Market Overview
In the first half of 2024, Santa Clara County’s real estate market demonstrated significant activity and notable trends. Here’s a detailed overview of the market performance based on the latest data.
Key Highlights
- Median Sales Prices
- The median house sales price in Q2 2024 rose 13% from Q2 2023, reaching a new high.
- Median condo sales prices also hit a new peak, reflecting a strong demand across property types.
- Sales Volume
- Home sales in Q2 2024 increased by 18.5% year-over-year.
- Sales of homes priced at $5 million and above surged by 63%, driven by affluent buyers influenced by rising stock markets, especially in AI stocks.
- Inventory Levels
- The number of homes for sale on July 1, 2024, increased by 54% compared to the same period in 2023.
- Despite this surge in inventory, Santa Clara County remained the most heated market in the Bay Area.
- Overbidding and Market Speed
- The average home sale sold for 8% over the list price in Q2 2024, the highest overbid percentage since the pandemic boom.
- Average days on market were the lowest since Q2 2022, indicating a quick turnover of listings.
Detailed Analysis
Median Sales Prices
- Houses: The median sales price for houses in Q2 2024 saw a year-over-year increase of 13%, setting a new quarterly high.
- Condos and Townhouses: Both condo and townhouse prices reached new peaks, with condo prices increasing by 3% and townhouse prices rising by 4% compared to Q2 2023.
- High-End Market Surge: Homes priced at $5 million+ experienced a significant rise in sales volume, up by 63% year-over-year. This growth is attributed to increased investment by affluent buyers.
Inventory and New Listings
- Inventory Increase: The number of active and coming-soon listings in July 2024 was up 54% from the previous year. This increase is expected to moderate appreciation rates unless matched by a similar rise in sales activity.
- New Listings: The volume of new listings in Q2 2024 was 32% higher than in Q2 2023, indicating a robust seller market.
Market Dynamics
- Overbidding Trends: The percentage of homes selling over the list price reached 8% in Q2 2024, highlighting intense buyer competition.
- Speed of Sale: Homes in Santa Clara County sold at their fastest rate since the pandemic peak, with average days on market significantly lower than previous quarters.
Economic Indicators
- Mortgage Rates: As of early July, mortgage rates were around 7%, with expectations of potential rate reductions later in the year.
- Stock Market Influence: The sustained rise in stock markets, especially tech and AI sectors, has positively impacted the real estate market by increasing household wealth and buying power.
Challenges and Outlook
- Homeowner Insurance: The homeowner insurance market remains challenging, with policies becoming harder to find and more expensive. This will likely affect pricing for unique homes in areas that are harder to insure.
- Demographic Shifts: The Bay Area is experiencing demographic changes, with an aging population and fewer children, potentially impacting future housing demand.
Where is the real estate market heading?
The first half of 2024 has been marked by robust sales activity, rising prices, and increased inventory in Santa Clara County’s real estate market. While the market remains competitive, especially at higher price points, if listings continue to increase and projected rate cuts materialize a more balanced market between buyers and sellers may be coming in the months ahead.