Welcome to the latest edition of the Santa Clara County Real Estate Reportfor October 2024. This month, we explore some interesting market trends, shifts in interest rates, and what this means for the future of real estate in the region. Whether you're a buyer, seller, or just keeping an eye on the market, we've got valuable insights to share!
Interest Rates & Market Trends
In a notable shift, the Federal Reservemade its first cut to the benchmark interest rate since 2020 on September 18th. After 11 consecutive increases from March 2022 to August 2024, the Fed reduced the target federal-funds rate by half a point. This reduction signals a potential trend towards more favorable market conditions for buyers and sellers alike.
Although inflation fell to its lowest level in three yearsin September, mortgage rates saw some volatility, spiking in early October before settling back to levels not seen since February 2023. However, this drop in interest rates hasn’t spurred the rebound in sales that many had hoped for. Buyers are still cautious, and there has been a decline in the number of homes available on the market.
That said, homes that do go on sale are selling quickly and often for above asking price, showcasing the competitive nature of the market despite lower inventory levels.
Santa Clara County Trends
In Q3 2024, the median house sales price in Santa Clara County saw a slight dip compared to Q2, following a common seasonal trend. The median price drop was about 3% year-over-year, aligning with typical market behavior where spring prices peakand cool off in the fall.
As we head into October, which is considered the heart of the autumn selling season, we anticipate a possible increase in price reductionsas sellers aim to get their homes into escrow before the winter holidays. However, despite these reductions, overbidding remains high, with many buyers competing fiercely for available properties.
In 2024, there has been a significant rise in price reductions compared to the previous year, indicating that some sellers may have overestimated the market’s strength.
Property Types: Townhouses & Condos
Different property types are experiencing unique trends. The median sales price for townhousesincreased by 3.5%in Q3 2024 compared to last year, driven by seasonal shifts in supply and demand.
On the other hand, condo priceshave seen a decline from their Q2 peak, dropping by about 4.5%year-over-year. This is a continuation of a longer-term trend where Bay Area condo priceshaven’t appreciated at the same rates as single-family homes.
Interestingly, bidding wars continue to be a common occurrence, with average overbid percentagesranging between 5% and 15%above the asking price, especially for homes that are listed at lower prices.
Santa Clara County Demographics & Home Size
Santa Clara County is one of the most diverse regions in the world, and this diversity is reflected in its real estate market. As of 2024, the median house square footagevaries greatly across different cities. The largest homes are found in Los Altos Hills(4,843 sq ft), followed by Saratoga, Los Gatos, and Palo Alto.
Final Thoughts
As we move further into the fall, it will be interesting to see how the market reacts to ongoing interest rate cuts and the evolving buyer sentiment. Sellers are eager to close deals before the end of the year, so we can expect competitive pricing strategies and possibly more price reductions.
Want to stay updated with all the latest in Santa Clara County’s real estate market? Be sure to check out the Houmify Podcastwhere we dive deeper into these topics and more. You can listen to our podcast on Spotify, Apple Podcasts, YouTube, or wherever you get your podcasts!
Stay tuned for next month's report, and as always, Houmify is here to help homeowners with all their real estate needs!
