Silicon Valley Real Estate Market November 2023
The real estate market in Santa Clara County continues to show strong activity, with properties priced under $2 million still receiving multiple offers when priced appropriately. In contrast, San Francisco County is experiencing a slower pace of activity, while San Mateo County falls somewhere in between the two.
For two consecutive years, inventory has decreased by about 22%. Higher interest rates have made the pool of qualified buyers smaller, leading them to be more cautious about their investments. Properties in challenging locations do not appear to benefit significantly from the current lack of inventory in the market.
The combination of higher interest rates and tight supply has resulted in an increase in the percentage of all-cash buyers. In 2023, close to 28% of purchases were made with all cash, according to data from the California Association of Realtors.
Simultaneously, homeowners are reluctant to move due to their lower current mortgage rates, lower property taxes, and the desire to avoid capital gains. This trend has led to homeowners holding onto their properties for longer periods than ever before. (see chart below)
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