San Jose Housing Market Forecast 2024
A Tale of Two Variables
In the heart of Silicon Valley, where technological innovations and data drive decisions, there lies a city whose housing market is as dynamic as its high-tech landscape - San Jose. Imagine a chessboard where every move is calculated, each pawn is a potential home, and the players are tech-savvy individuals like you. As we delve into the San Jose housing market forecast for 2024, it's crucial to focus on two pivotal pieces in this strategic game of 2024: interest rates and inventory. The dance between these two factors will shape the year and your journey in conquering the San Jose real estate market this year.
The Major Variable: Interest Rates
Interest rates, the heartthrob of the real estate market, have shown signs of improvement since October, transitioning from a time when many buyers faced over 7% for a 7-year ARM. The current scenario presents a Jumbo 30-year rate back to 6.375%. As we closely monitor these rates in our monthly Homeowner Experience Real Estate market reports, we anticipate the Federal Reserve's potential reductions thrice in 2024, approximately one per quarter. This shift will monumentally influence the mortgage rates and, consequently, the number of buyers in the market.
Envision the best-case scenario: rates sliding back into the 5% range, welcoming more buyers and a lot more multiple offers. However, in the worst-case scenario, if rates hover around 6-6.5%, the market could tighten, especially if the second variable changes.
The Second Variable: Local San Jose Inventory
Inventory, the silent player in the San Jose housing market, remains critical to the trend of the San Jose average home price. If inventory, or the number of homes for sale in San Jose stay low, we're looking at a fiercely competitive market. The worst-case scenario for buyers would be if inventory in San Jose stays under 400 homes, leading to a strong imbalance in supply and demand. This could result in significant overbidding and price increases, potentially appreciating over 10% on top of October 2023 prices, likely surpassing the peak in the spring of 2022.
On the flip side, the best-case scenario would see inventory returning to normal, leading to a more balanced market for buyers and sellers, with prices appreciating by another 5%.
San Jose Housing Market Predictions for 2024
So, what’s my forecast for 2024 compared to last year? Expect an improvement in inventory and the number of sales. The early Spring is likely to witness a significant surge in buyer demand, propelling prices upward quickly, as observed in Q1 of most years, especially Q1 following record low inventory like Q1 2018 and Q1 2022. This year, we might see more move-up buyers entering the market allowing more opportunities for first time buyers to get in to the San Jose Housing market.
Listen to details and see our discussion of the local San Jose Housing Market charts in our YouTube Market report.
Overbidding, a common trend in recent years, might start at 5% over-asking but is unlikely to reach the heights of 2021-2022 when it exceeded 10% and even hit 18% over list price on average in Q1 2022. Price increases are inevitable, but the trajectory remains to be seen.
Advice for Homebuyers and Sellers
For those looking to buy, the advice is clear: act sooner in 2024 for the best prices and least competition. Beat the rush and be prepared to compete to win a property before prices appreciate further. If you're not financially ready now, educate yourself on the local market and plan for overbidding in your budget. Our Homeowner Experience team offers a free home buyer consultation to help you plan for home buying journey. Don't wait, the monthly cost numbers are likely only going to get worse.
Sellers, on the other hand, should prepare their houses and be ready with a transition plan, let's discuss your plan and steps in a home seller consultation. If you need to turn around and buy, earlier is better to avoid the intensifying competition.
Homeowner Experience Real Estate market reports are designed to aid high-tech employed homebuyers who understand data. By keeping a close eye on these reports, you can navigate the market direction and competition more effectively, helping you win the bidding wars of 2024. There is no replacement for an expert San Jose Realtor on your side, so let's connect!
Conclusion: Looking Ahead
As we step into the unfolding story of San Jose's housing market in 2024, remember, the major variable to watch is interest rates which will tip buyer demand intensity if it gets low enough! By closely following the mortgage rates along with inventory trends, you can strategically position yourself in this dynamic market. Whether you’re buying or selling, staying informed and prepared is key. After all, in the world of high-tech and real estate, isn't it all about making the right move at the right time?
What will your move be in the San Jose housing market of 2024?