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.
Locals to the San Jose area (Silicon Valley, Santa Clara County) know, and newcomers often do not, that we have micro-climates here. Our weather is mild everywhere, of course – we enjoy a “sub tropical climate” where citrus grows and palm trees thrive – but it varies a lot nonetheless.
What kind of variation exists in Santa Clara County’s weather?
Consider that our terrain is shaped somewhat like a funnel with the San Francisco Bay on the wide end, and the two mountain ranges making up the sides of the funnel, narrowing at its base (near Morgan Hill).
Together with our funnel shaped valley, the Pacific Ocean and the San Francisco Bay are the major influences on our climate. The Santa Cruz Mountains are warmer and wetter than the eastern foothills. The Pacific Ocean brings in the rain, fog and winds pulling storms in from the ocean to the valley. Much of the weather stops at or near the coastal mountains, though, and the influence lessens as you go east such that the east foothills are very, very different from the Santa Cruz Mountains. The areas close to the bay get more breezes than those sheltered by smaller valleys or nooks.
Mini update for Santa Clara County as a whole as of September 17, 2012 for houses in SCC:
Actives = 1295
Regular sales for sale = 1157 (89%
Short sales for sale = 95 (7%)
Bank owned houses for sale = 43 (3%)
Sold in the last 30 days = 859
Regular sales closed in last 30 days = 675 (79%)
Short sales closed in last 30 days = 151 (18%)
Bank owned houses sold in last 30 days = 33 (4%)
It seems that although short sales are in increasingly smaller part of the inventory of available homes, they are highly desirable and are showing up in the solds at twice their ratio of actives. Put another way, the absorption rate looks to be higher. Let’s check the math on the moths of inventory:
All houses in SCC: 1295/859 = 1.51 months of inventory
Regular sales in the county: 1157/675 = 1.71
Short sales in SCC: 95/151 = .63 moi (63% of one month!)
Bank owned homes: 43/33 = 1.3
All of these numbers are low, low, low – but the short sales are the lowest of all!
-mph
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POST FROM APRIL 22, 2011:
Yesterday we looked at the types of home sales around Silicon Valley by price point. Not terribly surprising, most of the short sales and bank owned homes were in the lowest price ranges. Today we’ll look at this type of information not by pricing tier but instead by geography – in other words, by either town, city or district of San Jose (area). This post will not cover every area but will be a sampling a few communities, mostly on the west side of the valley (since that’s primarily where I work).
By way of reminder, the small image to the left reflects Santa Clara County’s houses for sale as a whole – all areas and all price points. (You can see the full sized image by clicking on it.) The green area represents “regular home sales” and the brick red and light orange signify distressed properties listed on the MLS for sale (red is short sales and orange is bank owned or REOs). Next let’s see a few regions within the county to see how things are faring geographically.
1. Almaden Valley area of San Jose – homes listed for sale by type – very few distressed properties on the market!
Almaden is a lovely southwest San Jose suburban community (zip code 95120) that grew up initially with the cinnabar or mercury mining activity. Today it’s an upscale area of more expensive homes than most of the county, it enjoys really good schools and scenic views of the coastal range as well as the Santa Teresa Foothills. Housing here is costly but residents love the quality of life. Since the cost of homes for sale here is high, it’s not super surprising, after seeing yesterday’s post, that there are very few distressed homes on the market here. Next we’ll check the other extreme…. (more…)
The Silicon Valley real esate market is heating up but it’s not heating “evenly”. Some price points and areas (or school districts) enjoy a hot seller’s market while other segments are lagging. A big factor in the overall health of the realty market in the San Jose area is the percentage of listings which are distressed properties, meaning short sales and bank owned homes. Today we’ll see the ratios of these homes to the regular sales using graphs to get a quick visual take on the market trends and statistics.
Today we’ll look at homes listed on the MLS in all of Santa Clara County (including San Jose, Campbell, Los Gatos, Saratoga etc.) by price point. All of the graphs in this post will reference houses and duet homes combinesd(about 99% houses), not condos or townhomes.
Overall, it looks like about 1/3 of all homes for sale in the county are distressed sales. Next let’s look at this data by price point and then we’ll check it by area. The images below will be smaller but the colors will represent the same elements in each one (green being regular sales, brick being short sales and light orange being REOs).
TheWilliamson Act, also known as the California Land Conservation Act, was passed by our California Legislature in 1965 in order to encourage rural & agricultural lands to remain undeveloped longer. When land owners enter into a contract under the act, they benefit from lower property taxes, which are based on the property’s current use, rather than paying market value based tax rates. In exchange, the property is to remain undeveloped and continue to function the same way for the duration of that contract. The contracts run for 10 years and are automatically renewed unless the farmer or rancher cancels it.
Why does the Williamson Act matter?
According to the Committee for Green Foothills, there are 362,000 acres of land in Santa Clara County under the Williamson Act (that article appears to have been written in 2003, so the numbers may have changed a little since then). Much of it is in the east foothills of east San Jose and the south county areas near Morgan Hill and Gilroy, but there are patches of it in Los Gatos, Saratoga, Cupertino, Almaden Valley, Blossom Valley and throughout Silicon Valley. The tax breaks make it possible for many farmers and ranchers to stay in business and not feel forced to sell their land for development. If they were paying “market rate” taxes, it would not be long before most or all of our rural and agricultural uses gave way to housing and other development.
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!
Locals to the San Jose area (Silicon Valley, Santa Clara County) know, and newcomers often do not, that we have micro-climates here. Our weather is mild everywhere, of course – we enjoy a “sub tropical climate” where citrus grows and palm trees thrive – but it varies a lot nonetheless.
