Joe Wilson's Silicon Valley Real Estate Blog

Home buyers and sellers are always wondering what the market's doing and which party currently has the upper hand in the negotiation of price and terms. The market this year has improved in terms of sales, price and time to sell, but...is it a buyer's market or a seller's market? A good metric for evaluating the relative strength of buyers and sellers is "Months of Inventory" which measures how long it would take to sell all of the current active inventory at the current rate of sales. Here's what this currently looks like for single family homes in Santa Clara County:

Traditionally when "Months of Inventory" falls between two and four months, it's considered to be a balanced market with neither buyers nor sellers having the advantage. Last year and earlier this year the Silicon Valley market moved from a buyer's market into this balanced range though there were notable variances to this in certain high demand areas of the valley. Since May however, we've been edging out of this balanced range and back toward a buyer's market. This may be due to the expiration of the first time buyer tax credits or due to the approach of the fall/winter slowdown or both. Regardless of the reason, with interest rates still near all-time lows, it's a great time for buyers to take advantage of their relative advantage in the local market.