Are home prices dropping in San Jose CA and nearby? Is the Silicon Valley real estate market seeing price reductions? San Jose is a large, sprawling city with about 1 million residents, so checking the San Jose real estate market a good marker for how the region is doing as a whole.
About the price drops, the quick answer is yes and no. Month over month, it’s true that home prices have inched down slightly. But year over year, they are still up significantly. The year over year part is more significant, because many years, maybe most, prices pull back a little from May to June and June to July. In other words, it is seasonally typical for prices to fall a little during this time of the year.
Are home prices dropping in San Jose CA? What does the data say?
Here’s a look at the average sale prices in S.J. from 2004 to the present for single family homes. The month of July is highlighted in yellow, generally. Most years are the darker yellow, but the “off” years where prices are a lower are in a paler yellow.
This same data may be better understood visually by some readers, so here’s a graph of the average home price in San Jose, CA, from 2004 to the present.
When viewing the multiyear graph, it is evident that if home prices are dropping in San Jose, CA, is is only the normal ups and downs found seasonally. The overall trajectory of prices is up.
Many residents wish that real estate prices would crash so that it would be easier to buy a house or condo. A correction is surely coming, but when prices drop a little, instead of jumping on it, many would be home buyers hold off – hoping that the price cuts will go deeper. In 2019 we had a little pullback. Some buyers plunged ahead. Others waited and hoped that values would drop. Instead, Covid hit and we had about 20% appreciation in prices.
Right now, we are experiencing a seasonally typical softening. You can check the month over month numbers above and see that many or most years, there’s a little price drop in summer as compared to spring. So it’s an opportunity, if you can find anything you’d like to purchase and can swing it.
The numbers above cover single family homes the entire city of San Jose CA, but if you’d like to drill the information down to a particular district (Cambrian, Evergreen, Willow Glen, etc.), please check the stats on my Santa Clara County Real Estate Report. At the top, click on “change” to select San Jose, then for “neighborhood, choose which area of SJ you want. Alternatively, you may also find info on the San Jose condo & townhouse market there as well. (Plus: Santa Cruz County & San Mateo County.)
Are home prices dropping in San Jose CA? If you mean seasonally typically, then ok, prices are off a little from June. But substantially, no. Right now there are no indicators that the housing market in the capitol of Silicon Valley is about to crash.
Will prices drop in the future? Yes – real estate values go both up and down. Like the stock market, though, the overall trend is up. It’s difficult, or maybe impossible, to pick the exact peak or trough of any market. Right now, interest rates are low, and that is a huge help. If you want to buy a home and are able to do so now, I would not advise waiting. One look at the graph above explains my reasoning. (Do a search on interest rates over time – that is the other half of the formula for any home buyer needing a loan to buy.)