According to SpotProperty’s market data, the total housing inventory in San Jose decreased in August. At the same time, the median price per square foot for a home remained relatively stable compared to the previous month.
In August, total housing inventory dropped by 7 percent. At the start of the month, there were 754 homes for sale in San Jose. At the end of the month, there were 704 homes for sale.
The decrease in inventory is a continuing trend. Total housing inventory is significantly down compared to one and two years ago. In August 2011 there were 1,877 homes for sale, meaning there has been a 62 percent decrease in inventory. In August 2010 there were 2,653 homes for sale. This represents a 73 percent decrease between then and now.
Contrary to what one might think, low housing inventory can be beneficial to home sellers. With fewer opportunities to purchase homes in an area, prices can increase. In high demand areas such as San Francisco, this effect can be compounded. At the same time, however, low inventory makes it difficult for potential home buyers to locate a home to purchase because of a lack of choices. Often the most desirable houses will receive multiple offers, which can increase the selling price.
The decrease in housing inventory has coincided with a steady increase in the median price per square foot for a San Jose home. Today the median price per square foot for a home in San Jose is $356. This is a 2 percent increase compared to the previous month.
Overall, the price per square foot for a San Jose home is trending upward. In August 2010 the price per square foot was $312. In August 2011 the cost per square foot was $309. This represents a 14 percent increase in the price per square foot from 2010, and a 15 percent increase in price per square foot for 2011.
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