The San Jose real estate market remains red hot. While it is a clear seller’s market, remaining active into late summer, it’s a very different market compared to last year’s spring peak. Demand may have shrunk, but inventory has plunged to extreme lows so it’s still far from balanced!
First, some quick data from my RE Report via the bullets and chart below. There appears to be a small amount of undercounting or overcounting between the RE Report and MLS Listings, but the information is still good for tracking trends.
The August 2023 sale price to list price ratio for San Jose single family homes slipped to 105.8% of asking, that’s -1.3% from last month per the RE Report and +5.9% from this time last year when the market was falling. For the MLS stats we pulled today, however, it shows 105.2% average in August, down from 106.9% (-1.7%) in July. Either way, the average home is selling consistently over list price in San Jose with consistent overbidding through summer.
Home prices are up from last year by approximately 12%-15% after being behind for much of this year (RE Report), and month-over-month closed sales values remained mostly stable.
The time on market sped up a hair month-over-month to a 15 day average (RE Report). When I pulled them directly, it was 17 in August and 16 in July (not shown below). Either way, it’s quick turnover averaging well below a month, making it a clear seller’s market.
Market Data: What Numbers Make a Difference
While prices and overbids have fallen significantly since last year, in some ways this year has been even more challenging for buyers. For most buyers, their ability to purchase has been severely impacted by higher rates on home loans. But the biggest hurdle for many buyers is the extreme lack of available homes.
Since March 2023 San Jose has had record breaking low inventory, continually breaking records as the lowest available listings by month in over a decade, according to the MLS data pulled today in the chart below. And it doesn’t look like inventory will be picking up any time soon, either.
Why such low inventory?
While in a more typical market we might have a number of sellers looking to “move up” or downsize, most homeowners today couldn’t afford to move or don’t want to take on a higher-rate mortgage. Now it seems like a higher percentage of the listings we are seeing comes from investors, people leaving the area, and sales by family after a death – cases where there is no pressure to repurchase or where selling is the only option. That limits significantly what is available to buyers!
Although inventory remains at record-breaking lows with higher demand than availability, sale prices and overbids are not breaking records like last year’s peak. Many buyers are experiencing significantly more pressure from higher interest rates, fluctuating stocks, and other factors limiting purchase power and lowering confidence. That said, not every home will face the same challenges – there are loads of micro markets that influence how well any given home does, so take this city-wide data with a grain of salt.
Inventory remains severely low – if you’re an active home buyer, it is slim pickings!
San Jose Real Estate Market Trends at a Glance (RE Report)
Trends At a Glance
Aug 2023
Previous Month
Year-over-Year
Median Price
$1,610,000 (-0.6%)
$1,620,000
$1,400,000 (+15.0%)
Average Price
$1,707,110 (+0.4%)
$1,701,140
$1,522,860 (+12.1%)
No. of Sales
311 (+16.5%)
267
358 (-13.1%)
Pending
272 (+5.4%)
258
501 (-45.7%)
Active
224 (+5.2%)
213
532 (-57.9%)
Sale vs. List Price
105.8% (-1.3%)
107.2%
100.0% (+5.9%)
Days on Market
15 (-8.1%)
17
23 (-34.0%)
Days of Inventory
22 (-9.7%)
24
45 (-51.5%)
Available inventory is about a third of what it was this time last year, while pending sales are not quite down by half, and closed sales have barely budged by comparison. Please keep reading below for more data and market analysis.
The Milpitas real estate market has experienced some recent ups and downs and although it’s not the same as it was at last year’s peak it remains a strong seller’s market.
Here are a few points from the latest update to the Milpitas single family homes market, with more data and analysis in the article below:
The sales to list price ratio has had some pretty wild swings since around mid-spring, skyrocketting in May, with much milder rising and falling in the following months. Compared to this time last year, homes are selling much higher over asking, averaging 104.1% in August, and it remains a strong seller’s market.
Listings averaged 20 days on market, twice as long as the month before, and about equal to last year.
The average single family home price in August was $1,618,540 (+6.0% from the month before, and up a major +11.7% from a year ago)
The median sale price rose to $1,515,000 (+7.3% from the month before, and up +5.4% from last year)
Inventory grew significantly, pending sales barely budged, and closed sales slipped month-over-month. Compared to this time last year there are just half the available homes and only about a third less closed and pending sales.
Market activity is elevated in Milpitas, but may be cooling off as the summer season comes to a close. We may see continued softening if inventory continues to grow, but unless it grows dramatically buyers will continue to struggle with the severe housing shortage and the market will remain red hot.
The Milpitas Real Estate Market
Milpitas is perpetually attractive for home buyers as the location is convenient and offers good schools. Many areas are close to the hills and enjoy scenic views, too.
So let’s look at some data. First up, the Altos charts using list price and active listings. It is updated automatically on a weekly basis, so check back often:
What is the agent visual inspection, or AVID, and why is it required with home sales in California?
The short answer on the purpose of the AVID
When real estate sales people represent buyers and sellers on residential real estate transactions in CA, they must do a visual inspection of the property as part of their disclosure obligations. In other words, they are required to walk through the property, inside and out, and look carefully at what they sell and advise the parties to the contract of any red flags noticed.
This is required by the state. It is not optional.
If an attentive Realtor walks through and notes something that would make a buyer unhappy to discover after close of escrow, that agent needs to note it on the required form so that any such concerns are disclosed to the home buyer(s).
Video discussing the AVID, or Agent Visual Inspection Disclosure
Where do the agents write up their visual inspection disclosure comments?
Agent Visual Inspection Disclosure, top of page 1
Sometimes the real estate licensees will simply make a few comments on page 3 of the Transfer Disclosure Statement (TDS). More and more, though, they are completing the separate 3 page AVID (Agent Visual Inspection Disclosure) form instead. It is larger and allows for more thorough list of items noted. Both approaches are permitted by law to fulfill that obligation, though.
The difference between a duplex and a duet home is not obvious, and many people may think they are the same thing. Duplexes and duet homes both involve two attached residential units. But legally and financially, the difference between a duplex and a duet home is huge!
Below we’ll review:
Video explanation of the difference between a duplex and a duet home
What is a duplex
What is a duet home
How do you know if a property is one or the other
Can the type or classification be changed?
The photo to the right is of a San Jose home I sold a few years back. You cannot tell from the image, but there is a front door off to the right of the single car garage door, and back around on the left side, near the double car garage door, there’s another front door. There are 2 units. It is a duplex or a duet home? You cannot necessarily tell by looking!
Video explanation of the difference between a duplex and a duet home
What is a duplex?
A duplex is a multifamily home, in the same category as a triplex or fourplex, meaning there are multiple living units. Most of the time, they are attached to each other, but not always. But what is truly distinctive is the way they are bought and sold. With multifamily homes, such as a duplex, all of these dwellings are sold together. (The units are not sold separately.) (more…)
The Sunnyvale real estate market, like the rest of Santa Clara County, has remained hot with a couple of cooling datapoints, some of which is seasonally typical.
Sunnyvale real estate market trends and stats at a glance
Here is a quick rundown of the trends at a glance for the Sunnyvale real estate market, with more in the charts below:
The average sale price of Sunnyvale homes dropped compared to July after climbing for months.
Prices are now up year over year by 11%.
Inventory has continued to fall, with a meager 13 listings (single family houses) in Sunnyvale on the last day of August.
Pending sales are down, monthly and annually, but the culprit is lack of inventory, not lack of buyer interest. Note the ratio of pending sales to available listings. That tells the story best. There are literally more than twice as many homes pending as there are for sale.
The sale to list price ratio dipped a bit to 107.0%, down from 108.1% in July. This is far above August 2022.
PLEASE visit our ReReport page for data here, throughout Santa Clara County, and also for San Mateo and Santa Cruz Counties.
(If you’re viewing this on a mobile phone, swipe horizontally to see the full chart if it goes off the screen.)
This post on the coronavirus impact on real estate sales here in Silicon Valley is updated periodically, depending on unfolding events, so please check back often.
The market for houses is hot (still)
The coronavirus pandemic caused a worldwide surge of buyers rushing to purchase homes with more square footage, more rooms (home office, room for elderly parents to move in), and more outside space.
Locally, single family home prices rose about 20% over one year, despite the initial lockdown and restrictions on showings. Pools had not been so desirable pre-Covid, but now they are more sought after as buyers want to vacation at home.
Initially, it was challenging to sell a condo or townhouse, particularly if there was no patio, balcony, yard, etc. Those homes did start appreciating, but have not performed nearly as well as detached housing has.
Now, in September 2021, many of the requirements have been lifted. Buyers are still interested, but the steep appreciation has priced some buyers out of the market.
Quick overview of what is and isn’t allowed with real estate listings and sales
The landscape for home sales is complicated and more restricted than pre-pandemic times, but easier than it was in March – May 2020. The market is strange in many ways, but it is possible to buy and sell now and actually is not so hard at this point.
Example of a Santa Clara Valley home with a creek behind the house. Not every waterway is scenic.
Silicon Valley has a bad case of “urban sprawl”, unfortunately, but there are places in San Jose and nearby where creeks meander through neighborhoods, offering a little extra space between back neighbors. This extra breathing room is valued by homeowners with a creek behind the house. They often cite the pleasantly rural sounds of frogs and birds as an added bonus.
But some home buyers are a little spooked. Are there risks with buying real estate next to a waterway? Would the home flood in heavy rains? Is there an excess of unpleasant wildlife to worry about? One of my buyer clients was concerned that burglers would use the creek’s access path to steal things and get away unseen. Another was afraid of cougars or bobcats or other unwelcome visitors coming in from a creek or tributary.
When Jim and I were newlyweds, we lived in a townhouse on Neary’s Lagoon in Santa Cruz (a bird sanctuary) and I have sold several homes along creeks or ponds, so will make some comments based on my experience.
Creek behind the house: scenic or not?
In general, I would say that being next to or near a creek most often will improve the value of the home because creeks are scenic and also provide a space buffer between rear neighbors. They frequently have beautiful old trees framing their banks and are slightly curved, too, so these are usually quite pretty. I won’t say that living next to a waterway which looks like a Los Angeles flood control channel would be beautiful or enhance a home’s value much, though the space between neighbors would still be appreciated. Each case must be judged on its own merits.
Wildlife at the water’s edge
It is true that there will be more wildlife near water, whether it’s a creek, river, reservoir, pond, or percolation pond. Birds, reptiles and animals need water and will seek it out. If you love nature, you may welcome the sound of frogs and geese, and perhaps secretly hope to see a wayward deer! If you decide to live near water, it is very important to make sure that wildlife cannot enter your home (chimney, attic and crawlspace included) and it will require some ongoing diligence to keep them out because they will be drawn to the water over and over again. I’ve known people adjacent to water to have some challenges with birds, bats, mice, rats, and other creatures trying to make their way in. But that can happen anywhere. At our current home, which is not next to or near a creek, we had a squirrel try to claw its way through flashing on our roof to get into the attic. Another time we had a possum or raccoon get into the attic. Be clear that being away from the water doesn’t mean “no wildlife issues” – but if you are next to water, you will probably face them a little more often.
Floods and flood plains – what is the risk if there’s a creek behind the house?
Creekside locations do not all flood; this is perhaps the biggest misconception. When buying a home, you can check the flood plain status via the Natural Hazards Disclosure Report, which the seller provides. You can also check online at the CAL My Hazards Awareness site. And please know that there are different types and levels of flood plains – they are not all the same! The one which requires flood insurance is called a 100 Year Flood Plain and in those locations, water of up to 1 foot may be expected once every 100 years (so not that often). There are 500 year flood plains and areas which are “dam failure inundation” zones (if a dam were to break, water downhill would flood, of course).
Protected species that depend on the waterways
We have a number of protected species in California, including certain frogs and salamanders. If your home (or the one you want to buy) is in the habitat area of those animals, birds, or reptiles, you may have some constraints on landscaping near the creek or water. Most of the time it involves not placing a fence within so many feet of the creek and using only native landscaping in that area close to the creek too. Just know that having a creek behind the house may carry extra responsibilities and restrictions.
Crime?
As for crime, I would have to say that you want to always check a site like CityProtect.com or similar sources to know what’s happening. We do have crime everywhere, and all kinds, to varying degrees. Most creeks do not have easy access to people’s homes or yards, and often the service road along the creek is a rough gravel, so I have a hard time picturing burglers trying to get in and walk their stolen loot a ways down that path. But check the reports. Realtors are not crime experts and we cannot make promises about any area or location.
Where can you find gated communities in San Jose or Silicon Valley? There aren’t many of them! (It is a myth, however, that the Silver Creek Valley Country Club is the only one in Silicon Valley. That’s just not true.) There are fewer than a dozen, though, and in this post I’ll provide some basic info on each and links to the home owner association for each so you can learn more if you so desire.
Most of these enclaves include neighborhood pools. Some also boast golf courses, spas and restaurants. One even has riding stables!
Evergreen gated communities
In the Evergreen area of San Jose (the east foothills), there are very two very large gated residential neighborhoods: The Villages, which is a retirement community for seniors (and has age restrictions, one resident must be 55+) with many luxury amenities (pools, tennis courts, horseback riding stables, bocce ball, and more).
Silver Creek Valley Country Club, which is the largest and best known gated community in Santa Clara County, is also found in the east foothills in the Evergreen area. A big complex and elegantly appointed, the Silver Creek Valley Country Club is also the most expensive of the gated communities. Silver Creek centers around a well known, beautiful golf course, and features a wonderful clubhouse as well as multiple pools. Some communities within Silver Creek have their own HOA, so it is possible to end up paying HOA dues to both Silver Creek and also a neighborhood HOA to boot.
A blind real estate offer is a purchase contract which is written by a buyer when the property is sight unseen. There are commercial properties, such as apartment buildings, in which this is the norm, and it’s not surprising for multi-family units such as duplex to fourplex properties. It is uncommon with single units or homes.
Right now we are in the midst of a Shelter In Place order due to the coronavirus pandemic. Current restrictions do not permit the showing of homes, inspections, or appraisals – though the latter two may change or get adjusted somewhat as this order persists. If you want or even need to find a property, how can you do it with this restriction? It is not advisable, but some would-be home owners are writing blind real estate offers.
It makes sense for a multi-unit property to be sold this way because the investor cares most about the numbers. How’s the cash flow? Are the reserves good enough? When will the driveway need repaving? All of these items address the question of whether or not it’s a good investment, a good business decision.
Blind real estate offer on your own future home
Buying a home that you are going to live in needs to make sense financially, but you also need to like it. You need to see if the home has enough light, if the rooms feel crowded or spacious. You must learn if there are floors out of level or odors or other issues undetectable from a virtual tour or series of photos.
Before the broad Shelter In Place order, I showed a home in Gilroy, and one of my clients had an allergic reaction in the house. Maybe it was the new carpet? Who knows – but it was imperative that we visit the property in person.
Blind real estate offers are dangerous since they curtail the buyer’s ability to have properly vetted the property. They are also dangerous for the seller, who can get the house tied up with a buyer who may or may not be willing to go through with the sale once the home is finally seen in person. If the Shelter In Place order continues for 2 or 3 months, which Governor Newsom suggested yesterday, it’s possible that access by appraisers or real estate agents may not be permitted for a long time. Long escrows carry their own risks.
A plat map comes with your preliminary title report (provided by your title company with maps from the Santa Clara County tax assessor’s office when you purchase or sell a home in California), tucked away at the back and somewhat mysterious with lots of numbers in small print. It holds quite a bit of helpful information if you know what it is you’re seeing. Today we’ll view a sample of one of these – breaking down the plat map shown as a small thumbnail image on the right to more readable parts so that you can learn how to “read” or understand a plat map.
Quick overview of what’s on a plat map
There’s a wealth of information on the plat map. Take a look and see what you can pick out on your own first.
Christie's International Real Estate Sereno, Los Gatos, CA 95030 408 204-7673 Mary@PopeHandy.com License# 01153805
Clair Handy, Realtor
GREEN
Christie's International Real Estate Sereno 214 Los Gatos-Saratoga Rd Los Gatos, CA 95030 ClairHandy@sereno.com License# 02153633
Mary & Clair sell homes throughout Silicon Valley: Santa Clara County, San Mateo County, and Santa Cruz County. with a special focus on: San Jose, Los Gatos, Saratoga, Campbell, Almaden Valley, Cambrian Park.
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The San Jose real estate market remains red hot. While it is a clear seller’s market, remaining active into late summer, it’s a very different market compared to last year’s spring peak. Demand may have shrunk, but inventory has plunged to extreme lows so it’s still far from balanced!
The Sunnyvale real estate market, like the rest of Santa Clara County, has remained hot with a couple of cooling datapoints, some of which is seasonally typical.
