Dave Walsh is one of numerous real estate experts who are very optimistic about the 2024 housing market. He says open houses are busy in Silicon Valley and many homes are receiving multiple offers. Walsh, who is the broker manager of the Compass Los Altos and San Jose offices and served as 2021 president of the California Association of Realtors, told Silicon Valley Association of Realtors members last week that he expects more inventory to come into the market. In fact, he speculates Silicon Valley will soon become an "ultra-competitive marketplace."
"We're going to blow past last year's numbers. We're going to see an extended spring to July," said Walsh.
Having tracked market stats over two-week periods and comparing them to the previous month and last year in the Silicon Valley region, Walsh has observed that the market began to kick off around the third week of January.
"The market is moving so fast that my stats are already outdated," said Walsh.
It appears buyers have begun adapting to the current mortgage rate environment. In the week of February 22-25, 2024, Walsh indicated in Santa Clara County there were 1,034 properties available for sale (666 single-family homes and 368 PUDs), an increase of 139 properties from the prior two weeks, and up 18% from the last 30 days.
Pending home sales were at 187, up 66 from two weeks ago and 65% higher than a month ago. Walsh reported there were currently 45.7% Class 1 properties and 41.1% Class 2 properties that are under contract.
Listings are rising across Silicon Valley. Palo Alto has 50 reported listings, up from 37 two weeks ago.
Another primary sign indicating that the market is beginning to be more competitive even before the spring homebuying season has gotten underway is days on market continue to drop as homes are starting to sell more quickly. Typically, the median time on market increases in January and falls as the market ramps up for the busy season. The median days on market in Santa Clara County in January was 11 days, compared with 12 days in December and 22 days a year ago.
The number of homes selling above list price also has been trending upward. According to Walsh, Sunnyvale, Cupertino and Mountain View are cities that are "hot" in Santa Clara County. Homes in these cities have sold as much as 20% over their asking price.
"Properties around the Apple campus in Cupertino are the fastest moving properties in the country," he said.
More high-end homes are getting buyers' attention. Walsh noted there were a reported 21 multiple offers on a $5 million property. "I've never seen this pressure on $3 million to $5 million dollar properties."
Walsh indicated less than 1% of sales that are pending have contingencies. This is reflective of the pressure on the housing market.
The economy is looking good and there's a lot of optimism because of stock market highs. He mentioned stocks drive the region's marketplace due to the dominance of the tech industry here.
Once rates start to soften, Walsh predicts the market will get tougher for buyers. First-time buyers who were priced out by market competition last year will likely give it another shot. Economists predict as the Fed starts lowering rates later this year that repeat buyers who have hesitated moving because they've felt locked-in with the low mortgage interest rates they obtained early on will also return to the market. Additionally, kids who are starting to leave their parents' homes can be viewed as potential buyers down the road.
"With such tight inventory we are starting to level off with nothing to sell," said Walsh.
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