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Low inventory continues to impact home sales in June

Monday, July 7, 2014

A local multiple listing service reports low inventory continued to impact home sales in Silicon Valley in the month of June. Meanwhile, prices continued their upward trend, hitting double digits and placing a damper on affordability.

MLSListings Inc., the multiple listing service that serves the counties of San Mateo, Santa Clara, Santa Cruz, San Benito and Monterey, reports single-family home sales took a modest, but significant decline in June, down 1-6 percent in four of the five counties. Santa Clara County remained stable, mirroring June 2013 levels, but year-over-year sales were down 2 percent in Santa Cruz County, down 4 percent in San Mateo and Monterey counties, and down 6 percent in San Benito County.

Condo/townhouse sales were also down compared to June of last year. Their sales dropped 50 percent in Monterey County; down 46 percent in Santa Cruz County; and down 2 percent and 1 percent in Santa Clara and San Mateo counties, respectively.

June median home prices held strong, and reached double-digit highs for single-family homes across the five-county area. Year-over-year price increases ranged from 12 percent in Santa Clara County to 20 percent in Santa Cruz County. MLSListings reports the June 2014 median price of a single-family home in Santa Clara County was $910,000, compared with $888,888 in May 2014 and $811,206 in June 2013. The June median price for a condo/townhouses was $525,500, up 7 percent from the median of $490,000 in June 2013, and down 4 percent from the May median of $545,000.

According to the MLS, the median price for single-family and condo/townhomes nearly reached the same levels as June 2007, when the market spiked. June 2014 is only off from the previous market high by $3,500.

Low inventory continues to challenge the market at levels below 2013. Month-to-month inventory of single-family homes rose slightly in Santa Clara County by 2 percent, but inventory is still 3 percent lower than last year. It's become a problem for many who want to settle in the area, according to David Tonna, president of the Silicon Valley Association of REALTORS® (SILVAR).

"We are still struggling with low inventory everywhere in Silicon Valley. In Santa Clara County, the average days on market for both single-family homes and condo/townhomes is just 20 days," remarked Tonna.

Tonna said it will take time for market forces to adjust. "Some buyers have backed down because prices have escalated. It is part of the real estate cycle. As housing supply increases, price gains should slow, but it will likely take some time," said Tonna.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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