San Jose real estate market update is on many people's mind lately as number of positive news surfaced in the last 2 months about the real estate market. Most recently, this includes Warren Buffet's call to "buy, baby, buy" real estate.
Here are some local San Jose statistics for the last 2 months that will help you to understand the market a little better.
1. Number of New Listings in January and February
January: 640
February: 620
2. Number of Bank Owned homes, new listings and closed (sold) sales
January: new listings - 89; closed sales - 86
February: new listings - 80; closed sales - 82
3. Number of short sale homes, new listings and closed (sold) sales
January: new listings - 208; closed sales - 203
February: new listings - 155; closed sales - 260
4. Sales price and Listing Price Median: trending upward
5. Sale price to list price ratio and months of inventory
January: SP/LP ratio - 99.2%; months of inventory - 3.8
February: SP/LP ratio - 99.2%; months of inventory - 4.5
Analysis:
1. Contrary to the misguided belief that there are "a lot" of foreclosure homes in the market, bank owned homes comprise only a small percentage of the homes for sale, about 13%. Compare that to short sale homes for sale at 32%, the number of traditional and regular sale is actually about half of the market.
2. Both median list price and sale price are trending slightly upward. This confirms that the market is picking up. This is largely due to increasing buyer demand from the historic low interest rates and the general perception of affordability.
3. Because of limited number of supply of homes & increasing buyer demand, most homes are getting very close to 100% of list price (99.2% to be exact). For buyers, this means selecting a great agent who is a strong negotiator and getting you the home; for sellers, this means selecting an agent who is strong at marketing to get you the most dollar possible.
4. Months of inventory is indicating a seller's market and this might be the biggest surprise of all. Generally speaking, more than 7 months of inventory indicates a buyer's market. 5-7 months of inventory is a balanced market; less than 5 months of inventory is a seller's market. This may be partly seasonal, meaning during the slowest time of the year, there is limited number of homes for sale. For buyers, this means to expect multiple-offers competition on a home priced correctly at market value. For sellers, this means to know how to select the right buyer who will close the transaction.
Conclusion:
How is the market? It really depends on why you are in the market - everyone's situation is different. One thing for sure is that you need a good agent to guide you through this market. Distressed home sales is still a factor to consider. Additionally, the lending requirement is a moving target that requires significant effort & knowledge to close. Finally, no matter how the market is moving, you need to evaluate your situation objectively to see what is possible for you. Feel free to contact me for a obligation-free consultation!
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