Positive Signs

Following a slow second half of 2022, buyer demand appears to be rebounding so far in 2023, with open houses, offers, overbidding, and absorption rates all on the rise. Median prices have yet to recover from recent declines, but those drops are based on numbers from the peak of a 10-year market cycle. And it’s only a matter of time before increased demand and a continued inventory shortage drive up prices again.

The proverbial pink elephant in the room is unpredictable interest rates, which have put a chill on the housing market. Spring is typically the most active period of the year for sales, so we should learn more in the next few months about where we’re headed.

Market Snapshot: Santa Clara County

January sales numbers are in, and it looked a lot like December – slow. But it’s typical for sales to cool off during the cold winter months. You can expect things to pick up in March, even with inventory and prices in a continued state of flux. Some things in the housing market never change!

Bay Area tech layoffs hit 20K

More than 20,000 workers in the tech sector have lost their jobs in the past 6-8 months, and you more than likely know someone who’s been affected. According to a Mercury News report, open listings are down as much as 53% from pre-pandemic times for software positions and 37% for IT roles. But while some tech giants are downsizing, they’re still bigger than they were before COVID.

Counting by County

Let’s take a look at how median sales prices for houses stacked up county-by-county from Napa to Monterey in Q4 2022. As you can see, costs get a bit more affordable the further you get from Silicon Valley and the Peninsula.

San Francisco’s “Tech-xit”

According to Compass market analysis, for the first time in a decade, median home prices in San Francisco fell by 1% from a booming 2021 to a cooling 2022 and came to rest at $1.78 million. Oddly enough, single-family homes are doing twice as well as condos, with more than 60% of sales closing over asking price. Recent tech layoffs certainly won’t help the condo market in months ahead. But it’s yet to be seen how big of an impact the “Tech-xit” will have.