San Jose Real Estate Market Report - 2017 Year in Review
Inventory levels all over the Silicon Valley real estate market hit their lowest levels ever in 2017. Just like the Los Altos real estate market, San Jose inventory levels showed just 0.3 months' available by the end of 2017. Even with lower inventory available, year-over-year sales totals were higher, also like the Los Altos market. This pushed the price-per-square-foot to its highest levels ever. As we start 2018, we expect to see further price appreciation until either new construction increases or people move out of the area.
San Jose Real Estate Market - Total Sales
Overall, 1.4% more homes were sold in San Jose in 2017 (8,174) than in 2016 (8,061). January 2017 started off with 435 total sales, 25% less than those sold in January 2016 (579). Monthly sales rose each month dramatically until they reached their peak of 915 in June. Summer continued its hot streak with 808 sales in July and 824 in August. Then, they began to decrease until ending the year with 491 total sales in December. That was 56.7% higher than the 313 reported in December 2016.
San Jose Real Estate Market - Inventory
The inventory squeeze felt throughout all of the Silicon Valley market certainly plays a huge factor in why sales have declined since last year. The San Jose real estate market began 2017 with 1.4 months of available inventory. February saw a slight jump to 1.5 months (its peak for the year). However, after that, it declined. By May, levels fell below one month of availability and never hit one month or higher again for the rest of the year. By the end of 2017, only a reported 0.3 months of inventory were available, the average for the entire Santa Clara County.
San Jose Real Estate Market Report - Average Sale Price
Besides total sales, San Jose's extremely low inventory played a factor in prices. The average sale price for a San Jose home rose by 27.8% in 2017. San Jose Buyers paid an average of $840,859 in January 2017 (7.6% below list price). In October, the average sale price hit $1,018,687, the first time the average was over $1,000,000 in the San Jose real estate market's history. They continued to climb each month through the end of the year when prices reached their peak of $1,074,605 (12.6% above list price).
San Jose Real Estate Market Report - Price-Per-Square-Foot
The price-per-square-foot for San Jose homes started 2017 at $540 in January 2017. By June, it was over $600. It continued to increase each month of the year. Finally, it hit its peak of $668 in December 2017, a 23.7% increase in 12 months.
Silicon Valley Market Report - San Jose 2017 Year in Review Summary
The most significant concentration of homes sold throughout Santa Clara County during December was in the $800,000 to $1,000,000 range, which made up 17.7% of the total sales for the entire county. The $1,074,605 average San Jose reported in December 2017 fell in the range of 5.6% of Santa Clara County totals. Inventory levels for the county as a whole averaged around 0.3 months (or approximately ten days) available. This was right where San Jose's inventory was reported. Active listings available for sale dropped from 1,990 in December 2016 to 977 in December 2017, a 51% decrease.
As prices go up and inventory goes down, Silicon Valley buyers turn to lower priced areas like Morgan Hill and Gilroy. Until more inventory comes on the market, this will continue to be business as usual in the Silicon Valley. Low unemployment and high consumer confidence have financial experts expecting to see Federal interest rates increase three times in 2018.
If you're interested in purchasing a property, please contact your Silicon Valley REALTOR@ to find out what's available in the area you're interested in. Visit our Home Buying page to learn more about the home buying process.