Collins: What does an inventory boom mean for the local housing market?

For May, housing inventory is up 8% year over year, according to Dave Walsh, vice president and manager at Compass.

“Buyers have been waiting for their opportunity to have multiple choices on available properties. This is their time,” he said.

Not surprisingly, the number of sales also rose to nearly 7.5%. What’s a little surprising is the sheer number of price reductions in May, 52%. Walsh explains this is unusual for the heart of the spring selling season.

“Many sellers are expressing a willingness to work with buyers to get a deal done now, whereas, for the previous five months of the spring selling season, they had not been as willing to negotiate,” he said.

Mary Ann Brown D’Antonio with Sereno Real Estate had a referral for a Veterans Affairs buyer in April with a max price of $1.3 million, but was concerned she wouldn’t be able to find them a single-family home in Santa Clara County.

“At that time, the market was showing signs that it might be slightly shifting, and more inventory was starting to come on,” she said. “On June 15, I was able to get my client into a contract on a single-family home in Morgan Hill, $50,000 under list price with contingencies. This is a deal that I don’t think would have existed a few months ago.”

While the inventory is up year over year, compared to historical norms we are still quite lean. 2024 Santa Clara County Association of Realtors President Michelle Perry has some advice for those who are trying to time the market.

“The added inventory has provided some needed relief for buyers in an ultra-competitive market. While there is more selection now, buyers should not stay on the sidelines waiting for interest rates to drop,” Perry said. “This is a losing strategy because housing prices continue to rise year over year. You can always refinance the rate, but not the price.”

The takeaway here is that the added inventory provides buyers with more choices than they have had in a while. That may open more opportunities to find that dream home. As always, buyers working with a skilled real estate professional will have a leg up when negotiating that final purchase agreement.

San José Spotlight columnist Neil Collins is CEO of the Santa Clara County Association of Realtors, a trade association representing more than 6,000 real estate professionals in Santa Clara County and surrounding areas. Contact Neil at [email protected].