Inventory trends have been steadily rising since the end of January. Home prices in general are being affected.  Recent news articles about the lending industry have caused buyers to hesitate with the increasing inventory sellers that are motivated to sell have been reducing prices to lure buyers to make offers. Problem homes and homes in problem areas are being affected the most.

There is a lesson here that bears noting. If you buy a problem home in the heat of a hot market, you will certainly be the first to loose value when the market cools down. I can't repeat that enough and yet 2 years ago when the market was super hot and there were multiple offers on properties backing up to freeways and with shopping centers in there back yards. Those that bought these homes for an inflated price are surely regretting it now. 

OK, back to today's info. As you can see from the graph below, we have more available inventory now since any time in the last 5 years. For buyers, this appears to be good news as seemingly you can take your time and wait out the seller and negotiate hard against them.  Well, not so fast. Good properties priced right are still selling well AND sometimes with multiple offers.  So if you are in the market for a home the following guidelines are in play:

Gilroy and Morgan Hill,  You can be patient as there are plenty of listings in all price ranges and you can often negotiate down from the asking price

Santa Teresa  currently has 132 Single Family Home for sale. This is up from the beginning of the year but not as much as some areas.  New listings are slowing in this area.  You can negotiate some on many of these homes but in some cases you will find good listings with multiple offers.

Evergreen has 392 listings at the moment.  This is up 20% since June. Negotiate here

Alum Rock is one of the big problem areas for sellers and one of the best opportunities for buyers. Home prices here have come down and with 644 listings (Up 10% since June) and only 13 sales in August you can see how sellers are more likely to negotiate significantly here.  This area is one of the areas with the most loan defaults, short sales and foreclosures which offers their own opportunities for home buyers.

Berryessa (North Valley) has 263 listings at the moment with 64 new since July and only 33 sales in August. North Valley has a lot of condo units and because it is central to the high tech area there is steady interest from buyers. Good properties will have multiple interest.

Alviso is such a small market. There are only 6 homes available for sale. I recommend staying away from this area for now as it is a hard market for your home to appreciate in.

Santa Clara has 188 listings up from 137 in July. This is an area that appears to have a rapidly increasing inventory. Many sellers here haven't gotten the message yet that inventory is growing and they are not coming down on price much yet. There is a decent selection of homes.

Downtown San Jose and Rose Garden has 336 listings up only slightly over the last few months.  Very few properties here sell for asking price or above with most homes selling for below asking price. Be aggressive here.

Willow Glen has 205 Listings which is as high as it has been at any time in the last 10 years. You can negotiate aggressively hear and if the seller is motivated, they will sell for less.  

South San Jose is another area of high inventory with 319 listings. There were only 9 sales in August indicating the potential for major price drops here.

Blossom Valley also has high inventory with 308 listings For this area, we had 28 sales with most going for less then asking price.

Almaden Valley is one of those areas that is out of step with the rest of the area. It has only 74 listings. There were 19 sales in August and about half went for near or above asking price.

Cambrian has 195 listings with  35 August sales. A bit more than half went for above asking price.

Campbell has 151 listings with 43 sales in August. The sales to listing ratio in August show this to be one of the most active sales areas with a significant number selling for at or above asking price.

Los Gatos has 95 listings down significantly over the last 2 months.   Los Gatos is a very active market with more homes selling above asking price.

Saratoga has 104 listings, again down over the last 2 months This data along with Los Gatos indicates higher priced homes with good schools are still selling well.

Cupertino is perhaps the most active market with only 76 listings. There were also 46 recorded sales. Almost every home sold above asking price indicating multiple offers on most every home.

Sunnyvale has 112 listings. August also had a lot of sales activity with 50 sales with most selling above asking price.

In summary, the lower priced areas are slow in sales while the middle and higher priced areas are still doing well.  Inventory in the lower priced areas is growing faster too but in some of the higher priced areas have seen inventory drop recently.