CALIFORNIA - The housing market in San Jose continues to be tight, with a limited number of homes for sale. This is reflected in Zohl's Home Value Index, which measures the number of homes for sale in a given month. However, the housing stock has fluctuated recently, making it difficult for first-time home buyers to compete. In addition, real estate investors have outbid first-time home buyers, making it tough for them to sell their homes.
In addition to this, inventory levels are also favorable for condo buyers. This sustained supply is decreasing the median price of condominiums. As a result, people are no longer looking for small homes but rather want homes with sufficient space for an office and outdoor space. These two factors will help keep home prices in San Jose affordable.
The real estate market in the US has been a seller's market for the past several years, but in 2023, it is expected to shift back to a buyer's market. In addition, the deceleration in home price growth will allow new buyers with a low budget to enter the housing market. However, different areas will behave differently.
The median home price in California has increased by 184% over the past decade. However, the percentage of homes that sold for $1 million or more will fall to 35% by 2023. The median age of first-time homebuyers is now 34 years old. Rental rates for single-family homes are also at record highs, increasing by 14% year-over-year.
While the housing market in the Bay Area has continued to experience record prices, it is beginning to flatten out. Zillow predicts that the median home price in the nine-county Bay Area will decrease by 1.8%. As a result, prices may not fall significantly until 2023.
The median price of a single-family home in San Jose, California, rose to $1,516,655 in May 2023. This is up 25% from May 2021. In addition, San Francisco house prices have continued to climb. In 2022, the median home price is $1.5 million, up from $1.4 million in the previous year. This price increase is driving slower home sales.
Regardless of the real estate market condition, San Jose has some positive real estate trends in 2023. Home prices are expected to moderate as inventory levels increase, and the housing market will move toward a buyer's market. At the same time, mortgage rates will rise more slowly, and alternative financing sources will become more available. With a positive outlook, investors can capitalize on a favorable market in 2023.
One of the most critical trends in San Jose, California, real estate will be affordability. The median price of a two-bedroom home in San Francisco will rise by $1.35 million by 2023, making it unaffordable for many families. Meanwhile, the city's high cost of living also contributes to an exodus. Zillow, an online real estate site, recently released new statistics on the phenomenon.
