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More homes have been coming on the market and selling above asking price in Silicon Valley since January: Both indicators that 2024 could be a strong year for the local housing market, according Dave Walsh, broker manager of the Compass Los Altos and San Jose offices and past president of the California Association of Realtors.
Walsh, who has been tracking market stats in Silicon Valley over two-week periods and comparing them to the previous month as well as to the same time last year, said he’s optimistic about the 2024 housing market based on what he’s been seeing.
Walsh said the market began to heat up around the third week of January and hasn’t slowed down: Open houses are busy in Silicon Valley, and many homes are receiving multiple offers.
The number of homes selling above list price also has been trending upward. According to Walsh, Sunnyvale, Cupertino and Mountain View are cities that are “hot” in Santa Clara County. Homes in these cities have sold as much as 20% over their asking price.
“Properties around the Apple campus in Cupertino are the fastest-moving properties in the country,” he said.
Walsh expects more inventory to come on the market; and when it does, he predicts that Silicon Valley will become an “ultra-competitive marketplace.”
“We’re going to blow past last year’s numbers,” with the historically busy spring season extending into July, Walsh said.
More houses on the market
It appears buyers are adapting to the current mortgage-rate environment, Walsh said. During the week of Feb. 22, Walsh indicated in Santa Clara County there were 1,034 properties available for sale (666 single-family homes and 368 townhomes) in Santa Clara County. That is, an increase of 139 properties from the prior two weeks, and up 18% from the last 30 days.
There were 187 pending homes sales, up 66 from two weeks ago and 65% higher than a month ago. Listings are rising across Silicon Valley. Palo Alto has 50 reported listings, up from 37 two weeks ago.
Properties around the Apple campus in Cupertino are the fastest-moving properties in the country.
Dave Walsh
He also noted that the number of days a home stays on the market has dropped as homes are starting to sell more quickly. This is another primary sign indicating that the market is beginning to be more competitive even before the historically busy spring homebuying season has gotten underway, according to Walsh.
Typically, the median time a home stays on the market increases in January and falls as the market ramps up for the busy spring season. The median days on market in Santa Clara County in January was 11 days, compared with 12 days in December and 22 days a year ago.
High-end homes see multiple offers
More high-end homes are getting buyers’ attention. Walsh noted there were a reported 21 multiple offers on a $5 million property.
“I’ve never seen this pressure on $3 million to $5 million properties,” he said.
Walsh indicated less than 1% of sales that are pending have contingencies. This is reflective of the pressure on the housing market.
The economy is looking good, and there’s a lot of optimism because of stock market highs, Walsh said.
Once rates start to soften, Walsh predicts the market will get tougher for buyers as demand outpaces the housing supply. First-time buyers who were priced out by market competition last year will likely give it another shot. Economists predict as the Federal Reserve starts lowering rates later this year that repeat buyers who have hesitated moving because they’ve felt locked-in with their existing low-mortgage interest rates also will return to the market. Additionally, young adults who are starting to leave their parents’ homes can be viewed as potential buyers down the road.
Silicon Valley Association of Realtors (SILVAR) is a professional trade organization representing 5,000 Realtors and affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term Realtor is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of Realtors and who subscribes to its strict Code of Ethics.
Some people predicted that migration for WFH would reduce demand for homes in this area. Proven wrong, they pivoted to hoping that tech layoffs would do the same. Wrong again! There’s only one thing that will make it affordable to live here on anything less than a tech salary, and that’s building more homes.