End-of-summer 2015 Santa Clara County and San Mateo County real estate statistics


Over the past 5 months, the DOW has moved between a high of over 18,300 in mid-May to a low of approximately 15,600 around August 25, and as of today, it has climbed its way back up to nearly 17,000.  Similarly, the NASDAQ hit a peak closing of over 5,200 on July 20, dipped as low as 4,500 on August 25 and closed up at nearly 4,800 today. What is even more striking about this volatility is the fact that most of these declines to the downside happened very rapidly and specifically over one week from August 17-25.  Then both indexes made some recovery almost mirroring each other up to around September 16 and over following two weeks, the NASDAQ tested back near its 2015 lows and the DOW declined again by late September.

What impact does this have on real estate?  Historically, people have been more confident making larger purchases during stable environments.  Conversely, when there is volatility and uncertainty, people tend to become confused and indecisive even if outside forces have no immediate impact on their personal finances.

Meanwhile, rates have remained incredibly attractive and Silicon Valley and the Bay Area's innovation and employment machine appears to be gaining momentum, not slowing.  This paradox can certainly create some uneasiness and instability in the minds of buyers and sellers alike.

Sellers:  Have been the beneficiaries of dramatic appreciation over the past 3-4 years and arguably have had little incentive to sell while their assets increase in value.  They also have limited options on where to move if they should decide to sell.  In one of our most recent sales meetings, our agents shared a few areas where most sellers are moving to. About half or less of our salespeople indicated sellers moving up within our local market areas.  The other half mentioned a number of sellers moving away to areas such as Oregon (Bend), Idaho, Texas (Austin), Arizona (Phoenix), Southern California (San Diego), South County (Gilroy, etc.) and Santa Cruz.

It was encouraging to affirm that our local move up market has finally been gaining some traction.

Buyers:  Faced with limited inventory, competition and rising prices, they are unsure if now is still a good time to enter the market.  One additional challenge here is that often the best season for buyer's who are shy of competition to buy is during the fall or winter months.  Yes, historically, there may be fewer listings to choose from during this season, often there is less competition and sometimes room for negotiation, a concept nearly unheard of these past few years.

While most buyers choose to enter the market in spring either for convenience, out of belief that this is the season to buy, or because they somehow feel more comfortable when more people are buying (even though they would prefer to have no competition), I am reminded that this point forward in 2015 is an opportune time to be a buyer in this market.

The biggest question as we close out 2015 and look ahead to forecasting the new year will be: Where is this real estate market heading?  Sellers who have on their horizon to sell during this growth cycle may finally be inspired to get on with it now that there have been a few doses of reality in the equity markets.   A reminder that valuations cannot rise indefinitely and that markets do cycle up and down.  Meanwhile, this same dynamic will leave buyer's wondering if we have reached a market peak for this cycle and if a better deal is to be had in waiting for another season and time.

Admittedly, our forecasting for the past 2-3 years has been spot on.  As we crossed this summer, I began to sense that market predictability was starting to elude us given all of the various national and global forces.  As the dust is clearing and we remain focused on the hard data, we have a good level of confidence in making some predictions about what lies ahead.  As we work through each county report, let's pay close attention to total available listings/supply, number of new listings entering each market and month's supply of inventory.



  1. Highest Median Sale Price increase out of all 3 counties on two year trend:  +43%
  2. Sold Median Price two year trend leading For Sale Median Price over same period:  +43% vs. 34%
  3. May of 2015 outlier over past two years in terms of Sold Median Price high point of $1,150,000 for the month.
  4. Sept 2015 vs Sept 2014, "new listings" nearly identical (666 vs. 678) so no concern over dramatic increase in surplus inventory.


  1. For sale/listing units has trended down nearly -37% over two year period.
  2. Number of sold/closed units trend has been flat over two year period.
  3. Total # for sale:  end of Sept 2015 was 1,286.  Last Sept 2014/1,498 and Sept 2013/1,885.  (We have significantly less supply this Sept heading into Fall/Winter than we did last Sept and keep in mind that Jan 2015 showed the lowest inventory on record).


  1. Sept 2015 stood at 1.2 MSI as compared to 1.5 same time last year and 2.3 MSI in September of 2013.  More market compression this year than last year (same for all 3 counties reported here).


  1.  43% under contract as of Sept 2015 compared to 37% same time last year.



  1. Sold Median Price up nearly 30% on two year trend.
  2. For Sale Median and Sold Median Price nearly mirroring in terms of percentage increase over past two years:  (34% & 30% respectively).
  3. Interesting observation:  From Sep 2013 through Oct 2014, the Under Contract Median Price exceeded the For Sale Median Price 10 times.  This phenomenon did not occur once from Nov 2014 through Sept 2015.  Furthermore, the disparity between the For Sale Median and Under Contract Median Price for Sept 2015 is notably distorted particularly when you make the same comparison for Sept 2014 & Sept 2013 where the Under Contract Median was higher.  A possible indication of sellers pressing on list (For Sale Prices) and what is actually selling beginning to lag behind?  We will continue to analyze this data point.
  4. Sept 2014 vs Sept 2015 "new listings" nearly identical (1613 vs. 1645 respectively - same trend as SMC) so no evidence of dramatically climbing inventory coming to market.


  1. For Sale/listing units has trended down -30% over past two years.
  2. As compared to SMC where the number of closed units has been flat for the past two years, we see a modest increasing trend of over +15% in Santa Clara County in sold/closed units.
  3. Total # for sale:  end of Sept 2015 was 3,463.  Last Sept 2014/4,042 and Sept 2013/5,090.  (Similar to SMC, SCC has considerably less inventory this Sept heading into Fall/Winter than we did the previous period of prior year, keeping in mind that last year's levels resulted in the lowest recorded supply of homes for sale in Jan 2015).


  1. Sept 2015 stood at 1.3 MSI as compared to 1.9 same time last year and 2.7 MSI in September 2013.  Again, more compression this year based upon current inventory and monthly rate of sales.


  1.  38% under contract as of Sept 2015 as compared to 30% same time last year.

When we sift through the volatility and noise the same equation still applies to real estate:  Supply & Demand.  Based upon the current supply levels in all three counties, it's highly unlikely that we will see any material inventory increases between now and year end.  As a result, we will begin January of 2016 near historical supply lows.  In addition, based upon the normal number of new listings entering each market and our rate of sales (partly evidenced by MSI), we actually have more compression in our markets this fall than we did during the same period last year.

What is more difficult to measure, is demand.  We have noted comments from the field citing fewer multiple offers, longer marketing periods and some price reductions.  However, if we were to dive back into the same season of 2014, we would discover a market behaving quite similarly.  Perhaps, built into this market is a bit more hesitation on the demand side due to the equity market volatility, anxiety over the Fed's plan of action and global weakness and concern.  Still, there is so little inventory, it does not take a great deal of demand to buoy.

At this point, if we focus solely on current inventory levels, month's supply and new listings entering the market, we can be confident that limited supply is again on the horizon to close out 2015 and to lead off 2016.  My theory, however, and it's just a hunch, is that we may likely see a healthier inventory acceleration in early 2016 unlike the trickle of these past 2-3 years.  Getting into the explanation as to why, well, we will continue to provide supporting evidence as 2015 draws to a close and we launch bravely into a new year!

Should this theory prove to be true and demand holds relatively stable to strong, then we have an opportunity to experience one of the most balanced, healthiest and abundant transactional markets in a good number of years.  It's what many, including first-time and move up buyers along with their Realtors have been hoping for.