December Newsletter – Silicon Valley Local Lowdown
Quick Take:
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.
After single-family home prices appreciated significantly in the first half of the year, it makes sense that prices are declining in the third and fourth quarters except for San Mateo, whose prices have moved higher over the past two months. Although no market is at an all-time high in October, Silicon Valley home prices remain historically high. We expect price appreciation to decline through the winter, a seasonal norm.
Condo prices are near all-time highs in Silicon Valley. Similar to single-family homes, prices contracted in the back half of the year. Although the price appreciation wasn’t as pronounced for condos as it was for single-family homes, the growth rates for condos in 2021 are still significant.
Despite the increase in single-family home inventory in 2021, we’re still at a historic low. August and September are typically the months each year with the highest inventory. In 2021, total inventory didn’t come close to last year’s level and was even further away from pre-pandemic levels. Even though we’re seeing some price correction after the first half of the year, the sustained low inventory will lift prices. Sales in Silicon Valley have been incredibly high, again highlighting demand in the area.
Homes are selling faster than at any point in the past 15 years. The Days on Market reflects the high demand for homes in Silicon Valley. Buyers must put in competitive offers, which, on average, are 1–5% above the list price of the home.
Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes for sale on the market to sell at the current rate of sales. The average MSI is 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). MSIs in Silicon Valley are near all-time lows for single-family homes and condos, indicating a sellers’ market all around.
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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