OCTOBER 2022 SILICON VALLEY REAL ESTATE MARKET UPDATE
Fall is in full swing and it’s the season when we get a burst of new homes on the market for buyers that might have paused their search during the summer. However, this past month’s data illustrated the trend that’s being felt nationwide, prices are coming down and people are not sure whether it’s a good time to buy or sell their homes.
The good news is economists aren’t forecasting a housing market crash or a massive downturn. For more detail about what the experts are forecasting for 2023 home prices, please check out my latest blog here.
Below is an update on the state of Silicon Valley’s condominium and townhome market. If you’re interested in learning more about Silicon Valley’s single-family home market, check out my market update blog here.
Are Sales Prices Dropping?
While it’s true that the median sales price for homes in Santa Clara County has dropped since our peak prices in April 2022, we do have some good news. In this past month, we actually saw a slight rise in median sale prices when compared to last year - from $910K in September 2021 to $920K in September 2022 for single-family homes. The chart below shows how the median sale price has climbed (and fallen) since 2019.
But an aggregate sales price at the county level doesn’t tell the whole story. Every city and every neighborhood within that city has its own unique and hyper-local market. For example, Sunnyvale, Gilroy, and Milpitas showed double-digit increases in year-over-year median sales prices of +28%, +16%, and +10%, respectively. While other areas showed marked, double-digit decreases in year-over-year median sales prices, with Palo Alto down 19%, Santa Clara down 16%, and Los Gatos down 15%.
See the chart below for details about each of the cities in Santa Clara County.
Are Bidding Wars Done?
Not so fast in thinking bidding wars are a thing of the past! At the county level, the sales price compared to the list price is pretty much the same, i.e. sellers sold their property at approximately 100% of the list price. Contrast that with a year ago in September, and the average % of the list price a seller received was 103%.
In the chart below we can see how the sale to list price for condos and townhomes has performed since 2019. Most telling is how competitive the early spring market of 2022 was, with overbidding averaging 112% of the list price!
At a city level, the data from September in the chart below shows that, in general, buyers are more cautious and aren’t in as many bidding wars were to have an offer accepted they had to overbid.
In Silicon Valley, with the median home price currently at $1.65M, condominiums and townhomes are the more affordable option for buyers. And now with lower prices, less competition, and greater seller acceptance of under-list price offers, this is a great time to buy.
The key point is that data provides a great litmus test for our market, but each home is unique and must be analyzed thoroughly prior to making an offer. We are still seeing multiple offers and bidding wars occur on some properties across Santa Clara County, it’s just more the exception than the norm and has everything to do with how the property is priced for its location, the condition of the home, and the floorplan.
Who’s in the Driver’s Seat?
Despite the changing market, with lower home prices, longer days on market, and less overbidding on homes, it’s still a “sellers” market. We’re easing toward a more balanced market, but as long as there’s a low inventory of available homes for sale, we’re in a seller's market and sellers are still in the driver's seat. The good news for buyers is that in our “softening” market, sellers are much more amenable to buyer offers that include contingencies, seller credits, and concessions.
All real estate is local and if you’d like to know more about any of our uniquely wonderful communities across Silicon Valley, please reach out! And if you’re thinking about making a move (or know someone who is), I can help! No pressure or sales tactics, just helpful guidance so you can successfully achieve your real estate goals.