The Local Lowdown
Quick Take:
Single-family median sale prices showed a split picture in May, with San Mateo County posting strong gains while Santa Clara and Santa Cruz Counties experienced year-over-year declines.
Inventory levels have dropped significantly, with single-family home inventory down nearly 19% year-over-year as demand continues to outpace supply.
Single-family homes continue to sell quickly across the region, with the average listing spending just 11 to 14 days on the market.
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.
San Mateo County emerges while the rest of Silicon Valley pulls back
The single-family home market in Silicon Valley showed divergent trends in May as we head into the summer selling season. San Mateo County posted an impressive 6.87% year-over-year increase in median sale price, with the median home selling for $2,210,000. However, Santa Clara County saw a notable 5.58% year-over-year decline, with the median home selling for $2,050,000, while Santa Cruz County dropped 6.38% to $1,254,500. The condo market told a completely different story, with dramatic gains in two of the three counties. San Mateo County condos surged 24.06% year-over-year to $842,400, and Santa Cruz County condos skyrocketed 36.51% to $860,000. However, Santa Clara County condos continued to struggle, declining 8.85% year-over-year to $711,000.
Inventory plunges as buyer demand remains strong
The inventory situation in Silicon Valley has tightened considerably as we move into summer. There are currently 2,071 single-family homes for sale across the region, representing a substantial 18.94% year-over-year decline. New listings are also down 11.79% compared to last year, while sold listings are up 4.47%, indicating that demand continues to absorb available supply at a faster rate than new inventory is entering the market. The condo market is experiencing similar constraints, with 896 condos currently for sale, down 9.77% year-over-year. This persistent inventory shortage is creating an increasingly competitive environment for buyers across both segments of the market.
Single-family homes continue to fly off the shelves
Single-family homes are selling at a rapid clip throughout Silicon Valley as we head into summer. In San Mateo County, the average single-family home is selling in just 12 days, while Santa Clara County homes are spending an average of 11 days on the market. Santa Cruz County homes are also moving quickly at 14 days on average, unchanged from this time last year. While San Mateo and Santa Clara Counties saw slight year-over-year increases in days on market of 9.09% and 10.00% respectively, these figures still represent an incredibly fast-paced market. The condo market is showing improvement in most areas, with San Mateo County condos selling 15.15% faster than last year at 28 days, and Santa Cruz County condos moving 37.84% faster at just 23 days. Santa Clara County condos are the exception, taking 38.89% longer to sell at 25 days on average.
Silicon Valley is deeply entrenched in seller's market territory
When determining whether a market is a buyers' market or a sellers' market, we look at the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has less than three months of MSI is considered a seller's market, whereas markets with more than three months of MSI are considered buyers' markets.
The single-family home market has become an even stronger seller's market compared to last year. San Mateo County has just 1.4 months of supply on the market, representing a dramatic 39.13% year-over-year decline. Santa Clara County has 1.8 months of supply, down 10% from last year, while Santa Cruz County has 3.1 months of supply, a substantial 34.04% year-over-year decrease. The condo market is more balanced, with San Mateo County at 3.5 months of supply (down 22.22% YoY), Santa Clara County at 4.3 months (up 10.26% YoY), and Santa Cruz County at 3.9 months (down 40.91% YoY). With single-family inventory at critically low levels and homes selling in under two weeks, buyers in that segment should be prepared for fierce competition this summer!
