The San Jose Real Estate Market Analysis

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!

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)

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.

Year & Month Breakdown of San Jose Housing Market Data

I pulled these directly from the MLS myself today (9/8/2023) using single family home sales in the city of San Jose, CA.

Many years, December and January are low points, and by February we tend to see this figure rising again with a March or April peek, followed by a slightly calmer, but more stable summer and beginning to decline again around autumn.

The San Jose Real estate market’s sale price to list price ratio is one of the data points that shows us how much the market softened from the peak last year, as well as how much it’s picked back up this year.

Average price per square foot

Prices have come down since the peak of the market in late spring 2022, although it was rising again in 2023 up until August. If we look at it as a “price rollback”, we are at about closest to January 2022 or June 2023.

Average sales price of homes in San Jose, CA

Finally, the average sale price. With fewer offers (not a data point that is well tracked by the MLS as it is an optional entry field for the listing agents), we would expect prices to flatten or lower a bit. The more offers, the higher prices and overbids are likely to rise. With such low inventory, the best homes remain in high demand more often than not putting buyers into bidding wars.

Last year, prices peaked a tad earlier than usual in April 2022 and the average price declined significantly since – roughly $100K a month between April and August of 2022! Things flattened for a bit from there with some fluctuation back and forth through autumn and winter.

This year, it looked like April 2023 was also the spring peek with prices coming down in May, but June prices soared above both! Prices have come down from there, but remain above the first half of the year and above this time last year.

Many years we see prices appreciate in the first quarter – it seems like that has mostly been the case in 2023, and with trends continuing into early summer. With so few listings and sales, tracking any given market has been a challeng this year!

Click to view full size: Average sale price – San Jose Single Family homes

That’s it for the hand pulled data this month, now for some live charts which update automatically every week.

Altos Charts for the San Jose real estate market as a Whole – automatically updated each week – single family homes

First, the market profile and then the basic charts for single family homes or houses in San Jose. FYI, Altos uses LIST prices, not sold prices. Compared to list prices, sales prices are generally higher in this market – sometimes hundreds of thousands of dollars more.

Altos Charts, updated automatically, by price quartile for San Jose single family homes

If you aren’t on data overload yet, next please check out the live charts. These update about once per week, so check often.

List prices of single family homes / houses by price quartile:

Average days on market of listed homes (houses) by pricing tier:

Inventory levels for the last 3 years for houses for sale in San Jose:

Things were looking hopeful in summer 2022 that more inventory was on the way, but it remained far bellow “normal” levels and it’s been flatlining in 2023! There has been almost no growth in inventory the entire year.

Altos Research charts for the condominium and townhouse realty market in San Jose – automatically updated each week

Condominium and townhouse LIST prices by quartile:

Again, like the housing market, these separate quartiles tend to parallel the up and down trends very closely.

Average Days On Market for condos and townhomes in San Jose:

Inventory of available properties among condos and townhomes:

Now let’s go back to the ReReport to see what it says about the San Jose townhome and condo market.

Trends at a Glance: San Jose real estate market for condos & townhomes

If you are viewing the table below on mobile, it is responsive: please swipe to see more of it. See the full condo ReReport here.

San Jose real estate market: condo summary from the RE Report