The real estate market in the San Jose area is softening just slightly. Today we’ll consider townhomes in one particular zip code, in west San Jose 95117, to see how this shakes out.
Because real estate market dynamics are largely about supply and demand, a good place to begin is by seeing the supply. Here, in the image below, see the inventory of available townhouses or townhomes for sale in 95117. Some statisticians including sale pending status, but I don’t think that is wise since nearly all of the pending sales do go to closing. Here, I’ve only included properties for sale without any kind of agreed upon contract between buyer and seller.
As of earlier today, there were exactly 3 properties identified as townhouses listed as available in the MLS. What makes this a little tricky is that “townhouse” is an architectural style, and “condominium” is a type of ownership. That could be the topic of a lengthy article all by itself, but some townhomes are held in condo ownership and some are not. Hence, some will be classified by the listing agents as condos and some not. (And, to murk things up even more, there are attached and detached single families homes that are also held in condo ownership – making them both houses or attached houses and condos!)
Be that as it may, as of this morning, there were three townhouses for sale in San Jose 95117. The average of the first 6 months of the year is 2.17, so yes, it’s a bit more, but nothing that I’d lose sleep over. Have a look:
Naturally, we need to see a few real estate market indicators to have a sense of what’s going on. Another good measuring stick is the average days on market, or days to sell. Here, it may be a bit more clear that the market has softened just a bit for townhomes in 95117, as the days to sell has moved to 12 from 8, which is a 50% increase. It’s also clear when viewing the same month, June, in recent years, that this is a tad higher. Alarming? Not at all. Getting a home sold in under 2 weeks would be break-neck speed anywhere else in the country. But – it could be the beginning of a trend. We’ll have to watch it to know for sure.
And, finally, the sale price to list price ratio. Here, again, it’s very plain to see that the sale price to list price ratio is lower than earlier in 2018. And at the same time, we need to appreciate that at 117.9%, it’s significantly higher than any other June since 2012 (and likely a lot longer back). Now, take a look at the other “Junes” and the months before it in various years. Most of the time, that number is lower. This suggests a seasonal trend.
With the inventory and days to sell or days on market, I don’t think it’s as clear that there is a pattern which we might attribute as seasonal. With this last one, though, it seems pretty consistent, suggesting that we should almost expect it to happen. Of course, I only went back to 2012 here, but I would say that in my experience, a little pullback from buyers at about this time of year is pretty normal – at least most years.