The South Bay is bucking a national trend for declining listings, with an increase of more than 7 percent compared with figures from last September — the biggest uptick in the country.
The number of new listings declined in all but 10 metro markets nationwide, according to a recent Redfin report, which also showed that more sellers who put their home for sale are dropping their prices this year compared to the year before as the typical homebuyer monthly payment hits record highs. Nationwide, the number of new listings is down 6 percent year over year, with only 38 percent of homes going off the market in two weeks.
In the San Jose metro, 64 percent of listings are off the market within two weeks, according to Redin, an increase over last year. Price cuts are down to less than 5 percent of active listings, which is slightly less than last year and below the 6.5 percent national average. San Jose was behind only Anaheim for the biggest increase in median prices compared to last year at 10.6 percent.
The South Bay is a global draw with a “somewhat insulated economy,” according to Will Klopp, Compass Managing Director for Silicon Valley. It has been hit by the same macroeconomic conditions impacting the rest of the nation — rising interest rates, skyrocketing gas prices, the return of federal student loan payments and the possibility of a federal government shutdown — but as the home to many VC funds and tech startups, it also has “the potential to create liquidity events through IPO or M&A in any market conditions.”
New listings in Santa Clara County increased by upwards of 10 percent between the end of July and end of September, he added, and the week of Sept. 25 pending sales were up nearly 20 percent, the biggest jump since June.
“As home buyers and sellers get more acclimated to the new normal of interest rates, I expect that even some of the more cautious buyers may re-enter the market,” he said. “The benefits of home ownership are still significant.”
Kat Carroll of the Palo Alto brokerage ReSolve Group said she has noticed more new and first-time buyers in the market compared to this time last year. They are in the “early stages of the ‘prime’ of their career and recognize Silicon Valley is where their careers will be focused for the next decade plus,” she said.
They aren’t necessarily in tech, she said, pointing to the region’s hospitals and universities as other draws. And even though the area had the highest increase in new listings in the nation, it still isn’t enough to meet demand, she said.
“We are just waiting for inventory to sell them,” she said.
The South Bay stands out locally as well as nationally. San Francisco had about the same number of new listings as last September and in the Oakland metro new listings are down more than 7 percent, according to Redfin. Median prices are up in both locales, year over year, but only by about 1 percent in San Francisco and less than 3 percent in Oakland.
Klopp said that a “flight toward quality and stability” may push up interest in the area and separate it from the rest of the Bay Area in terms of desirability.
“Silicon Valley has great weather, great amenities and a host of business opportunities,” he said. “All of these elements could enable us to be the first to accelerate out of a challenging market.”
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