Whether you're eyeing that dream home or contemplating a strategic sale, understanding the state of the housing market where you live can provide valuable insights for both buyers and sellers. One of the most common data points we’re all familiar with is the median sold price for a home. But three other metrics contribute toward the full picture of what’s happening in the market.
Below is a summary of these market metrics for single family homes and for condos/townhomes as of January. It’s a snapshot in time, but when we contrast them with the previous month, we can begin to forecast some trends about the market.
Aside from median price, another key factor in gauging the overall health of the market is to look at the Median Days Homes are On the Market, which currently stands at a mere 11 days for single family homes and 27 days for condos/townhomes. This metric measures the average number of days it takes for a home to be sold (go “under contract”) after it is listed. A shorter average indicates a fast-paced market, where properties are in high demand and being snatched up quickly.
Another key metric is the List to Sold Price Percentage. These sit at an impressive 103.1% for single family homes and 100.9% for condos/townhomes. This indicates that, on average, homes are selling for 3% and 1%, respectively, more than their list price. This suggests a strong seller's market, where buyers may need to be prepared to offer over list price in competitive bids to stand a chance in securing a property. Sellers, on the other hand, can take advantage of this trend and potentially fetch higher prices for their properties.
The supply of home inventory tells us who’s in the driver’s seat
Below are two charts showing the home inventory levels and changes during the month of January for both single family homes and condo / townhomes.
Looking at the “Months Supply of Inventory” we notice that for both types of homes there's
less than a month of inventory. Specifically, 0.64 of a month for single family homes and 0.93 of a month for condos and townhomes. What does that mean for a buyer or a seller? It basically tells us how many months it would take to sell all the available homes currently on the market, assuming no new listings are added. A lower the number the tighter the market, indicating limited inventory or a “seller’s market", where demand by buyers is high and supply is limited, and the sellers are still in the driver’s seat in having the upper hand in a sale..
These numbers suggest a highly competitive market where buyers may face challenges in finding their dream homes.
Now, let's shift our attention to the “12-Month Change in Months of Inventory”, which shows a significant decrease of -31.91% for single family homes, and a slight positive change of 2.2% for condos and townhomes. This means that compared to the same period last year, the supply of single family homes has decreased by almost one-third, and at the same time we saw a slight increase from a year ago of inventory for condos and townhomes. As is typical during the winter months, a dip in inventory is expected, with a trend of increasing inventory in the coming months. The relatively small overall change for condos & townhomes inventory provides a more hopeful sign that inventory is starting to return. However, with less than a month of inventory, these numbers still are well below what we’d expect in a balanced market and can create a sense of urgency for buyers seeking to find their ideal property.
The median sold price of homes continues to be strong, although still lagging May 2022 prices
The two charts below show January’s median sales price for single family homes and condo-townhomes.
The Median Sold Price represents the middle point of all the sold home prices in a given area. It provides a snapshot of the overall price range in the market. For single family homes, it currently stands at a staggering $1,690,800 and $920,000 for condos/town homes. This information can be useful for both buyers and sellers to gauge the general price range they can expect, but overall, we continue to show a little lag in pricing from the peak prices in May 2022. That being said, the trends continue to point to a thriving and in-demand marketplace for homes in the Santa Clara Valley.
Bottom line? Santa Clara County homes are selling quickly, over list price, and in less than a month!
In summary, these real estate metrics paint a vivid picture for both buyers and sellers. The low Months Supply of Inventory indicates a highly competitive market. The short Median Days Homes are On the Market highlights the need for buyers to act quickly. The List to Sold Price Percentage indicates that sellers have the upper hand and can potentially fetch higher prices. Lastly, the Median Sold Price showcases the strength of the market and the demand for high-value properties.
Bottom line, buyers need to be prepared to act swiftly and decisively if they want to secure their desired property. And whether you’re a buyer or a seller, be prepared for an exciting and fast-paced real estate market. Stay informed, stay engaged, and make the most of these promising opportunities!
Thank you for joining me on this real estate metrics journey! I wish you success in your housing endeavors. Please reach out if you’d like to understand more about the market where you live!
