increase in homes sold year-over-year.
At the same time, mortgage rates are at record lows—under 3%—making houses potentially more affordable
even when their prices are increasing.
30-Year Fixed Interest Rate
TTM, Weekly
The average 30-year mortgage interest rate has dropped steadily since the stay-at-home order began and is
once again at an all-time low.
3.8%
3.6%
3.4%
3.2%
3.0% Dec 17th: 2.67%
2.8%
2.6%
2.4%
2.2%
2.0%
2- c-19
-J 0
- 0
-Fe 0
-F 0
-M 20
-M 20
9- r-20
-A 0
0
-M 20
4- y-20
-Ju 0
2- -20
-J 0
- 0
-A 20
-A 20
-S 20
-S 20
8- p-20
-O 0
N 0
-N 20
3- v-20
-D 0
0
16 an-2
30 an-2
13 Jan-2
27 b-2
23 pr-2
7-M pr-2
18 un-2
16 ul-2
30 ul-2
22 t-2
5- ct-2
17 ec-2
-2
12 eb-
26 ar-
21 ay-
13 Jul-
27 ug-
10 ug-
24 ep-
19 ov-
ec
n
Oc
a
e
a
o
e
J
A
-D
D
J
J
19
Source: Freddie Mac, 30-Year Fixed Rate Mortgage Average in the United States
Due to the low-rate environment, homeowners are using this time to refinance. If you bought a home over the last
five years, your borrowing rate was likely around 4%, so refinancing would drop your rate by around 1%. In general,
homeowners benefit from refinancing if they can lower their rates by at least 1%, which, for example, would save
over $500 per month on a $1 million 30-year mortgage. Because of the speed at which mortgage rates dropped,
the number of homeowners who would benefit from refinancing has skyrocketed.
Another way refinancing saves homeowners money is by providing an opportunity to drop private mortgage
insurance (PMI), which is the required insurance homeowners pay if they put less than 20% down. Homeowners
currently paying for PMI might be able to eliminate the extra monthly payment as long as the value of their home
has risen, and they have enough equity in the home.
As the initial uncertainties over the pandemic’s effects on the housing market subside, we expect demand to
increase even more. Whether you’re planning to buy, sell, or stay in your home, we can guide you through the
options that best fit your needs.
4. BLOCK CHANGE REAL ESTATES TAT E O F T H E E V E R G R E E N M A R K E T
Evergreen Housing Trends for Single-Family Homes
The numbers of homes for sale, of new homes, and of homes sold show a break in the spring/summer and now
autumn seasonal norms. Both supply and demand typically decrease in the winter months and pick back up
in the spring; however, the 2020 spring/summer selling season did not see its usual spike in homes for sale. The
pandemic began right at the start of the spring season, causing buyers and sellers to delay entering the market.
Sellers were quicker to return, and new homes came to market without commensurate demand. However, buyers
did return with the advantage of more homes from which to choose. Demand has remained high through the
autumn months, and fewer new listings are coming to market. The decrease in inventory has bolstered prices
after the initial run up in supply.
San Jose Inventory
Two-Year, Monthly, Single-Family Homes
Inventory saw a large decline in November as fewer new listings came to market and sales remained high.
1,600 800
1,400 700
1,200 600
New Listings and Sold Homes
1,000 500
800 400
For Sale
600 300
400 200
200 100
0 0
De 18
Jan 18
Fe 19
Ma 19
Ap 19
Ma -19
Jun 9
Jul 9
Au 19
Se 19
Oc 19
No -19
De 9
Jan 19
Fe 20
Ma 20
Ap 20
Ma -20
Jun 0
Jul 0
Au 20
Se 20
Oc 20
No -20
0
y-1
-1
v-1
y-2
-2
v-2
v-
c-
-
b-
r-
-
g-
p-
c-
-
b-
r-
-
g-
p-
t
t
r
r
No
For Sale New Listings Sold
Source: MLS
5. BLOCK CHANGE REAL ESTATES TAT E O F T H E E V E R G R E E N M A R K E T
Months of Supply Inventory (MSI)—the measure of how many months it would take for all current homes for sale
on the market to sell at the current rate of sales—has fallen dramatically since the summer months. In California,
average MSI is around three months of supply, which implies a balanced market that doesn’t favor buyers or
sellers. Currently, supply in Evergreen is slightly less than last year, but it is the high demand that has lowered the
MSI to 0.6 months. The single-family home market in Evergreen strongly favors sellers.
Months of Supply Inventory
TTM, Monthly, Single-Family Homes
Months of Supply Inventory has dropped significantly since May in San Jose and firmly favors sellers.
3.0
2.5
2.1
2.0
1.6
1.5
1.3 1.3
1.2
1.1 1.1
1.0 1
0.9
0.8 0.8
0.6 0.6
0.5
0
Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20
Source: MLS
6. BLOCK CHANGE REAL ESTATES TAT E O F T H E E V E R G R E E N M A R K E T
Key Housing Market Indicators for Evergreen
(95135 and 95148 Zip Codes)
In this section, we take a look at the local housing market in November 2020 across several key indicators in order
to help you refine your winning buying and/or selling strategy. This section specifically focuses on single-family
homes in the 95135 and 95148 zip codes. As the market conditions change in general, and in response to the
global pandemic, we can look at this data in real time to make the best decisions.
Home Prices, Sales, and Inventory
November 2020, 95135 and 95148 Zip Codes, Single-Family Homes
Median Sold Price Average Sq Ft Price Sales Inventory
$1,372,500 $605 28 39
+22% +2% +47% -40%
Median Price for SFH Sold, Avg Sq Ft Price for SFH Sold, Number of Sales of SFH, Inventory of SFH,
Y-o-Y percentage change Y-o-Y percentage change Y-o-Y percentage change Y-o-Y percentage change
Source: MLS
In November, the overall 95135 and 95148 housing market saw higher single-family home prices than the whole
of San Jose. The median 95135 and 95148 single-family home cost $1,372,500, versus the median San Jose home,
which cost $1,260,000. Without the usual inventory, buyers have had far fewer options from which to choose, and
yet, sales for single-family homes have still risen to higher levels than last year. The number of sales shows that
there is still high demand in the area, despite the lower-than-usual inventory.
Buyer's vs. Seller's Market
November 2020, 95135 and 95148 Zip Codes, Single-Family Homes
Months of Supply Days on Market Sale-to-List Price
Inventory
0.3 27 103%
Average months of supply The number of days spent on Sold price compared to the
inventory, includes homes the market for sold listings original listing price
under contract
Source: MLS
7. BLOCK CHANGE REAL ESTATES TAT E O F T H E E V E R G R E E N M A R K E T In November, the housing market for the 95135 and 95148 zip codes favored sellers for single-family homes. MSI is typically around 1.5 for single-family homes in the 95135 and 95148 zip codes. An MSI of 0.3 firmly favors sellers, and the result is that the demand for homes in the area far outpaces supply. Because the environment favors sellers, we could see more inventory come to market as more potential sellers try to capitalize on the current market conditions. However, as we go into the winter months, we expect inventory and sales to slow down. The current Days on Market (DOM) implies that sellers should expect offers to be accepted in about 27 days. If it takes longer to receive offers, sellers should consider reducing their prices. Buyers should proceed with caution and consult with an experienced agent before making an offer on a home that has been on the market for longer than the average DOM, because the price may be too high, or something may be wrong with the property. Sale-to-list-price ratio—a measure of the difference between the original list price of the home and the final sale price—reflects the negotiation power of homebuyers and home sellers under current market conditions. In November, the average single-family home sold for 103% of its original list price, so buyers and sellers should expect to negotiate offers above list price. While the indicators above favor sellers, buyers can take advantage of the current low-rate environment that makes homes much more affordable. 8. BLOCK CHANGE REAL ESTATE
S TAT E O F T H E E V E R G R E E N M A R K E T
The Importance of Listing a Home at the Right Price
We can split homes sold into two categories: homes sold without price reductions and homes sold with one or
more price reductions. Price reductions may indicate problems that need to be fixed, poor marketing, and/or
bad showings. More often, however, price reductions occur because the home was overpriced and misaligned
with market data from the time it was first listed.
Overpricing a home can create a negative feedback loop: initial offers fail to materialize because the home is
overpriced, the Days on Market surpasses the average, and new potential buyers assume there’s something wrong
with the property. More price reductions and low offers may follow as the home sits on the market, which causes
the final selling price to come in below what the property could have garnered had it been priced correctly in
the first place.
For an example of such a scenario, we can look at single-family home data for the 95135 and 95148 zip codes in
November, which is representative of any given month.
Impact of Price Changes
November 2020, 95135 and 95148 Zip Codes, Single-Family Homes
No Price Change (23) 1+ Price Changes (5)
Percent of List Price Days on Market Percent of List Price Days on Market
Recorded Recorded
105% 12 96% 60
Sale price compared to the The amount of days spent on Sale price compared to the The amount of days spent on
original listing price with no the market for homes sold original listing price with one the market for homes sold
price changes with no price changes or more price changes with one or more price
changes
Source: MLS
In November, 23 homes sold without price changes, recording 105% of their original listing prices and spending
only 12 days on the market. In contrast, the five homes that sold with one or more price reductions recorded only
96% of their original listing prices and spent five times as long (60 days) on the market. These numbers underscore
the importance of a well-informed pricing strategy.
9. BLOCK CHANGE REAL ESTATES TAT E O F T H E E V E R G R E E N M A R K E T Conclusion Through the winter months, we anticipate fewer sellers and more buyers coming to the market. Normally, we see the housing market slow at the start of the holiday season, but sales have remained far higher than the seasonal norm. The housing market has shown its resilience through the pandemic and remains one of the safest asset classes. Whether you’re buying or selling a home, it’s still incredibly important to seek out the advice of real estate experts. Our team is committed to serving all your real estate needs while incorporating safety protocols to protect you and your loved ones during the buying and selling process. Please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you. 10. BLOCK CHANGE REAL ESTATE
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