ResalesSan Jose, California: Housing Inventories Rise, Prices Decline
The San Jose real estate market is slowing down from its feverish pace earlier in the year, with inventories rising and prices turning soft.
"The overall San Jose real estate market has recently undergone changes," says Realtor Thomas McEvoy. "In areas with lower prices, homes sell rather quickly as there are two groups that purchase them -- first time buyers and investment property buyers. However, areas that have more higher-priced homes are experiencing longer time on the market and thus greater softness in pricing. This market seems to parallel the normal supply and demand we had during the 1997-1998 period."
Before the dot-com goldrush.
Explains McEvoy, "The San Jose market at the end of October 2002 shows inventory of 2238, increasing with sales slightly higher at 555, indicating months of sales in inventory of 4.0. Median price was $500,000, down 2 percent in the last three months but up 11 percent from the same month a year ago. Number of days on market (DOM) trended higher to 50 with 1218 new listings. Buyers have more negotiating room than before. With the lowest interest rates in many years, hovering at historic lows, buyers can take advantage of an opportune time to make a purchase and start building equity in a home."
In the Milpitas/North Valley market, prices have slowly leveled off.
Says Realtor Greg Wang, "As we approach the end of fourth quarter of 2002 and into the Holidays, the housing inventory in the Milpitas/North Valley are decreasing. Buyer demand for housing is increasing because of the continued volatility of the stock market and U.S. economy.
Advises Wang, "The prices of most homes are now much more realistic than 4 to 6 month ago. Therefore, if you have considered selling or if your home is currently on the market, pricing your home right is still going to be the most important thing in selling today. If you are a buyer, the obvious reason you would want to buy now are: 1) Interest rates are at its lowest in over 50 years! 2) Prices are down significantly from six month ago. 3) There are more homes to choose from now than ever, and now is the best time to buy them at bargain prices that you will only find two years ago!
In the Cambrian Park area of San Jose, prices are also declining.
"Cambrian Park is suffering from the same economic woes as most of the valley: high unemployment, fear of job loss, uncertainty as to how fast a recovery will happen," says Realtor Mary Pope-Handy. "The general trend has been a slowly rising inventory and slight decline in prices over the last few months. The low interest rates are a help to buyers of these moderately priced homes, which average at around $500,000. Seasonally, we do have a shift in the fall toward more of a buyer"s market, but it is exaggerated this year due to the local and national economic situation."
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