“Why didn’t my San Jose home sell?” or “Why didn’t my Silicon Valley home sell?” is being heard from frustrated sellers in Santa Clara County as the days on market rack up. They remember that just a few months ago virtually every home flew off the market.
If you’ve had your San Jose home listed for sale with a real estate professional but after a long while on the market it hasn’t sold, you are probably tired, discouraged, and maybe even angry. What went wrong? Isn’t this still a hot seller’s market?
In brief:
- The peak of the hot seller’s market was in April – May 2022 for closed sales. Those homes were on the market in March or April. Spring is normally a better market than fall, but this year a lot changed to cause prices to fall since that peak.
- Affordability took a triple hit for buyers: home prices rose extremely fast, the Fed raised interest rates quickly and steeply (nearly doubling in 6 months), and the stock market tanked. Buyers’ budgets have shrunk and many of them decided to wait until conditions are more favorable.
- Buyers still looking are pickier than they were in Spring. Homes that aren’t perceived as the best value are getting passed over.
- Most of the time when homes don’t sell, it’s due to them being overpriced for the current market. Prices are down about 15% from earlier this year, perhaps more for homes in less desirable locations such as near high voltage power lines or on busy roads.
- We will consider options that sellers have to turn things around from “why didn’t my San Jose home sell” to “wow, that was a great response from home buyers!
Why didn’t my San Jose home sell? Pricing confusion is the most common culprit.
Neither the sellers nor their Realtors control the market, but it is imperative that we understand the market if your home is to be properly positioned for a sale. Your own area may not be reflective of the city of San Jose as a whole, but this should give you some ideas on how things are faring, and you can check the link below for your area, whether it’s Berryessa, west SJ / Campbell area, Almaden, downtown, etc.
Sellers are having some whiplash over the change in prices.
The facts, taken from the RE Report for San Jose real estate trends in Aug 2022:
- Yes, it is still a seller’s market, however, it has been cooling since the peak in spring.
- Prices are down around 15% for most areas, more for others. If the “comps” you’re looking at were sales from April or May, those prices are too high. Even July is too high!
- Sales have been falling.
- The trend of falling prices does not appear to be leveling out – so many sellers are are doing price reductions are doing too little, too late. We presume that the closed sales in September will be lower, and buyers writing offers now who will be closing in October will be writing lower still.
Those are some of the scary truths. At the same time, homes that sell quickly (within 2 or 3 weeks tops) are selling for more than list price most of the time. When properties go pending within 10 days, they often sell with multiple offers and few or no contingencies. For sellers, that’s usually the sweet spot and why agents often focus on selling in the shortest amount of time with the highest price. It’s not just a tag line, it’s the truth.
Pricing competition
When selling a house, townhouse, or condominium in San Jose or Silicon Valley, the best starting point is to try to see things as the buyer does and to make your property competitive enough that the buyer will see it and be interested. That’s Job # 1: make the buyer and the buyer’s agent want to get in the door for a look in person.
It’s not price so much as value: The buyer is looking not for the cheapest property, but for the best value for the money. The buyer wants the best house, in the best location, with the best terms that he or she can buy.
Here are some competing homes. They are all in the same zip code in San Jose. Some may have better or worse schools, or location within that zip code, but overall they are somewhat similar in the home and lot size. If you were a buyer for this area, y ou might have a budget somewhere around 1.6 to 1.75 million. As a home seller, you would be well advised to look at your home’s competition with a careful view to affordability and what buyers can buy with their available budget.
Sellers, of course, want to sell the home for top dollar with the least hassle (meaning a smooth escrow and no nasty surprises). Sometimes, in the effort to sell for the highest possible price, the sellers simply aim too high – and it’s out of the buyer’s line of vision because it’s likely unrealistic.
In our sample above, there’s a brand new listing that is quite high compared to the competition. It may actually be the best value for the money – we cannot know if it is from this stripped down view. But we can see that it’s the highest list price and the 2nd highest price per square foot compared to its competition.
I wrote about this awhile back and invite you to read more about pricing in this post: What’s My Silicon Valley Home Worth? Estimating the Probable Buyer’s Value.
Taking the advice you pay for is a good plan
A good Realtor can help with realistic and competitive pricing, staging, repairs, etc., but only if the agent has your permission to be totally honest with the client. I literally once had a client say to me “I want you to be enthusiastic for my price”. That is like saying “tell me what I want to hear”. The seller has ideas and the agent is supposed to agree. Hiring a weak agent, or being a seller who doesn’t want to hear a professional’s input is going to be counter productive.
Sellers need to be strong enough to seek an unbiased professional’s input and guidance. Agents need to be strong enough to be the professionals they need to be and to give guidance that will help the sellers to achieve their goals. Better to hire a great agent, work together and encourage honesty (even if it’s not what you want to hear).
“Why didn’t my San Jose home sell?” Perhaps because you didn’t hire an agent with enough bravery to tell you the painful truth, or perhaps because you heard it but wouldn’t accept it. Of course, the first and second reasons – price and advice – are often connected.
Why didn’t my San Jose home sell? Maybe it’s not the price.
Sometimes the advice not taken isn’t about price at all, though. Or the professional advice is off.
OTHER CULPRITS CAUSING A HOME NOT TO SELL
In some cases, buyers never even visit the home (that can be from a rejection outright based on photos or pricing). In others, they go but leave fast. No traffic at all is a serious wake up call that the home is not properly positioned with the correct price and condition. If people visit but leave fast, that’s a little better – something is working, but not well enough.
- Poor photos (professional photography is best) – this is SO IMPORTANT as your photos are your first Open House
- Poor staging (so the photos look bad and the home looks bad if shown)
- Difficult access, making it hard for buyers to see the home (often a risk with occupied homes, worse still if there are tenants)
- Poor descriptions, inaccurate MLS info (I have seen agents miss items like pools, garages, a full bath)
- Cluttered, dirty, dark homes
- Too many personal effects that distract the buyers or make them feel like they are intruding on your home rather than looking a townhouse, house, or condo that’s for sale
- Smelly homes (odors from pets, cooking, candles, incense, dirty diapers, you name it)
- Homes uncomfortably hot or cold due to not using heat or AC – they will leave fast if uncomfortable
- Sellers who don’t leave during showings (no lock box) – it’s creepy
- Lack of marketing (some agents do not allow their listings to syndicate to sites such as Redfin, Trulia, Zillow)
- A low commission rate offered to buyers’ agents (most will prefer to show something else, if possible)
- Things that scare buyers or their agents, such as having to show a home with a dog loose in the house, having to disarm an alarm system, etc.
- A property needing a lot of repairs – that is also scary to buyers
- A home with no inspections – buyers are afraid to get into contract, then pay for inspections, only to learn that the home is in terrible shape
What can be done to improve the odds that the home will sell?
If price is the problem, it’s often easier to increase perceived value than you might think. Agents around the globe will tell you, rightly, that a good price can fix any problem. But most sellers would like to know that lowering the price isn’t the only way to improve the home’s ability to sell.
How else can the home be seen as the better value? Here we need to take homes on a case-by-case basis. Here are a few of the areas I’ve seen that can be tweaked in order to make the property more appealing to home buyers:
- lots and lots of good quality marketing photos that convey your home and yard in the best possible light – when the photograph is taken, the house and yard should be immaculate: no cars in the driveway, no junk on the kitchen counters, toilet lids closed, the home uncluttered – it needs to look like you care!
- decluttering, depersonalizing and staging the home – it needs to be a neutral, clean palette so the buyers can envision themselves moving in
- the front yard needs to be perfect and perfectly inviting – no bushes growing over the sidewalk or front walkway, no chain link fences in the front yard (white picket is ok, chain link is not!), colorful annuals and more
- inside, the house should be light, bright and airy – curtains open, lights on, no stuffiness but instead fresh air and a clean and uncluttered house are all imperative (burning smelly candles can be a turnoff as buyers wonder what a seller is trying to hide)
- sellers need to be GONE during showings – lurking is creepy
- home in good repair – have pre-sale inspections and take care of the repairs!
- improve the wording in the MLS comments
- improve the commission or compensation offered to the buyer’s agent – when sales are down, agents are hungry and they will put a home on the ‘short list’ more quickly if the compensation is better
- sellers can offer to pay points to buy down the buyer’s interest rate – it is a lot cheaper than a price reduction
- make sure that buyers and their agents don’t have to jump through too many hoops to see the home – they will skip it and go elsewhere if you do
Several times I’ve been the 2nd, 3rd or 4th agent and been able to get the house sold without doing a drastic price reduction by instead implementing some of the items listed above or others.
If you are asking yourself “Why didn’t my San Jose home sell”, and your listing is expired or canceled, feel free to reach out to me
We will not interfere with anyone’s listing, so if your home is currently listed with another real estate professional, please hold off on contacting me / us until you no longer have a listing agreement in place with anybody.
If we were meeting with a homeowner whose house was listed on the MLS but did not sell, and is now an expired or cancelled listing, we would have a lot of questions to ask in order to help them assess what needs fixing:
- how many showings were there each week? (it’s one thing if the house is being shown but not getting any offers and of course a bigger problem if it’s not being shown at all)
- how was the listing price established? was it adjusted after a few weeks?
- what were the showing instructions – appointment only, appointment only through the listing agent, 48 hours notice required or any other “strict” showing instructions?
- what was the feedback like from the agents who showed the property to their buyers? what were the buyer objections?
- were there a lot of photos for the MLS and websites? (were they professionally taken?)
- did the seller interview several Realtors? how was the last agent chosen? (sometimes the seller picks the agent who suggests the highest price or who charges the lowest commission)
- what was the commission rate offered to the buyer’s agent? how competitive was it?
If your home becomes an “expired listing”, you can be sure that agents will be phoning and dropping by, many hoping that by being persistent they will display their enthusiasm and tenacity and win an interview with you that way. (They have also all read that typically it takes hearing “no” 7 to 10 times before they’ll hear a “yes”.)
Many agents whose primary business plan is “working expireds” will focus almost exclusively on price. I sat in on a real estate training class where the instructor lectured that the only element of marketing that mattered was price – photos, fliers, Multiple Listing Service comments – all of them were not important, only price mattered. So beware of that angle. Often there are less expensive ways to make a buyer and the buyer’s agent want to show and then write an offer on a home. (Many sellers have the opposite approach and tend to believe that if the home didn’t sell, it was not advertised enough in the paper. Paper ads or magazine ads don’t sell houses, so forget that idea.)
If your home is now off market as a canceled or expired listing, you may grow weary of the calls, mailings and “pop bys” from all the agents who want your business. If you re list your home, with either the prior agent or a new one, the calls will stop. But in the meantime, unless you want to talk with a lot of these folks, you might just let all calls roll to voice mail until the flurry dies down in a few weeks.
If you would like to interview us (we are assertive but not pushy) for your property in Santa Clara County, please call or email me. We will have a look at your property and provide you information on the current market that is tailored to your home and discuss with you the best way forward in our professional opinion.
For more reading:
Selling Your Home in Silicon Valley
Afraid of a buyer consultation?
Selling your home in a declining market
