Housing Market Update, May 2024
Prices, Inventory, Interest Rates in Santa Clara County
We are in the typical peak selling season for real estate, when the most number of properties are coming on the market, and the highest number of buyers are looking.
First, let’s look at how the market is going this year. At the beginning of the year I had some expectations of how the year could go:
I expected it would be a really competitive house market. It definitely has been!
Every offer I’ve written this year, there have been multiple offers. In one case, there were 48 offers on a single property.
I expected limited inventory and higher prices.
I got this partially right on two fronts. Inventory is historically low, but higher than it’s been in a few years. Prices have gone up, but more quickly than I anticipated.
From January through April this year in Santa Clara County, the price of a single family home (SFH) increased by 17.6%. It was an 11.6% increase for townhouses and 9% for condos.
The median sales price of a SFH in April was $2 Million. Townhouse, $1.35M and condo, $828,000.
While condo prices are still reaching for their pre-COVID peak, single family homes have hit a new high.
Unfortunately for some of my Buyer clients, we’ve had to change certain locations where we’re looking for property, because we’ve been priced out of those areas. Where prices end up by the end of the year, time will tell. But it certainly should be more than the 5% predicted nationally.
Now Let’s talk about the biggest factor in this housing market; Interest Rates.
We’ve focused on this as a leading indicator of where the market would head, and a reason why many people have bought, or waited or sold to re-buy.
The last couple years were somewhat cooler with how quickly the rates went up. Some buyers held off on buying, and sellers with low mortgage rates chose not to sell.
Now we’re kind of settling in. There was an expectation of rates dropping in the later part of this year. That was something I anticipated, and what the Fed indicated.
That clearly is not happening now with still strong job data and higher than ideal inflation.
Still, 6.5-7% for a 30 year fixed is not bad, historically. Rates are somewhat lower than they’ve been this year in the last few weeks, but many buyers have already begun to accept these higher rates as the new norm, which they likely will be for a while longer.
So what to be aware of? If you’re writing offers, they need to be strong in price and terms to compete. Those are the offers that are winning.
Sellers? Price it right. Prepare the home properly. Incentivize buyers and agents to focus on your property as inventory increases through the summer.
I'm very interested to see how this summer selling market goes!