San Jose Housing Market 2022: Prices, Trends, & Forecast
The San Jose housing market became famous for heating up when the pandemic hit in 2020. Since then, prices have continued to rise. Properties are appreciating at record rates. San Jose continues to be a desirable place to live, but is it a good time to buy or sell? This article explains everything you need to know about the San Jose housing market.
San Jose Housing Market Prices
San Jose housing prices continue to increase at a rapid rate. Year over year, there has been an increase of almost 24%. The median price for a home in San Jose was almost $1.8 million in April 2022.
However, per updated data from Redfin, that price has slightly decreased. The median sale price for all home types is currently just above $1 million. Homes spend an average of 13 days on the market, which is up one day yearly.
Single-family homes are still the most expensive in the San Jose housing market. These houses are selling for a median price of $1,070,000.
Townhouses have seen a 10% increase in prices, for a median price of $1,025,000.
Condos and co-ops are the only categories selling below a million. The median price of a condo or co-op is $590,000, which is only a 0.2% increase year over year.
The number of homes selling above the list price has decreased year over year. Only about 63% of houses sold on the San Jose housing market sell above the list price.
While these prices are expensive for many people, they are manageable for a few who want to live in the Silicone Valley area. Tech giants like Facebook and Google call Santa Clara county home, leading to many well-paid employees living in the area.
San Jose Housing Market Trends
The San Jose housing market has not only gotten hot but also overheated. Prices have risen so much that many people in the area are discovering that owning a home is out of reach. Instead of learning how to build a home, they are choosing not to purchase homes.
To afford a single-family home in the area, residents need to make at least $255,000 per year. Most people need to earn approximately $90,000 per year to rent a standard two-bedroom apartment. That balances out that families need to be earning at least $56 an hour to afford an apartment.
However, this hasn’t stopped many people from moving to the technology hub in Santa Clara county. Many of those that work in technology have found San Jose to be a desirable place to live, and they are purchasing houses at record rates.
This has resulted in a low supply of homes on the market. In April, there was a 1.4-month supply of inventory. When the housing supply is below six months, it creates a seller’s market, resulting in higher prices.
The overheated market started to cool off one month later in May as the inventory saw a 10% increase. Just three months prior, inventory was down almost 50%. That indicates that as the months go by, people are buying fewer homes, according to BP Fund.
However, reports released in July show signs that the market might finally be starting to cool off. Per the California Association of Realtors, home sales were down by slightly above 30% year over year in July.
All home types are spending a longer time on the market. Single-family homes spend an average of 13 days on the market, for an increase of 1 day year over year. Year over year, there has been a decrease of almost 12% in the number of homes sold.
Townhouses are cheaper than single-family homes, but buyers are no longer snatching them up as soon as they hit the market. Instead, they are spending a median time of 12 days on the market, which is up 2 days year over year.
Despite their cheap price, condos and co-ops are not selling as much as other home types. Sales in this category are down almost 40% year over year. However, these types of homes are spending fewer days on the market. They are spending a median of 10 days on the market, which is a 6-day decrease year over year.
The San Jose housing market has gone from one of the most competitive housing markets nationwide to a somewhat competitive market. It’s led to people trying to offload their houses now before the market further cools down. Need help selling a house fast so that you can still make a profit? Contact real estate investors like us today to sell your San Jose house before the market cools off.
San Jose Housing Market Forecast
The San Jose housing market is finally cooling off. The higher mortgage rates, high prices, and a low housing supply have resulted in many buyers leaving the housing market. With inflation reaching record highs, many residents are cautious regarding large purchases. Instead of putting a down payment on a house, they are making sure they are renting a house they can afford.
This is going to continue throughout the following year. As demand continues to decrease, the supply will increase. This will result in a slight decrease in housing prices. Supply is already increasing, according to CBS News.
However, don’t expect housing prices to bottom out as they did in the crash of 2008. Instead, the housing prices will slowly decrease to create more of a healthy market. Buyers will find that they can take their time choosing a house in a year. They’ll also discover that they have more purchasing power than they did in the past two years.
Sellers will still be able to sell their houses for a profit, but they won’t be able to keep prices up to record highs.
Many of the hot housing markets for the past two years are starting to cool off. The hottest housing markets of the past two years are the ones that are cooling off the fastest. This has already been seen in the Fort Worth housing market.
Now is not the best time to buy. Instead, sellers can put their houses on the market while still earning a considerable profit. Buyers can rest assured that waiting for price drops to start will get them a better deal. Real estate investors can wait on the market to cool off a bit more before buying up available houses in the Silicone Valley area to ensure they see massive gains.
Real estate investors like us still purchase houses in the San Jose area. When you’re ready to sell or buy a home, we’ll be here to help you every step of the way. Give us a call today to discuss your options before the San Jose housing market has the sharp downturn expected.