Quick Take
- The single-family home market has remained incredibly resilient, while cracks have begun to form in the condo market.
- Silicon Valley inventory levels seem to have reached a local peak in May and have begun to decrease in June.
- Condos are spending approximately 2-3x longer on the market when compared to this time last year.
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.
The third straight month of median sale price declines in the condo market
Although we saw some healthy growth throughout most of the single-family home market in June, with median sales prices up 3.21% and 7.18% on a year-over-year basis in San Mateo and Santa Clara counties, respectively, and down by 4.64% in Santa Cruz County, a much different story is playing out in the condo market. The condo market just saw its third straight month of median sale price declines, which were fairly drastic too. Santa Clara County median sale prices saw a year-over-year decline of 8.79%, San Mateo County decreased by 11.84%, and Santa Cruz County saw a huge 13.52% drop.
Inventories seem to have peaked for the year in Silicon Valley
It seems like inventories in both the single-family home and condo markets reached their local peak in the month of May, as inventories dropped in June. Despite this local peak, inventories are still much higher than they were around this time last year, with the single-family home market reporting 14.18% more active listings and the condo market reporting 24.89% more active listings. This is largely due to the fact that the number of new homes being added to the market is currently shrinking at a faster rate than the number of homes being sold.
The average condo is spending 245% more time on the market in Santa Cruz County
The single-family home market remains an incredibly competitive market, with average listings in San Mateo, Santa Clara, and Santa Cruz counties being snapped up in 13, 11, and 17 days, respectively. However, condos are spending considerably more time on the market, with the average listing in San Mateo County spending 39 days on the market (a 116.67% increase year-over-year). Additionally, the average listings in Santa Clara and Santa Cruz Counties are spending 22 and 38 days on the market, representing 83.33% and 245.45% year-over-year increases!
The Silicon Valley single-family home market remains incredibly competitive
When determining whether a market is a buyers’ market or a sellers’ market, we look to 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 lower than three months of MSI is considered a seller’s market, whereas markets with more than three months of MSI are considered buyers’ markets.
As you might expect, the single-family home market is pretty competitive, with San Mateo and Santa Clara Counties being sellers’ markets, with just 1.9 months and 1.7 months worth of inventory on the market, respectively. Whereas, Santa Cruz County is a buyer's market, with 4.4 months' worth of inventory on the market. On the other hand, the condo market is entirely a buyers' market, with 3.6 months, 3.4 months, and 5.5 months worth of inventory on the market in San Mateo, Santa Clara, and Santa Cruz Counties, respectively.
