Single-family home and condo sales and new listings declined month-over-month, a trend that will likely continue through the rest of the year. Silicon Valley, along with the rest of the country, has not returned to pre-pandemic inventory levels after the buying boom last year. Now that we’re through most of 2022, we can see just how significant sales were in 2021 by comparison, especially in the summer months. From May through September of last year, 10,869 single-family homes and condos sold. During the same period this year, 7,566 homes sold, a 30% decline. Far fewer new homes have come to market in 2022, and the rising rate environment has dropped demand as well. We can tie new listings not only to supply, but also to demand, because sellers are often buying, too. Softening demand has brought the market closer to balance despite declining inventory.
Months of Supply Inventory still indicates a sellers’ market
Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). MSI has trended higher (from a sellers’ market toward balance) since spring, but despite the changing market environment, Silicon Valley is still in a sellers’ market for single-family homes and condos.
Local Lowdown Data
Our team is committed to continuing to serve all your real estate needs while incorporating safety protocol to protect all of our loved ones.
In addition, as your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we put together this monthly analysis breaking down specifics about the market.
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