Almaden Valley of San Jose, CA follows a traditional spring to fall sales cycle with peak sales in early summer, primarily due to its focus on schools. This cycle is driven by the first day of school for the new year starting mid-August
Almaden Valley Real Estate Trends
What is the Direction of the Almaden Valley Real Estate Trends?
With the extremely low inventory experienced in all areas of San Jose in late 2017 and early 2018 (see yellow line in below chart), Almaden Valley experienced multiple offers which spurred a quick increase in home prices. PRICES in Almaden Valley peaked in January 2018 and then an even higher average price peak in June 2018 with $1,911,940 topping the average sales 2019 price in June 2018.
OVERBIDDING was commonplace in 2017 and 2018 with the peak sales price to list price ratio of 111.7% in February 2018. May 2018 marked the peak numbers of home SALES in Almaden Valley since January 2015 with 44 sales closed.
In late summer of 2018, these record high prices plus increasing interest rates had buyers waiting on the sidelines and the number of sales decreasing earlier than typical in the year’s sales cycle. This late summer/early fall season in 2018 felt like an early winter and prices softened the rest of 2018 as a result of the decreased sale activity.
Spring 2019 in Almaden Valley started off as a typical sales season with ramping inventory and increasing sales. In April 2019, inventory continued to increase as usual, but sales slowed down to the lowest number for April in the past 5 years. The lower sales trend continued through May, June and July, creating a larger stock of homes available for sale. The 2019 inventory curve through July looks very similar to 2016, but sales in 2016 were much stronger (see green bars on chart below).
As a result of the lower sales and higher inventory, prices have been sporadic in Almaden Valley through 2019 with fall prices lower than the beginning of 2019.
What is the CURRENT average price?
The average PRICE in October 2019 for Almaden Valley was $1,472,320. The median price in October 2019 was $1,459,440 with an average sales price to list price ratio of 97.4% of asking price. Compared to the Almaden Valley market peak of June 2018 ($1,911,940), the market today is down. Today’s prices correlate to prices from Fall 2017. For current month market statistics and metrics, visit the raw data below.
Which direction is the market trending?
Sales in recent months of Almaden Valley have been following a more typical seasonal cycle. The summer of 2019 had lower sales than normal but fall returned to typical seasonal sales.
Days of Inventory (DOI) is a monthly metric I follow to understand the speed and direction of the market. Days of inventory is a simple calculation using the inventory and current rate of sales to understand how long it would take to sell all available homes. Around 90 days of inventory is a transitioning market where negotiation power moves from sellers (under 90 DOI) to buyers (over 90 DOI). Certainly, this is not an exact line bit rather a gray zone or general guideline. As of October 2019, the DOI in Almaden Valley is down to 43 days. If inventory continues to decrease seasonally while sales stay flat or increase, the DOI metric will decrease creating supply and demand pressure once again.
As of October 2019, average prices are DOWN 22% from the pointy peak of June 2018. Using a homeowner perspective when analyzing the average price in Almaden, I compared October 2015 to October 2019 (4 years) and the average price in Almaden Valley is up 8%! This data and perspective lead me to believe that 2017/2018 prices in Almaden were inflated due to lack of supply and high demand.
Since the Almaden Valley market is back to a typical seasonal cycle, the market intensity has settled. Consequently, I expect prices to soften as they typically do seasonally and then rebound in Spring 2020. Certainly, a housing market that has experienced extremely healthy appreciation over the last 10 years could use a few years of stability!
What is the market outlook?
The overall trend of the Almaden Valley market is positive moving forward. Almaden Valley is still a sought-after neighborhood for families looking for good public schools and an outdoor lifestyle. I expect the current healthy balanced market to conservatively appreciate in 2020 with continued historically low interest rates , low county-wide unemployment and numerous corporate development projects in downtown San Jose (less than 10 miles away).
Sellers who have lived in Almaden Valley more than 4 years are experiencing nice equity gains even after the softening experienced in later part of 2018 and into 2019. Buyers are happy to see a more balanced market and continue to invest in the area. Pending sales in October are at a record high for this time of the year so I expect November 2019 closed sales to be an unusually high number.
This article is updated once a quarter (next one Feb 2020). To see more recent updates visit my Almaden Market update YouTube playlist or the San Jose Real Estate blog. The current market metrics are below.
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- Study the raw data yourself below. With Theresa’s engineering background and experience in San Jose since 2004, she gladly discusses market statistics with her clients. See below Almaden Valley real estate specific statistics and contact Theresa for a personal discussion on these stats.
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