San Jose, CA follows a traditional spring to fall sales cycle with peak closed sales in early to mid summer (May- July). San Jose averages about 500 sales per month with the summer peak around 600 homes in recent years.
San Jose Real Estate Market Trends
How has the San Jose real estate market recently performed?
With the extremely low, unprecedented inventory levels experienced in all areas of San Jose in late 2017 and early 2018 (see yellow line in below chart), most areas and properties for sale experienced multiple offers. The competitive buying environment spurred a quick increase in home prices. PRICES in San Jose peaked in May 2018 and then softened quickly in the later part of 2018 due to the return of more normal inventory levels and an increase in interest rates.
Spring 2019 in San Jose started off as a typical sales season with ramping inventory, sales and increasing prices. In April 2019, inventory continued to increase as usual, but sales slowed down to the lowest number for April since 2008! The lower sales trend continued through the peak summer sales season putting pressure on home prices.
As a result of the market changes in 2019 and a rebalancing of the unusual activity from 2017/18, prices returned back to levels similar to those seen in the Fall of 2017.
2020 started off as an extremely healthy market with low inventory and strong number of home sale closings in February, March and April. But the effect of Shelter-in-place (which started locally on March 17, 2020) showed up in the April pending sales numbers and then May closings. May 2020 pending sales are back to normal seasonal levels, so I expect the market to return to a healthy flow through the summer.
What is the CURRENT average price?
The average PRICE in May 2020 for San Jose was $1,267,700. The median price in May 2020 was $1,205,000 with an average sales price to list price ratio of 101.1% of asking price. Compared to the San Jose market peak of May 2018 ($1,366,990), the market today is down. Today’s prices correlate to prices in early 2018. For current month market statistics and metrics, visit the data below or watch my monthly video update. Want this info sent to you each month? Signup for the San Jose Monthly Market email.
Which direction is the San Jose real estate market trending?
Sales in recent months of San Jose have tempered due to the COVID-19 pandemic. Since many sellers delayed their moving plans, inventory is near records lows. Homebuyers are motivated to make offers due to the historically low interest rates, so the market is now heating up.
Days of Inventory (DOI) is a monthly metric I follow to understand the speed and direction of the market. As of May 2020, the DOI in San Jose is up to 54 days, but this softer market is already reversing due to strong pending sales. Until there is a significant increase in inventory, I expect prices to hold and maybe even slightly appreciate due to the supply and demand imbalance.
What is the market outlook?
The overall trend of the San Jose market is positive moving forward. San Jose is still one of the most affordable areas of Silicon Valley and is home to a revamping downtown. I expect this “after shelter-in-place market” to find a balance in the summer and return to more seasonal San Jose cycles soon. The inventory peak will likely be later than usual and may not peak until September or October this year.
This article is updated once a quarter (next one August 2020). To see more recent updates visit my San Jose Market update videos, signup to be emailed a monthly update or read the San Jose Real Estate blog. The current month’s market metrics are below.