I have been analyzing inventory lately to gauge the health of the real estate market in various cities in the Santa Clara Valley. While analyzing inventory is important its also important to see the effects of inventory increase on the amount of time that listings are siting on the market. These graphs compare this the most recent past 12 months inventory levels in Santa Clara, Sunnyvale, Mountain View, Saratoga, Los Altos and Palo Alto over the 12 months prior to enable us to make some comparisons.
As you can see the patterns for Santa Clara are almost identical. The main difference of course is the number of days which has increased about 50%. For Santa Clara sellers out there that means on average it will take you half the amount of time more than what it took to sell a home last year at a price adjusted for today’s market.
One thing to keep in mind is that this chart is about 2 months delayed. What we can gather is that average days on market are lower this time of year than the rest of the year and should be trending downward. As we approach the summer months we should see Average Days on Market begin to trend upward.
In the Sunnyvale housing market we see a similar trend upward. There are a few differences from the previous year graph. One was there was a large dip in the average days on market that occured in the summer of 2007. Also right around this time last year the days one market was starting to taper down, and this year it is increasing. Sure sign of a market slow down and downward facing prices.
The Mountain View real estate market experienced a similar average days on market drop in the summer of 2007. Although the past two years have experienced similar patterns the two graphs diverge around the summer time last year. Typicially you will see average days on market increasing in the summer to fall time of year. This years level is roughly 30% higher than last year.
Saratoga has seen a drastic change in the average days on Market. Typically we would see the days on market decreasing in the spring time, but it is increasing and increasing rapidly. A sure sign that values should be decreasing in Saratoga.
Similar to Saratoga the Los Altos days on market is also increasing at a rapid rate. Typically days on market would be tappering down into spring and increasing in the summer. The market shift has caused it to continue to increase and will result in further price drops for Los Altos.
Out of all of the graphs Palo Also days on Market does seem like the most normal. However, again we see the increase in days on market this year that we didn’t experience in last years market. The graphs seems to be just starting to taper down.
How will the days on market affect prices? As days on market increases expect sellers to drop their listing price to get their property sold. Buyers are also less apt to pay full price and want to negotiate the prices down. Some sellers will react differently and cancel their listing to hold out for a better market and therefore decrease the amount of inventory.
- Inventory: Its Growing in Santa Clara County
- Santa Clara County Home Inventory
- Santa Clara Valley Home Inventory
- Home Inventory Update Santa Clara County
- Weekly Real Estate Market Update