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The inventory of available homes to buy is painfully low throughout San Jose, Santa Clara County, and Silicon Valley. When will inventory begin to rise again? I’m getting this question from many of my home buyer clients right now.

When can we expect inventory to increase?

There are seasonal patterns which become clear with a few images. Here’s a view of San Jose’s real estate listings inventory over the last few years: it gives a good idea of how far out of balance the supply and demand formula is.  The amount of housing supply normally is lowest in December and January, and it usually begins to increase after the SuperBowl or by the middle of February.

In the chart below, you can see a marked point downward at around the 1st of each year.  In recent years, though, that’s not the only time when it dips to the low side.  Also it should be noted that we have seen lower inventory in the last few years – just not during this season.

 

 

If we step back and consider all of Santa Clara County instead, the pattern looks much the same.

The sharp points downward are nearly all very close to January 1st.

 

And finally, inventory for the whole San Francisco Bay Area – again, the same overall pattern, so we can see that this very likely applies to San Mateo County as well:

 

 

It’s easy to identify to the low points as centering around January 1st. Now note the steep uptick following each trough. I think it’s fair to assess that this is a normal pattern.

Most years, the last quarter sees primarily declining inventory overall, as these charts bear out.  In my real estate practice, I have noticed that more listings do come on the market in September and October – but home buyers scoop them up, perhaps wanting to be in their new home either for the holidays or perhaps before the end of the year for tax reasons.   So they tend to sell faster than they go on the market, making the overall inventory shrink even as new listings come on the market.  This makes it a great time to sell…and continuing to make it a challenging time to buy.

To circle back to the original question, then: when will inventory begin to rise for home buyers?  If the pattern continues, it should begin soon but probably not be felt so much until March or April, or perhaps later in 2021 – if then.

Should the demand from home buyers in Silicon Valley continue at the current pace, there may not be much relief – it’s all about supply and demand.  So shop now – and be prepared to move fast if you find the right property!

 

Author

  • Silicon Valley Realtor, selling homes in Los Gatos, Saratoga, San Jose, Silicon Valley, and nearby since 1993. Prolific blogger with a network of sites.