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The San Jose Real Estate Market Analysis

San Jose Real Estate MarketThe San Jose real estate market remains in transition. While it is still a clear seller’s market, things are much cooler than what they were earlier this year. Demand may have shrunk, but so has inventory, so we’re not seeing dramatic cooling.

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 October 2022 sale price to list price ratio for San Jose single family homes dipped to 99.7% of asking (-0.6% from last month), and remains below last year for the fifth month in a row.
  • Monthly home prices are up a sliver from a year ago after falling below last year in August for the first time since 2019
    • The median sale price remains $1,450,000 – astonishingly consistent with the month before and with last year!
    • The average sale price was $1,582,630 (+1.7% from the month before, and +2.4% from last year)
  • The days on market held relatively stable at an average of just under a month at 27 days, almost twice as long as last year.

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”.

For some, the rising interest rates combined with the lower stock values have been a double whammy on affordability in a market still seeing sky high prices. If the most amply capable buyers don’t want to sell their holdings at a 10% or more discount from what they were, that will impact how much they are willing to pay.

We are finally seeing signs of cooling in the market with homes recieving fewer offers than they may have at the peak of the market, and prices are coming down. That said, much of the entry-level market is still raging hot. The best homes, when appropriately priced and marketed, are still recieving multiple offers and selling well above asking.

However one thing is keeping the market hot: limited inventory. Nationwide, inventory has begun to drop again and overall we remain in a housing supply shortage (each market will vary, of course). So how far off are we from “normal” inventory levels? Let’s have a look at historic active listings in San Jose. (If the chart is too small, click to see in full size.)

San Jose Historic Active Inventory 2022-11-15

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 limited and well below that of more balanced market years like 2013 and 2014.

Will the shortage of homes lead to wild market action like earlier this year? Unlikely. With everything else that’s changed such as the interest rates rising. But will it continue to cool or will it heat up again in autumn? We’ll have to wait and see.

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 Oct 2022 Previous Month Year-over-Year
Median Price $1,450,000 (0.0%) $1,450,000 $1,450,000 (0.0%)
Average Price $1,582,630 (+1.7%) $1,556,090 $1,544,870 (+2.4%)
No. of Sales 329 (-12.0%) 374 519 (-36.6%)
Pending 516 (-11.2%) 581 624 (-17.3%)
Active 357 (-19.0%) 441 249 (+43.4%)
Sale vs. List Price 99.7% (-0.6%) 100.4% 108.5% (-8.1%)
Days on Market 27 (-3.9%) 28 15 (+88.0%)
Days of Inventory 33 (-4.8%) 34 14 (+126.2%)

 

Please keep reading below for more data and market analysis.

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Berryessa

Once full or orchards and farms, the Berryessa area of San Jose today is largely developed, but a few pockets of trees and agriculture do remain. Most of this district is housing, but there are also a good number of businesses. (The photo below is from a property I sold in this part of North San Jose in 2021.)

Berryessa boasts very strong commute access, including both light rail and BART as well as major auto routes. Highway 680 runs through it, and 101 and 880 are nearby. Additionally, the major airport for Silicon Valley is in close proximity, too, the Norman Y. Mineta San Jose International Airport. For the South Bay, this is one of the most accessible areas. This and the quality of many of the schools are perhaps the area’s biggest claim to fame.

 

Berryessa Orchard - property sold by Mary Pope-Handy

Where is Berryessa?

Berryessa is in the northern part of San Jose, set between the city of Milpitas to the north and the Alum Rock District to the south. The boundary on the east side is the East Foothills. The boundary on the west is Coyote Creek, approximately. Some resources may put it closer to Highway 101. (If you check  5 different sites, you may get 5 different answers for the boundaries on the west and south side of this district!)

Zip codes are 95131, 95132, 95133. (The MLS also includes a little of 95127, which is often thought of as Alum Rock Park.)

Another interesting, nearby area in San Jose is Japantown.
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Where are Santa Clara County’s Earthquake Faults and Flood Plains?

Where are Santa Clara County's Earthquake Faults and Flood Plains_Earthquake faults and flood plains are of interest to home buyers throughout the Golden State and to their lenders, too. Part of the home sale and home buying process is to provide information on these risk factors so that consumers (and their lenders) can make an informed decision.

Natural Hazard Reports are included in the disclosures when homes are bought and sold here in Silicon Valley. Those reports will indicate whether or not the property is located in areas with known natural hazards, including

  • Flood Plains (100 and 500 year floods from heavy rainfall)
  • Liquefaction Zones
  • Earthquake Fault Zones
  • Unstable Soils Areas (landslide areas)
  • Flooding from dam failure zones

But wouldn’t you like to know where those places are before ever deciding where to target your next home?

Mapping Earthquake Faults and Flood Plains

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There are still some original adobe houses in Silicon Valley!

It’s possible to live in Silicon Valley and have no idea that there are still some original adobe houses to be found right here in the San Jose area. Today, though, I hope to help some of our residents discover the past which is lurking right in front of us!

The historic Adobe Woman’s Club is just a block or two off the campus of Santa Clara University, tucked away on a side street now that The Alameda is re-routed as The El Camino.  Address: 3260 The Alameda, Santa Clara.  According to the state’s historical preservation site, this state landmark # 249 is one of the oldest in the Santa Clara Valley, was built between 1792 and 1800 and was one of many row houses built for the native Americans who worked at Mission Santa Clara.  Please note that this is private property and you may not enter without permission, but the adobe abode is very visible from the sidewalk.

Today the beautifully preserved adobe house functions as a nonprofit group with these objectives: “to promote educational, moral, social welfare, cultural, civic and community service.  Anyone who supports these objectives is welcome.”  This scenic place can also be rented out for private events.  The garden is quite lovely and the interior appears to be very modern.  You can see photos of the inside of the house at the club’s website: The Santa Clara Woman’s Club.

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Finding scenic places in which to live in Silicon Valley

View from Montevina Road in Los Gatos, Scenic Silicon ValleyIf you arrived into Silicon Valley via Highway 101, driving south from San Francisco, you might believe that the Santa Clara Valley, the San Jose area and Silicon Valley as a whole has got to seem to be the ugliest place on earth. Although heavily traveled, that is not the “scenic route”.

So, too, if you are looking for a place to live and are groping to find a place that is reasonably priced, fairly safe and not a terrible commute distance. You might not even have “is nice looking” on your wish list. You might not think it’s possible if all you ever see are the ugly concrete tilt-up buildings in north San Jose, Santa Clara, Alviso, or anywhere along the 237 corridor.  That area is an architectural wasteland.

Let me assure you: there are a lot of beautiful places in Silicon Valley where you can rent or buy a home. But how do you find them? It helps a lot to have a local give you a few pointers.  I’ll give you some tips today on finding a scenic place to live.

Hills – An easy way to find a scenic location to make your home is to settle near the hills, especially those in the west valley (the Santa Cruz Mountains or the Coastal Range) as they are green year-round. Communities at the base of the west valley foothills include, in Santa Clara County, Palo Alto, Los Altos, Los Altos Hills, Cupertino, Saratoga, Monte Sereno, Los Gatos, and the Almaden Valley area of San Jose. All of these areas are adjacent to the hills or mountains and offer far better than average schools (many of them qualify as great – compare costs between these areas). (more…)

Santa Clara County Parks – An Introduction

Santa Clara County Parks – Silicon Valley Area Parks

Here, please find links and a little info on the wonderful county parks in and near Silicon Valley.

Wildlife caution – A word to the wise: in the grassy, hilly areas especially, please hike or jog with friends and pay attention as you walk or run the trails. Rattlesnakes tend to sun themselves in the clearings – which means on the path! Mountain lions, also known as pumas, are not commonly seen but they are indigenous to the area, as are ferrel pigs, bobcats and coyotes. Any of these could ruin your day with a wrong encounter, so please go in groups and pay attention to your surroundings!

Almaden Quicksilver this was once the largest mercury mine in the world, named after a similar mine in Spain. The mine shafts extended all the way into what is now Los Gatos (off Hicks Road) This is a great spot for field trips. While in that area, don’t miss the split graveyard on Bertram Road- and look the grave for just Bert’s arm (nope, I’m not kidding).

Alviso Marina they stopped dredging this years ago but it is now a park. Eventually there will be a trail ringing the bay. Awesome place to bird watch and take photos.

Anderson Lake waterskiing destination in the east foothills over Morgan Hill

Calero south of Almaden toward Morgan Hill.

Chesbro Reservoir west of Morgan Hill – fishing & non-power-boating. No trails yet.

Chitactac Adams Heritage County Park now this is cool – it’s a 4 acre site just outside Gilroy and Morgan Hill which is all about the Ohlones who used to inhabit this beautiful valley of ours. Free park. Open from 8am til sunset. Self-guided tours available.
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Ratio of Listings to Sales in Silicon Valley Real Estate

Today we’ll look at the ratio & relationship between real estate listings and sales of houses and duet homes in Silicon Valley over the last eighteen months. The goal is to get a sense of the market trends in terms of the overall absorption of homes for sale.  (We’ll give a glance at condo and townhome sales but the focus is on single family homes.) How hard is it to sell a home?  The answer has to do with supply and demand – the number of listings and the number of sales.

In the graphs below, the reddish brown line represents the number of pending sales.  The blue line indicates the number of listings or homes for sale. Put simply, the closer these two lines are together, the hotter the market – that is, the more of a seller’s market it is.  When they are far apart, it’s more cold, more of a buyer’s market.  If the lines cross, it is a wild frenzy (that does happen in one case, as you will see). Below please find the graph for the homes in Santa Clara County overall (all areas).

 

Santa Clara County listings to sales Jan 2009 to June 2010

 

You can see that these two lines pinch together in about December 2009 to January 2010.  Prices had dropped and investors were swooping in! The  market has cooled since then.

 

Santa Clara County condo & townhome listings to pending sales March 2008 to June 2010

Santa Clara County condo & townhome listings to pending sales Jan 2009 to June 2010

 

For condos and townhouses, all of Santa Clara County:Here the two lines  – or the market – were close together for about 3-4 months.  Buyers understood that condominiums in Silicon Valley were bargain priced, and they responded by buying.Now let’s look at various areas around the county.  We’ll take these in Alphabetical order, beginning with Almaden Valley.

 

Almaden Valley listings to pending sales March 2008 to June 2010

Almaden Valley listings to pending sales Jan 2009 to June 2010

 

As you can see, the market improved but never got as “hot” as in the county generally.  This is because it’s a more expensive area, and most of what was selling in winter consisted of entry level housing.

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How Big is a Realtor’s “Territory”? How Local is Necessary, How Far is Too Far?

booklet-watercolor-valley-of-hearts-delightA year ago October, I attended the National Association of Realtors convention in San Francisco and met a highly successful, very experienced and decorated (awards, designations) agent from the east coast. When I asked her which part she was from and worked in, she rattled off about 4 large counties. (I’m familiar with the area, so wondered where she was within it.) She did not want to tell me where her office was because she sold in all four or so large areas. She had what I considered to be a huge turf! Her idea of “local” was over 50 miles in diameter – maybe 70 miles or more!

Some agents claim huge territories where they work!

And then a  month or so ago, my husband, Jim Handy, and I attended a party at a lovely home in Santana Row and one of the guests asked me where I worked.  I told her that  I sell all over Silicon Valley, mostly in the “west valley communities” of Los Gatos, Saratoga, Campbell, Almaden Valley and Cambrian Park, but I have listed and sold all over. This gal wanted me to tell her that I worked only in Los Gatos, or only in Cambrian Park or Almaden Valley etc. and it was hard for her to imagine I would really work all of the San Jose area.  Just last week I got a similar question from someone who lives and works in Los Gatos – she seemed to think that agents who work in one town only work in that town.

Some home owners have the same mis-perception that agents only work a very tiny region, such as just Los Gatos or just Saratoga.
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