April is typically THE peak month for real estate. At least it has tended to be with some years seeing May being more robust. So this is a key month to see where the market is.
With the month of April 2023 now behind us in the San Jose real estate market, what do we have to look forward to? Since April tends to be the peak month, the most likely path forward in 2023 involves declining numbers. Of course, if you read the headlines, pundits use the latest numbers to suggest that we can expect great things from the rest of the year, which is not as likely as they seem to assume.
Inventory Drops Year Over Year
The San Jose real estate market saw a 28% decrease in inventory when compared to the same time last year. Inventory has tended to be very flat over the last few months – having bottomed out around December of 2022.
Interestingly, the San Jose real estate market currently only has 1.1 months worth of inventory on hand. If we were only looking at that statistic, we would assume we are in a strong seller’s market. Market balance is usually considered to be 4.5-5.5 months of inventory in our area. Given that, it becomes clear that it would take a very minor increase in buyer activity to flip this market strongly toward sellers.
New Listings Down.
New listings are down compared to the same time last year – so fewer sellers are willing to put their home on the market. With a 36% drop in new listings year over year – and a drop in the number of homes sold, San Jose added just 187 homes to the market.
The San Jose real estate market saw a drop of 47% of homes sold when comparing to the same time last year. May can often rival April in terms of homes sold, but in our current market, it does not appear that we will be seeing a big jump in homes sold in the coming month.
This month, the number of homes that went into a contract for sale declined by 32% when compared to the same time last year. That gave us 509 sellers that accepted an offer on their home. Pending and sold numbers remained completely flat in April – so as mentioned above, do not look for an increase in the number of homes sold in May.
Interestingly, Sellers initial list price for their homes actually dropped in April compared to the same time in 2022. This is a big shift in expectations as Sellers have often expected double digit increases in price. Overall, the average original list price in the San Jose real estate market was down 3.3% compared to the same time last year.
With the welcome change in Seller expectations relating to asking price, actual sales prices decreased by 10.2% over the year. The good news is that sellers in the San Jose real estate market seem to be getting better calibrated to the correct market values in today’s values. However, given that big drop in average sales price, there is clearly more to be done here. Sellers are pricing much better in this market than they have in past months. Hopefully, this results in faster sales and fewer homes needed to reduce their price in the coming months.
Percent Of List Price.
Sellers have been seeing their homes sell for 104.5% of asking price – down from 114.8% at the same time last year. This is the third month in a row when sellers have been getting over asking price in the San Jose real estate market. This indicates that at least in some parts of San Jose, homes are getting multiple offers and buyers are willing to pay a premium. However, it is likely April was the peak of this trend and we will see this decline over the coming months.
Days On Market.
It is taking 111% longer for home to sell in this month than at the same time last year. That comes to 19 days this year and just 9 days during the same month last year. The total days on market has been declining since the January 2023 peak of 34 days. As with our other statistics, this is likely the lowest days on market number we will see for the rest of 2023
Source: All data is extracted from the MLS system for Santa Clara County – mlslisting.com