Since the start of 2023, single-family home inventory has followed fairly typical seasonal trends, but at significantly depressed levels. Low inventory and fewer new listings have slowed the market considerably. Typically, inventory peaks in July or August and declines through December or January, but the lack of new listings prevented meaningful inventory growth. Last year, new listings and sales peaked in May, while inventory peaked in September. New listings have been exceptionally low, so the little inventory growth in 2023 was driven by softening demand. In December 2023, inventory and sales dropped, but more new listings have come to the market in 2024, which has driven the significant increase in sales so far this year. The market is already looking healthier, and we expect more new listings and sales in the summer months.
With the current inventory levels, the number of new listings coming to market is a significant predictor of sales. New listings rose 5% month over month, and sales followed suit, increasing 9%. Year over year, inventory is up 19%, and sales are up 10%. Demand is clearly high in Silicon Valley, and more homes for sale have equated to more homes sold.
Months of Supply Inventory indicated a strong sellers’ market in May
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). The Silicon Valley market tends to favor sellers, which is reflected in its low MSI. MSI trended higher in the second half of 2023, but never climbed above three months of supply. From January to April 2024, single-family home and condo MSI fell significantly, indicating the housing market strongly favors sellers.
Local Lowdown Data
As your local real estate experts, we feel it’s our duty to give you 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. Please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.
