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 500 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. As of August 2020, San Jose closed sales are down 14% year-to-date from 2019.
What is the CURRENT average price?
The average PRICE in August 2020 for San Jose was $1,334,330. The median price in August 2020 was $1,205,000 with an average sales price to list price ratio of 103.0% of asking price. Compared to the San Jose market peak of May 2018 ($1,366,990), the market today is only slightly down. Today’s prices correlate to near peak 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. The market has hit a 3 year record number of pending sales in August (524 pending sales)-last time at this number of pending sales was May & June 2017 (580/561).
Days of Inventory (DOI) is a monthly metric I follow to understand the speed and direction of the market. As of August 2020, the DOI in San Jose is down to 29 days, but this sellers market is likely going to soften with the Autumn decrease in buyer demand. Until there is a significant increase in inventory though, I expect prices to hold.
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. The “after shelter-in-place market” has found a new rhythm which is currently fueled by lack of inventory and great interest rates. The inventory in 2020 has not yet exceeded 400 single family homes for sale at once in 2020. Will the inventory increase and peak in September or October this year?
This article is updated once a quarter (next one January 2021). 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.