Normally I view real estate on a local, or even hyper-local, level. But I thought it might also be good to view the big picture and see San Jose as a whole – with nearly a million residents, it would provide quite a snapshot of how Silicon Valley real estate is doing.
Below, please find a graph reflecting the single family home and condo/townhouse market in San Jose as displayed by the absorption rate:
I find this rather remarkably positive – look at the consistent lowering of the months of inventory for both houses in San Jose as well as townhouses and condos in San Jose. It is a very strong, consistent trend city wide.
Why is it not making the papers?
That National Association of Realtors says that more than 6 months of inventory is a buyers market and less is a sellers market. So clearly, this IS a buyers market. But at this rate, will it continue to be one?
Let’s look at the data (care of the Real Estate Report, to which I subscribe). First, find the information for the single family home market in San Jose:
| Trends At a Glance | Sep 2008 | Previous Month | Year-over Year |
|---|---|---|---|
| Median Price | $495,000 | $560,000 (-11.6%) | $736,250 (-32.8%) |
| Average Price | $560,208 | $640,107 (-12.5%) | $826,558 (-32.2%) |
| No. of Sales | 527 | 490 (+7.6%) | 250 (+110.8%) |
| Active | 2852 | 3058 (-6.7%) | 3408 (-16.3%) |
| Sale vs. List Price | 99.0% | 98.6% (+0.4%) | 98.5% (+0.4%) |
| Days on Market | 56 | 50 (+11.2%) | 43 (+28.1%) |
The number of sales is up, but prices continue to slide. Perhaps that’s why the absorption rate isn’t making the headlines.
Next, let’s check out the condominium and townhouse market in San Jose:
| Trends At a Glance | Sep 2008 | Previous Month | Year-over Year |
|---|---|---|---|
| Median Price | $325,000 | $352,500 (-7.8%) | $481,000 (-32.4%) |
| Average Price | $340,046 | $378,691 (-10.2%) | $502,432 (-32.3%) |
| No. of Sales | 164 | 164 (0.0%) | 90 (+82.2%) |
| Active | 1058 | 1117 (-5.3%) | 1355 (-21.9%) |
| Sale vs. List Price | 97.8% | 97.1% (+0.7%) | 99.0% (-1.2%) |
| Days on Market | 62 | 64 (-3.9%) | 57 (+8.0%) |
And again, prices are still falling – about a third, again, over last year. So it’s not yet time to break out the bubbly.
The improved months of inventory seems to be a harbinger of improvement, though. Are we near the bottom? Increased sales indicate that we just might be there.
Interested in buying or selling a home in San Jose, or elsewhere in Silicon Valley? Call or email me. I’m happy to do a free, no-obligation, initial consultation with you to discuss your wants, needs, and dreams.
