California City Sees Flood of Homeowners Trying to Sell Houses – Newsweek

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San Jose, California, saw new listings rise nearly 50 percent in June compared to a year ago, a signal that property owners in the city are increasingly looking to sell their homes in one of the more expensive housing markets in the country.

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Along with a high number of listings, the city saw pending sales—a forward-looking indicator of home purchases—jump 18 percent last month from a year ago, according to data from Redfin.

Other cities that experienced a jump in listings included Seattle at nearly 29 percent, Miami at 25 percent, and Boston at 24 percent, while Montgomery County in Pennsylvania saw a 22 percent increase.

san jose
The fountains outside the Fairmont Hotel in downtown San Jose, California, are pictured on August 29, 2007. The city has an expensive and active housing market.
The fountains outside the Fairmont Hotel in downtown San Jose, California, are pictured on August 29, 2007. The city has an expensive and active housing market.
Justin Sullivan/Getty Images

The increase in options of homes to buy in San Jose has been accompanied by soaring prices. The median sale price of a home jumped nearly 15 percent in the year through May, to $1.5 million, according to Redfin. Despite the high costs, May saw 660 properties sold, a 19 percent rise from the same time last year.

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“Most homes get multiple offers, often with waived contingencies,” Redfin’s analysis points out. “The average homes sell for about 8 [percent] above list price and go pending in around 9 days.”

Nearly 80 percent of homes sell above the listing price, according to the Redfin study.

The housing market in San Jose appears to bucking national trends, where high mortgage rates and expensive prices are keeping buyers away from purchasing a home.

Mortgage rates were up over the last week to 7.13 percent on 30-year fixed rate loan. The cost of high home loans has depressed activity in the market at a time in the summer when the housing sector is generally at its peak. Mortgage applications were down 3 percent for the week ending June 28, and were 12 lower than at the same time a year ago, according to data from lenders.

Demand has also waned. Redfin’s Homebuyer Demand Index, which tracks requests for tours and other homebuying services from the company’s agents, plunged 17 compared to the same time a year ago, though was unchanged from the prior week.

But in San Jose, a quick glance at recent sales in the city reveals that a 4-bedroom, 2 1/2-bathroom home of about 2,000 square feet sold for $2.5 million from an offer of $1.5 million. Another property with 3 bedrooms and 2 1/2 bathrooms sold for $1.25 million, 26 percent above the list price.

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