Silicon Valley market cooling is underway, as we have been reporting here for a few weeks. Sometimes the shared real estate agent experiences foretell the shift before the data does; now is one of those times. In fact, we don’t actually have data for all of the hallmarks at play in a transitional market.
For a few weeks, there have been rumblings within the Realtor community of a change in the real estate market. The observations and comments include these:
- fewer buyers at open houses (not a tracked data point)
- fewer offers being submitted on the offer due dates (not tracked)
- fewer offer due dates (not tracked)
- increasing number of offers with contingencies being accepted
- longer days on market, or longer than expected
- homes not selling quite as high as anticipated or hoped (not tracked)
Silicon Valley market cooling – what does the data say?
The information on closed home sales is only a partial reflection of what’s happening, but it’s important as it does provide much needed perspective.
One of the most useful charts we can pull from MLS Listings is the combined Days on Market and Sale Price to List Price Ratio graph. It’s a good way to get a quick take on things.
Here’s a look at the last year, including the first part of June 2022 showing the Silicon Valley market cooling with longer days on market and smaller sale to list price ratios than we had a few months ago.
So far, this doesn’t look like much – we do have seasonal changes, which is why we like the year over year view for an anchor. Yes, June is continuing the cooling trend seen in May and in April. Is that alarming? Somewhat, yes, because May is often the peak of the market – not March.