As summer comes to a close, buyers and sellers want to know what to expect this fall. Will the market heat up, kind of like late summer temperatures often do in the Bay Area? Will home prices continue to rise, stay the same or decrease? Does a market like Silicon Valley even slow down?
Multiple factors can affect our market and even slight changes can be hard to anticipate. But I can tell you what we typically see in the fall and how that compares with what we've experienced this summer.
Usually the summer months bring a market slowdown, as school is out, families are on vacation and many potential buyers take a break from house hunting. But once Labor Day is over and kids are back in school, we typically have what I call a "second spring" market from September through November. We usually see an increase in both inventory and demand, often making the fourth quarter the busiest of the year.
What will that mean for this fall? Let's look at our starting point.
For the majority of 2018, inventory levels for Silicon Valley have hovered around one month's supply. Historically speaking, these numbers are very low. But in July, inventory levels crept up a bit to almost one-and-a half-month's supply. This still doesn't indicate a buyer's market, but it does mean buyers had more homes to choose from in July than they've had the rest of the year.
Accompanying the increase in supply was a drop in the median home price for single-family homes for both Santa Clara and San Mateo counties as a whole, and many of the individual markets they encompass. In July, the median home price in Santa Clara and San Mateo counties fell from second-quarter numbers of $1.4 million and $1.65 million respectively, to $1.35 million and $1.6 million. This represented a 4 percent (Santa Clara) and 3 percent (San Mateo) drop in median home prices. The markets that bucked this trend and saw an increase in median home prices were: Woodside, Los Altos Hills, Cupertino and Menlo Park.
Most homes, except those in Los Altos Hills and Cupertino, took longer to sell in July than they did in the second quarter.
This was good news for buyers who stuck around for the summer market. The good news for sellers was that in July, homes in every market except Woodside and Portola Valley sold above listing price.
Going into fall, we are likely to see a brisk market with increased competition. At least early on, buyers will have more homes to choose from than they've had all year. This increased competition means property preparation, marketing and pricing strategy will become even more important for sellers. Buyers will need to partner with an expert who can position them to be successful with a strong offer out of the gate.