It’s magic: As the housing supply plunges in Silicon Valley, sales somehow inch up

In the old days, people used to say real estate was all about “location, location, location.”

These days, it’s just hard to locate a house that’s for sale.

The housing supply keeps dwindling: “It’s low, man,” said Kevin Swartz, a Sereno Group agent based in Saratoga. “All the agents talk about it. In many cities or MLS areas there are fewer than 20 active listings. In Cupertino or Mountain View there may be as few as five.”

He began pulling numbers from the Multiple Listing Service.

Here’s the snapshot that emerged.

Today in Santa Clara County, just 475 single-family homes are on the market.

During the month of November, on average, 479 homes were offered for sale on any given day. Compare that to November 2016, when the average number of homes for sale was 1,179.

That’s a 59 percent drop in the number of active listings for single-family homes.

The busiest month of 2017 thus far was May, when, on average, 1,192 homes were offered for sale. The busiest month of 2016 was July, when the average was 1,841.

What’s going on?

Homeowners are opting not to sell, because the tax penalties are considerable given the huge appreciation in value on most properties. Better to sit on your equity, Bay Area owners figure.

And so the vicious cycle continues. The housing supply shrinks, the competition among buyers continues, the prices rise.

Remarkably, 2017 sales are running slightly ahead of 2016 sales, probably because buyers are so determined — or desperate.

During the first 11 months of 2017, 10,009 single-family homes were sold in the county. That exceeds the total for the first 11 months of 2016, when there were 9,703 sales.

With a 59 percent drop in the number of listings, how can that be?

It’s simple.

“We’re eating through all the inventory out there,” Swartz said.

Photo: This house on Quetta Court in Sunnyvale recently listed for $1,899,000 and sold for $2,445,000. (Courtesy Erdal Team)

 

 

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