Although the Silicon Valley real estate market is not a monolith, but instead comprised of many micro-markets, as a whole, the housing market is decidedly in a cooling trend. I believe it is beyond what we would call “seasonally normal” for the second half of of the year.
I’m hearing stories and watching good, seemingly well priced houses not budge.
The other day, a Realtor friend of mine held an open house of a colleague’s listing in the Berryessa area. Not one soul came through that open house.
I’m hearing agents talk about great listings that get one or two offers rather than many multiples.
Of course, there are stories like these nationwide. Silicon Valley, though, is a unique economy and often is more resilient than the rest of the country.
Here in Santa Clara County, we can see the data and trends make a compelling case that things have shifted quite dramatically from a year ago. Have a look at the chart for Santa Clara County single family homes, which I just pulled up from MLSListings.com. DOM means Days On Market.
It is unmistakable that the peak of the market was in spring, with sales taking place a month prior to the reflected sales, on average.
All of that said, to know what’s happening, it is absolutely imperative to drill down to YOUR market, whatever it may be. It could be Los Gatos townhouses between $1.5 and $2 million. It could be entry level Saratoga with Saratoga schools. It could be Almaden with whichever high school (Leland, Pioneer, Leigh, Los Gatos). Or some other configuration. What is certainly true is that the relevant market for you, whether buying or selling, is the hyper local market. Even if we look at just one zip code or smaller city, we’ll see that the trends are very similar but not exactly the same. Here’s the same time period and criteria, but for the city of Cupertino, as an example, and you can see that the market decline is milder than for the county as a whole:
Hyper local is usually more than just a zip code, as within the zip code there are different pricing tiers, subdivisions which are more or less prized by buyers, frequently different school districts or other highly important factors.
Let’s consider one more area, the 95136 zip code, which is part of San Jose’s Blossom Valley district. First, all of 95136, then, only the segment of homes sold between 1 mil and 1.5 million dollars.
And next, 95136 between $1,000,000 and $1,500,000 only:
To drill down to the relevant comparables, please work with a local real estate professional who knows how to crunch the numbers and factor in important elements, such as view, schools, pricing tier, etc.. “Easy answers” may make good sound bites, but they don’t make a good basis for an informed real estate perspective for buying or selling. It’s way too important to get this wrong.
And meanwhile, we will be watching closely to see what happens after the mid-term elections and in the new year.