January 16, 2023
If you recall our 2022 forecast a year ago you may remember that we mentioned that we expect the market to normalize. For the better part of the past decade, we have been in a strong seller's market here in the San Francisco Bay Area. With the tech sector driving innovation, products, growth, and as a result, a thirst for jobs, record profits, and salaries we have seen and experienced rapid expansion. In a healthy market homes are expected to appreciate 2-3% year-over-year, but what we saw was an average of 6-8% year-over-year with a sharp increase of nearly 20% in some neighborhoods across 2020 and 2021.
As a seller, one could typically expect to sell at near or above market values with little to no contingencies. Rent backs and concessions were also typical in offers.
As a buyer, one had to write aggressive offers, with almost zero contingencies, and if the property was priced and presented right almost always above asking as there were multiple offers.
Fast forward to today. The market we hoped to see in January has not materialized due to the storms we have experienced since New Year's Eve. We are seeing a small growth in inventory, but many buyers have decided to place touring on hold due to the excessive rain and road closures. We also can not provide an accurate stat for percentage decrease or increase as the winter market is so much slower than the summer market. Just for comparison, In December 2022 we had a total of 1,053 listings for sale in Santa Clara County, and 663 properties sold. Contrasted with May 2022, we had a total of 2,973 listings for sale, a total of 1,442 properties sold. Today, we currently have 1,092 listings for sale in Santa Clara County. Each property is weighted heavier than the summer market and we will see false extremes.
This said sellers should expect to receive fair market value for their property. If there are multiple offers then we are seeing $10,000-$30,000 over, and buyers are still fairly aggressive with offers. Buyers should expect to present clean offers with little contingencies. Offers should be at market price or a couple of points more. Financing is absolutely fine, and a 21-30 day close is considered normal today.
As we have seen in the last 3 downturns Silicon Valley continues to recover quickly and we expect no difference this year. As the tech sector sorts itself out, the best jobs and opportunities continue to be right here. Many who moved away during the pandemic have expressed the need to return and we continue to see a handful of buyers for every listing. In our professional opinion, this is a healthier market for all involved, we can work with both parties at a less rushed pace. Property review all documentation, provide options and consult you through the process.
Whether you or someone you know needs to sell or purchase this year, the earlier we start talking the smoother the transaction will be. Make sure we are your first call for real estate.
Stay up to date on the latest real estate trends.
You’ve got questions and we can’t wait to answer them.