The San Jose real estate market is now clearly in transition. While it remains a strong seller’s market, things are beginning to cool off from where they were earlier this year.
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 2022 sale price to list price ratio for San Jose single family homes slipped again to 100.0% of asking (-1% from last month compared to -5% drop in July), and remains below last year for the third month in a row.
- Average monthly home prices are down from a year ago for the first time since 2019
- The median sale price is $1,400,000 (-5.4% from the month before, and -2.4% from a year ago)
- The average sale price was $1,525,840 (-5.0% from the month before, and -2.0% from last year)
- The days on market slowed again to an average of 3.5 weeks at 24 days, 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.)
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
|No. of Sales
|Sale vs. List Price
|Days on Market
|Days of Inventory
Please keep reading below for more data and market analysis.
The historic Naglee Park Home Tour in San Jose will take place on Saturday April 21, 2018 from 10am to 4pm. Sponsored by the San Jose Woman’s Club, this is the seventh year of the annual tour. This year, proceeds go towards the renovation of the Women’s Club 1929 Spanish Revival Clubhouse.
Tours include access to seven homes along two adjacent blocks in Naglee Park, and shows off both their lovely living quarters and gardens. Visitors have the option of pre-ordering a lunch box, and wine and refreshments will be available at the Refreshment Garden. The tour also features a lecture and open-air market.
The SJWC does not have any information on their website as of yet, however the Eventbrite page, where you can purchase tickets, has details, as does the Facebook Event Page.
For tickets and information: https://www.eventbrite.com/e/sjwc-naglee-park-vintage-home-tour-tickets-42695715033
Historic Naglee Park Home Tour in San Jose was on the same date, April 21, back in 2012 for the 3rd annual tour.
The Naglee Park neighborhood in downtown San Jose is one of the most charming and historic areas in Silicon Valley. Known for older, beautifully maintained and updated homes, it boasts an annual historic homes tour.
Located just east of San Jose State University, it is extremely convenient for those involved with the college or who work downtown. Scenic Coyote Creek is its eastern boundary, Highway 280 the southern one, and E Santa Clara Street the northern edge of this community. This neighborhood is also close to the ever popular Happy Hollow Park and Zoo (which is in south San Jose, also along Coyote Creek).
What are homes in Naglee Park like?
Houses and homes in Naglee Park are primarily older, with the most historic being constructed in 1890. The average year built is 1935 as some of the properties were put up as recently as 2014 – though that is very unusual.
Naglee Park home – S 14th Street
Besides being older, often historic homes, what can we say about the Naglee Park homes? First, there are 859 single family homes there, plus 39 duplexes, plus other types of housing in the mix. So it is a good sized community.
Livable square footage in the single family homes ranges from a very modest 480 SF to an over sized 5007 SF of living space, with 1904 Sf being average. The average lot size is 6776 – pretty typical for most of San Jose, actually.
A variety of architectural styles can be found in Naglee Park, including Victorian, Craftsman, Mediterranean, and more. A few years ago, I had the pleasure of selling a house in Naglee Park which was a beautiful Italian-Mediterranean style with classic beauty.
What do homes cost in Naglee Park?
Right now, in early 2018, inventory is very low, and therefore our data is also low. In general, though expect to find homes selling for between $1 million and $2 million, but on the high end of that range in most cases. (It could be less if the home was small and in great disrepair, or more if the home were huge and newly renovated or rebuilt.) If you want to purchase a turnkey home in Naglee Park, it would be good to budget a minimum of $1,500,000 for a smaller home, and understand that it could go for close to $2 million.
Neighborhood data gathered February 20th, 2018
Are there any concerns with living in Naglee Park?
Like any downtown area in a big city, this is a place where you do lock your doors at night and can expect to sometimes deal with people wandering through who don’t live there and may be down on their luck. With the university nearby, parking may be an issue for some parts of Naglee Park. Coyote Creek does sometimes flood, but most of Naglee Park is not in a flood plain and was not too badly impacted by the floods in the winter of 2017. Ask most of the residents what they think, though, and they’ll tell you that the beauty and convenience of the neighborhood far outweigh any potential issues.
Read more – other downtown San Jose or central San Jose areas:
The beautiful Beckwith Building in downtown Los Gatos, California
I have been fortunate to have made 5 trips to Europe, one of them lasting 9 months, and will be returning again before the end of 2013 (this time to Belgium). It is so diverse, beautiful and compelling! Having experienced a little culture shock myself (when living in Florence, Italy, for one year of university), I’m very sympathetic about how hard an international move can be, and I understand that for Europeans moving to Silicon Valley, there can be an acute culture shock, particularly for those coming from more rural areas.
The bulk of Silicon Valley is located in Santa Clara County, which is at the southern end of the San Francisco Bay. In this county, there are approximately 1.8 million people, almost a million of them in the city of San Jose. Some areas, or districts, of San Jose have a distinctive character and are almost like towns or small cities themselves. So in this article I’ll mention both cities and towns, but also areas or districts of San Jose, which might appeal to our European transplants. Most of my comments will reference Santa Clara County or “south bay” locations, but I will also mention others on the San Francisco Peninsula and SF Bay Area too.
Architecture, Urban Centers and Charm
It is an unfortunate negative in Silicon Valley that much of our housing consists of ranch style tract homes, and truthfully, they are not exactly a work of art. New or newer homes tend to be on very tiny parcels of land (or “lots”) and for many people may simply feel too congested or crowded. But there are beautiful residential neighborhoods – you just need to know where to look! In many ways, the areas with higher charm can make our global home buyers feel more comfortable than if they were faced with only track, ranch neighborhoods.
Do you value unique, older architecture with Victorian, Craftsman, Tudor or other home styles? Then check out these areas:
- Within San Jose: the Japantown, Vendome, and Naglee Park areas of downtown San Jose. Also in central San Jose are the Rosegarden, Shasta Hanchett and Burbank neighborhoods which all boast some lovely older homes. Or, if you love classic Spanish Revival style homes with views, consider the old Alum Rock area of San Jose near the country club (golf course). The Willow Glen area of SJ (zip code 95120) is full of lovely old established neighborhoods with historic homes and tree lined streets. If your job takes you to downtown San Jose, all of these areas will be fairly close.
Please read the rest of this article on the Move2SiliconValley.com website: