From Compass Chief Economist Selma Hepp – April 12, 2019
Silicon Valley continued to see relatively muted housing market activity in the first quarter, especially when compared to last year’s uncharacteristically dynamic conditions. Nevertheless, while total number of homes sold declined, winter’s build-up in affordably priced inventories in Santa Clara County helped push sales of those homes above last year’s levels. Largest decline in home sales activity was among homes priced above $3 million.
At the same time, while Silicon Valley continued with inventory decreases, the remainder of Santa Clara County experienced relatively larger increases in the number of homes for sale compared to other Bay Area regions, and the increases were widespread across price ranges.
Buyers remained restrained and less likely to engage in bidding wars than in previous years. However, improved home buying conditions and lower mortgage rates brought back some enthusiasm leading to a bounce back in the share of homes selling over asking price. About 50 percent of homes sold over asking price at the end of the quarter.
Declines in sales of higher priced homes, coupled with buyer restraint, led to a decline in median home prices on a year-over-year basis. However, median prices are still in line with levels prior to last year’s extraordinary jump in prices, averaging almost 30 percent at times.
Looking Forward: With improvement in buying conditions such as lower mortgage rates, more inventory, lower median prices, buyers are facing great opportunities this spring. Renewed interest is also evident in improved home buyer sentiment in March.
Defining Silicon Valley: Our real estate markets in Silicon Valley include the cities and towns of Atherton, Los Altos (excluding county area), Los Altos Hills, Menlo Park (excluding east of U.S. 101), Palo Alto, Portola Valley, and Woodside. Sales data in the charts includes all single-family homes in these communities.