The days that Silicon Valley homes are on the market has dropped continuously over the past six months

Continual Drop for Days on Market for Silicon Valley Homes

Silicon Valley real estate is selling as quickly as ever with even lower days on the market for single-family residences. During the first six months of 2017, it’s clear that throughout this highly desirable area of the state, inventory is low and demand is incredibly high. As a result, the number of days on the market for residential real estate is becoming fewer and fewer.

When days on the market decrease, it’s a sure sign that properties are selling fast. The reasons behind this are typically due to a high demand and low supply.

Tech fuelled residents

In Silicon Valley, it’s a common trend for buyers in the area to be working in tech. As the already booming tech industry in the area continues to grow, more and more people from around the world continue to flock to Silicon Valley for career opportunities that simply don’t exist elsewhere.

But despite the influx of new residents, few homeowners are selling their property. Below are the numbers of active listings for single-family residences among Silicon Valley neighborhoods and cities this week. All of these numbers are drastically lower than they were a year ago at this time:

Almaden Valley:  25
Cambrian:    32
Campbell:    12
Cupertino:   22
Santa Clara:  27
Saratoga: 45
Willow Glen:  32
San Jose:  426

Why so few sellers?

What’s the reason behind the lack of sellers? It may very well be because they have nowhere to move to. Of those that are selling, the majority are moving out of the area altogether. They have been priced out and unable to move up within the same area. So they’re leaving the Bay Area entirely.

The lessening number of days on the market is telling. Downtown San Jose and Rose Garden have experienced the most notable drop in the past six months. In downtown San Jose, the average number of days on the market for a single-family home was 29 in the last six months. In the past thirty days, that number has dropped to just 14 days on the market. This is less than half of its previous six month average.

Meanwhile, over in Rose Garden, the average number of days on the market over the past six months was 37. In the past thirty days, it’s been shortened to 23. That’s two weeks less than it was before.

What fewer days on the market mean

The fewer number of days on the market is indicative of the substantial jump between what a property is listed for and what the actual sales price ends up being. Over the past six months in downtown San Jose, the average list price for a single-family home came in at $775,642. But the average sales price in the same area hit $790,804 – roughly $15,000 higher.

Rose Garden saw an even greater difference, with an average list price of $1,020,841 compared to an average sales price of $1,049,210 – almost $30,000 higher.

Some areas have seen a similar or equal number of days on the market recently as they have in the past six months – but properties here continue to sell for much higher than the price indicated on the listing.

Take Cupertino as an example. The average number of days on the market for the past six months has been 14, the same number as within the past thirty days. The average list price, though, is substantially lower than the average sales price, at just $2,019,726 compared to the latter’s $2,180,054. What this means is that despite the number of days on the market remaining unchanged, prices are still continuing to go up.

How to get into Silicon Valley real estate as a buyer

So, how does one break into the Silicon Valley property market at a time when inventory is low and prices are high?

In order to qualify for a mortgage in Silicon Valley nowadays, a household will need to have at least one spouse with a strong salary, or two spouses with average to high salaries. Buyers will need to have a gross monthly income of roughly $220,000 to be able to afford a property in the $1,500,000 price range with a down payment of $300,000.

What about sellers?

As a seller, you have an advantage in the current Silicon Valley real estate market. But this alone doesn’t necessarily guarantee that your house will sell for its maximum potential. An experienced real estate agent and customized marketing plan specifically designed for your property are imperative to success. SoldNest can help make sure that your Silicon Valley home sells for the highest possible potential.