Buy a House in San Jose Now or Wait?

Should You Buy a House in San Jose Now? A Data-Driven Guide for Tech-Savvy Buyers

Forget gut feelings - let's crunch the numbers! Ever fantasized about owning a piece of the vibrant San Jose scene? But with interest rates fluctuating and Bay Area housing market predictions painting an uncertain picture, the question of "buy now or wait?" looms large. As a fellow techie with an engineering background, I understand the desire for a data-driven decision. So, let's ditch the gut feeling and dive into the numbers of the San Jose housing market forecast 2024, specifically focusing on interest rates vs. housing appreciation.

Bay Area Housing Market Predictions 2024: Is San Jose a Buyer's Paradise or a Wait-and-See Game?

Mortgage interest rates are expected to improve in 2024. My San Jose Housing Market predictions for 2024 said I expect mortgage rates to decrase 3 times over this calendar year. With jumbo mortgage 30 year fixed rates in early February 2024 at 6.5%, you could expect to see 5.75% one year from now. This decrease in interest rate will make San Jose home prices more afforable if you wait, but the other variable is the San Jose house price trend.  Will housing prices increase at the same time that interest rates drop?

San Jose House Price Trend: Will They Soar or Stabilize?

With record low inventory in January 2024 and lower mortgage interest rates than a few months ago, the San Jose Housing Market is seeing another cycle of more demand than supply.  When this situation happens (yellow line of housing supply or inventory is lower than green bars showing San Jose Homes sold), overbidding picks up and the San Jose house price trend increase quickly.

San Jose Housing Market & San Jose house price trend chart

Did you know that the in 2023, the average San Jose home sale price was 4% over the asking price. Where will the sales price to list price trend head in 2024 with the supply and demand imbalance?  I can tell you confidently based on San Jose Housing Market history that the percentage over asking price for a home sale will increase in the first months of 2024 putting our vote that San Jose home prices will soar.  Overbidding increases equate to price increases making affordability more difficult.

Data Dive: Buying Now vs. Waiting a Year - Can You Beat the Market?

Scenario 1: Imagine snagging a San Jose single-family home for $1.75 million with a 20% down payment. At current 6.5% interest rates, your monthly payment might sit around $10,147. But consider this: that's locked in. You're building equity while enjoying homeowner tax benefits. No need to worry about San Jose house price trends changing your monthly payment down the line.

Scenario 2: Fast forward a year. Housing prices, based on historical trends, could jump 6.61%, pushing your purchase price to $1.865 million. Even with a slightly lower interest rate (let's say 5.75% based on our predictions above), your monthly payment lands around $10,850. Plus, you'll need a bigger down payment, and property taxes will be based on the higher value. Remember, waiting also means missing out on a year of equity building and potential appreciation gains.

Refinancing to the Rescue: Can Lower Rates Offset Rising Prices?

But wait, there's more! By buying now and refinancing when rates drop, you could be quids pro quo. Sure, your property taxes go up slightly due to appreciation, but they'll still be lower than waiting a year. Plus, refinancing with a lower loan amount means even lower payments. Talk about maximizing your savings!

Should I buy a house in San Jose Now or wait? actual numbers

We walk through each scenario and the payments step by step so you understand the full side by side comparision in our video on this topic comparing whether to buy now or wait.

Should I buy a house in San Jose Now or wait? video cover

The data suggests buying now and refinancing offers a clear advantage. You save on cash, build equity faster, and potentially pocket over $10,000 per month compared to waiting.

But here's the real kicker: the market is dynamic. What if prices surge more than the historical average? Buying now becomes even more attractive, especially with record low inventory and increasing demand.

San Jose Housing Market Forecast 2024: Beyond the Numbers - What the Experts Say

There are mixed reviews from experts about the San Jose House price trend.  Here is what some sources say.

  • Possible price decline: Many experts, including Zillow and the San Francisco Chronicle, predict a decrease in prices, ranging from -2% to -6.1% by the end of the year. This is linked to rising interest rates and a cooling market.
  • Slowdown, not crash: While prices may drop, experts don't anticipate a severe crash. This is due to continued job growth, high demand, and low inventory in the region.
  • Market remains competitive: Despite a potential decline, expect competition to remain high due to limited housing options and continued interest from buyers.

Specific Expert Opinions:

  • In our YouTube video, Theresa discusses various factors influencing the market, including record low housing supply, lack of new developments and increased buyer demand. Her video emphasizes using data and analysis to make informed decisions.
  • Rick Sharga, Founder of CJ Patrick Company: He predicts that housing supply won't increase significantly until mortgage rates drop back to the low 5% range, which might not happen in 2024. This suggests sustained demand and potentially stable prices.

Important Reminders:

  • Predictions are just that: The market is dynamic, and these are just expert opinions based on current trends. Unexpected events can always influence prices.
  • Focus on your own situation: Don't base your decision solely on market predictions. Consider your personal finances, goals, and risk tolerance when making the "buy now or wait" call.

Additional Expert Opinions & Resources:

The Final Byte: Make an Informed Decision - Tailoring Your Strategy to Your Goals

This is just a glimpse into the complex world of San Jose real estate. Remember, every situation is unique. If you're ready to crunch the numbers for your specific scenario, reach out to a trusted local expert like Homeowner Experience Real Estate. They can connect you with a lending partner who understands the market and help you navigate the steps in the right order, based on your goals and risk tolerance. Follow our step-by-step home buying guidance.

Remember, staying informed and consulting with local real estate professionals can help you make the best decision for your individual circumstances. If you are ready to start talking about your custom home buying plan, schedule a free Home Buying Consultation

So, should you buy now? The answer lies in your data, your goals, and your comfort level with the dynamic market. But one thing's for sure: with the right information and guidance, you can make a confident decision that aligns with your goals.

Ready to unlock the door to your San Jose dream home? Take the first step – reach out today!


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