The San Jose Real Estate Market Analysis
The San Jose real estate market continues to be a deepening seller’s market with no signs of letting up.
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 May 2022 sale price to list price ratio for San Jose single family homes slipped again to 113.0% of asking (-3.1% from last month), but remains up from a year ago when was 111.2% (+1.6% from then)
- Home prices are up roughly 17-19% from a year ago (almost a typical 20% down payment!)
- The median sale price is $1,742,500 (a dip from the prior two months, but way up from a year ago, when it was $1,470,000 (+18.5%)
- The average sale price was $1,864,960 (-3.2% from last month, and +17.6% from May 2021)
- The days on market slowed a hair to 11 (same as in May 2021).
War, inflation, stock market, recession concerns – and real estate
Many of our home buyers are financially powered by tech stocks, stock options, and RSUs. When the stock market tanks, some buyers will rush to put their cash into real estate (the quip we often hear is that “real estate does not go to zero” and “at least you can live in it”. At the same time, if the most amply capable buyers don’t want to sell their holdings at a 10% or more discount, that will impact how much they are willing to pay.
For some, the rising interest rates combined with the lower stock values have been a double whammy on affordability in a market still seeing historically high prices.
We are seeing slight signs of cooling in the market with fewer offers and some data points just a hint calmer than a month ago. Prices are not climbing like they were earlier this year, but they’re not falling either and interest rates are rising.
Nationwide, inventory is rising pretty noticeably, and we’re starting to see some growth around Silicon Valley, too. So are we getting back to normal inventory? Let’s have a look at what has historic inventory has looked like in San Jose. (If the chart is too small, click to see in full size.)
At the start of the chart, 2010, the market was still reeling from the 2008 recession, but by 2017 we were seeing a strong sellers market with record low inventory. While listings are certainly up from 2021’s rock-bottom lows, it’s still extremely limited and nowhere near the inventory of more balanced years like 2013 and 2014.
So while inventory has been growing, there is still a shortage. If it continues to grow, prices should level out or drop. But will it be on par with interest rates rising? No one knows.
The data below in the “trends” chart is from our Real Estate Report for the City of San Jose.
San Jose Real Estate Market Trends at a Glance (RE Report)
| Trends At a Glance | May 2022 | Previous Month | Year-over-Year |
|---|---|---|---|
| Median Price | $1,742,500 (-0.4%) | $1,750,000 | $1,470,000 (+18.5%) |
| Average Price | $1,864,960 (-3.2%) | $1,926,180 | $1,585,920 (+17.6%) |
| No. of Sales | 450 (-9.8%) | 499 | 551 (-18.3%) |
| Pending | 656 (-2.4%) | 672 | 652 (+0.6%) |
| Active | 441 (+19.5%) | 369 | 295 (+49.5%) |
| Sale vs. List Price | 113.0% (-3.1%) | 116.6% | 111.2% (+1.6%) |
| Days on Market | 11 (+18.5%) | 9 | 11 (-1.0%) |
| Days of Inventory | 29 (+37.1%) | 21 | 16 (+83.0%) |
Year over year and related charts from MLS Listings
I pulled these directly from the MLS myself today (6/8/2022). The limited data from this month is included in red, but as it is an incomplete picture with data based only on home sales that closed between June 1th – June 8th it should be taken with a grain of salt. As with the earlier chart, click to view the full size.
The San Jose Real estate market’s sale price to list price ratio – notice the huge jump from last year, and then notice the ongoing streak of record breaking highs!
San Jose sale price to list price ratio – click to view larger
Notice that MOST YEARS, but not always, the sale price to list price ratio tends to peak around April with a rise between March and April and a dip from April to May. It fell a little in 2020, but that did not turn into the correction we all anticipated at the start of COVID. Look into late 2020 and you’ll see that all we were actually experiencing was a slight breather – very slight.
Now looking at the most recent numbers, winter 2022 started off raging hot and spring hit it’s peak for overbids in March and began to decline in April. While the sales to list price ratio is slipping, it’s still higher than any past year.
Please keep reading below.
