A Slowing September Market?
And while this number is impressive, it is a 20% drop in volume of sales from August. This decrease is consistent with the reduction in the number of sales in September – an indicator of a general market slow down.
The prices, however, are holding firm. Median Silicon Valley home sale price increased by 1.1% from the last month and is currently only 2.3% below last year prices. There is a significant disconnect between the seller’s and buyer’s expectation. While the sale prices were trending down, the median listing price increased by 7% from August and is currently 3.5% above the last year levels. Because of that the time on the market continues to grow and the average time to sell a home increased to 32 days in September.
Overall this year, the median home sale price is down by 4% comparing with 2018. It is easy to see why – 2018 prices jumped up by almost 18%, the second highest increase during this recovery cycle. This price adjustment returns the market to the average growth trends we experienced since 2011. The demand for housing remains strong. We see it at our open houses and by the number of inquiries our listings receive.
The economy also remains strong despite of barrage of negative news. Silicon Valley unemployment rate is hovering around 2% and some of the best paying jobs in the country are offered by local companies. According to the Silicon Valley Business Journal, in 10 of Bay Area companies the median salary reached levels above $200K, and in 46 more companies the median salary is more than $100K. Spluk is at the top of the list with the median salary just over $261K. They are headquartered in San Francisco with a major office in San Jose.
We expect the growth trend to continue through the fall months and well into the holiday season. The chronic shortage of housing the area combined with the exceptional economic growth will continue to support the sellers’ market and fuel the real estate equity appreciation.
Elena & Michael Talis