San Jose Housing Market Gains More Inventory in 2021

For years, we’ve heard about tight inventory conditions within the San Jose real estate market. The inventory situation is so constrained that home buyers in the San Jose area have been lining up to make offers.

At long last, we have some good news. San Jose real estate market inventory has increased measurably over the past year or so, according to a recent report from Realtor.com. As a result of this trend, those who are planning to buy a home in San Jose in 2021 could have more properties to choose from.

But don’t be fooled — it’s still a very tight real estate scene with high competition among buyers. While inventory has increased within the San Jose housing market, it still remains well below what’s considered to be a balanced market. In other words, local real estate conditions still favor sellers over buyers.

San Jose Housing Market Gains Inventory in 2021

In March 2021, the research team from Realtor.com published a housing market update with data and trends for the nation as a whole. Their report also contained key housing data for the nation’s 50 largest metro areas, including San Jose, California.

According to Realtor.com’s analysis, the total number of active real estate listings declined in 48 of the 50 metro areas studied. Inventory levels rose in only two metros — San Francisco and San Jose. The total number of active property listings within the San Jose housing market increased by 10.4% from February 2000 to February 2021.

The number of new or recently added property listings rose even more, climbing 13.6% year over year.

Granted, that’s not a huge increase in listings. But for a real estate market with such low inventory levels as San Jose, any increase would be welcome by local home buyers.

According to a March 5 CNBC article, written by Diana Olick:

“While the biggest drops in new supply were in Oklahoma City and Kansas City, Missouri, declines were widespread across the country. The only major cities seeing gains in inventory were San Jose, California, and San Francisco…”

These are important trends from both a home buyer’s and seller’s perspective. Within the San Jose real estate market, low inventory conditions have made things highly competitive among buyers. It’s also part of the reason why home prices in the area have risen so much in such a short period of time.

Meanwhile, Home Prices Keep Climbing

According to the real estate data company Zillow, the median home value in San Jose, California rose by around 15% over the past year or so. That was well above the national average for the same timeframe, and higher than almost every other metro area in the country.

It’s hard to imagine that kind of growth, when you consider that the median home value in San Jose is already north of $1 million.

The reason why prices keep climbing in this housing market has a lot to do with the inventory situation. There is a lot of demand within the San Jose real estate market in 2021, but there aren’t enough properties listed for sale to satisfy that demand. This supply shortage is putting upward pressure on home prices and making things much more challenging for local home buyers.

Given all of this history, it’s good to see San Jose housing market inventory increasing for a change. If this trend continues, it could have a moderating effect on home prices while making life easier for buyers. Time will tell.

Still One of the ‘Fastest’ Markets in the Country

In the Realtor.com report mentioned above, the San Jose housing market stood out for inventory reasons. It was one of only two metro areas where overall inventory (measured by total active listings) increased over the past year or so.

But San Jose stood out for other reasons, as well. It also had the lowest number of “days on market” among the 50 metros analyzed by Realtor.com.

During the month of February 2021, homes listed for sale within the San Jose-Sunnyvale-Santa Clara metropolitan area spent a median of just 17 days on the market. That was the lowest median of all 50 metro areas included in the report, and one of the lowest of any city in the country.

This is largely the result of low inventory levels within the San Jose real estate market. With chronically low housing supply and strong demand from buyers, it’s no surprise to see this market top the list in terms of quick home sales in 2021.

Related: Bay Area favors sellers over buyers

The housing inventory situation in San Jose also underscores the importance of mortgage pre-approval. In such a highly competitive real estate scene, it’s important for buyers to have their financing squared away ahead of time. Otherwise, you risk losing out to a competing buyer. And that’s where we can help!

Need financing? Located in Walnut Creek, Bridgepoint Funding serves the entire San Francisco Bay Area. We offer a variety of mortgage options including both conforming and jumbo loans. Please contact us if you have questions about applying for a mortgage loan.