Here in the Valley of Hearts Delight, aka Silicon Valley, the market continues to be a buyers market with downward pressure on prices, longer days on market, and bigger gaps between list price and sales price. What is happening area wide or county wide is not always exactly what we find in smaller market areas. Some parts of Silicon Valley, and some price points, are doing quite well relatively, while others are falling through the floor.
What is happening with San Jose real estate? Let’s look at four San Jose districts, mostly in the west valley area, by their zip code (or main zip): Almaden Valley (95120), Willow Glen (95125), Cambrian Park (95124) and West San Jose (95129).
Below, please find the trends for the median list price of single family homes for sale in these four areas of San Jose:
For the most part, it appears that the west valley area of San Jose real estate is continuing to experience noticeable declines in list prices throughout these districts. Interestingly, Almaden Valley and West San Jose (zip 95129) both saw improvement in spring before returning to the downward trend. By comparison, how is San Jose as a whole (the entire city) looking?
This time we’ll view all of San Jose by price quartile to see if the trends are price-point related.
It does not appear to be a price point issue – perhaps simply a location issue. The four areas we’re viewing today all appear to be faring much better than the city of San Jose as a whole. They are more expensive then others which are harder hit such as Blossom Valley, Santa Teresa, South San Jose and Evergreen.
Next, let’s have a look at the median list price for condominiums and townhomes in Almaden Valley, Cambrian Park, Willow Glen and West San Jose:
This is not nearly so consistent. What’s happening? The Silicon Valley real estate market for condos and townhomes has generally gotten pretty beat up this year; the reason is that many who could afford only a condominium or townhouse before can now get into a single family home instead. The areas in which there’s an uptick in pricing are those with stronger schools. Willow Glen is extremely charming and centrally located, but the public schools generally do not perform as well ss those in the other three areas in which prices are holding up a little better. So perhaps it is that good schools are driving home sales.
Again, let’s compare the San Jose condo market in these four areas to all of San Jose and see it by quartile:
Again, the San Jose condo market, especially in the lower price ranges, has had a very steady downward trend in list prices. In Almaden Valley, Cambrian Park, Willow Glen and West San Jose, there is decline noted, but not so severe.
What can we expect next? Economists vary on when they see recovery happening in Silicon Valley and San Jose in particular. As long as foreclosures are a large part of the resale market, it will put downward pressure on prices. As I see it, while there are adjustable rate loans continuing to adjust upward (which is happening now, particularly with the volatility in the indices used such as the LIBOR), there’s a threat of more short sales and bank owned sales pulling the market down. My sense is that things may improve a little after the election because the uncertainty has buyers additionally nervous. The market tends to go quiet as we enter November and December, even in “good years”, with the next burst of sales activity normally beginning again after the Super Bowl.
With prices declining and buyers nervous, it’s actually a good time for those who are a little more risk tolerant to buy now. This is especially true for investors as the demand for rentals is high and rents are climbing while sales prices have dropped. If you would like to investigate the possibilities of buying or selling, please call or email me today.