January 2025 Market Deep Dive - Silicon Valley
Ascend RE January 24, 2025
Ascend RE January 24, 2025
Local Lowdown
Median single-family home prices rose in 2024, following historical seasonal trends. Single-family home prices in Santa Cruz saw the largest gain, up 20%. Conversely, Santa Cruz condo prices experienced the largest contraction, down 18%.
Total inventory fell 36.9% month over month, dropping inventory to a record low. We expect inventory to continue to decline in January and the overall market to slow due to lack of supply.
Months of Supply Inventory indicated a sellers’ market for single-family homes and condos with the exception of Santa Cruz condos, which is more balanced.
The median single-family home prices are up year over year
Silicon Valley home prices remained strong despite higher mortgage rates, with initial corrections from April 2022 to January 2023 offset by low but growing inventory and high demand. Year over year, single-family home prices rose 5% in San Mateo, 7% in Santa Clara, and 20% in Santa Cruz. Prices typically peak in summer, with mild contractions afterward. Santa Clara home prices may reach record highs in 2025, though San Mateo and Santa Cruz are less likely to. With mortgage rates now closer to 7%, sales are expected to slow further.
Sales far outpaced new listings in December, dropping inventory to all-time lows
The 2024 Silicon Valley housing market showed steady improvement until Q4 when inventory dropped sharply, reaching record lows in December. While 2023 followed typical seasonal trends with low inventory, 2024 saw more new listings, allowing inventory to grow until Q4. Condo inventory hit a four-year high in September before declining, while single-family home inventory fell 20% year over year due to a 60% drop in Q4. Inventory is expected to follow historical seasonal patterns in 2024, but single-family home supply remains near record lows.
Months of Supply Inventory indicated a sellers’ market in December
Months of Supply Inventory (MSI) measures the balance between supply and demand, with three months considered a balanced market in California. Silicon Valley typically favors sellers, reflected in its low MSI. In 2024, MSI rose, especially in Q2, but dropped in Q4, reinforcing a sellers’ market for single-family homes and condos. The exception is the Santa Cruz condo market, which remains more balanced.
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Provided Courtesy of Ascend Real Estate
Provided Courtesy of Ascend Real Estate
Provided courtesy of Ascend Real Estate
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