Are you considering buying? But maybe you think that now is not the right time since the market may continue to slide? Well consider this, San Jose is the fourth most expensive city nationwide for renters. According to Matt Woolsey in a recent Forbes magazine article, the average rent in San Jose is $1,612. This ranks just below Boston which has rents at an average of $1,658. The top two most expensive cities for renters are San Francisco, with an average rent of $1,904, and New York City, which has an astounding rental average of $2,922. Talk about not being able to pay the rent!

So San Jose is the fourth most expensive city to rent in the country. Fourth?!?! Are you kidding me? Even more expensive than Los Angeles, San Diego, DC, Miami (Miami!), and Chicago. If you are currently renting and think that you are just putting money down the tubes, well, you are near the top of the list for rental rates.

This is long overdue, but let’s take a look at how the condo market in downtown San Jose really fared over 2007. Since I’m already behind, let’s just dive into the numbers. As always, the following statistics represent Central San Jose’s (MLS Area 9 which includes downtown San Jose) condos, townhomes, and lofts.

Annual Breakdown

Year . . . . . . . Closed Sales . . . Median Sales $ . . . . Total Sales Volume

2007 . . . . . . . . 273 . . . . . . . . . . $500,000 . . . . . . . . . $137,078,510

2006 . . . . . . . . 396 . . . . . . . . . . $498,000 . . . . . . . . . $196,698,222

A pretty marked decline in the number of closed transactions in 2007 from 2006. Both the number of closed sales and the total sales volue dropped approximately 30% from the previous year. Median sales price, however, had a slight increase.

Year . . . . . . . Inventory . . . . . Closed Sales . . . Median Sales $ . . . . Total Sales Volume

Q1 2007 . . . . . 136 . . . . . . . . . . 80 . . . . . . . . . $511,750 . . . . . . . . $41,179,976
Q1 2006 . . . . . 105 . . . . . . . . . . 82 . . . . . . . . . $531,250 . . . . . . . . $42,934,639

Q2 2007 . . . . . 170 . . . . . . . . . . 78 . . . . . . . . . $520,000 . . . . . . . . $40,441,220
Q2 2006 . . . . . 139 . . . . . . . . . . 121 . . . . . . . . $470,000 . . . . . . . . . $59,345,500

Q3 2007 . . . . . 162 . . . . . . . . . . 65 . . . . . . . . . $495,000 . . . . . . . . $32,207,653
Q3 2006 . . . . . 131 . . . . . . . . . . 102 . . . . . . . . $495,000 . . . . . . . . $50,307,495

Q4 2007 . . . . . 135 . . . . . . . . . . 45 . . . . . . . . . $435,000 . . . . . . . . $20,656,638
Q4 2006 . . . . . 87 . . . . . . . . . . 91 . . . . . . . . . $490,000 . . . . . . . . . $44,110,588

As you can see, the first quarter of 2007 held steady compared to 2006. In the second and third quarters of 2007, the market slowed as the subprime fallout started to take shape. The fourth quarter of 2007 was abysmal compared to 2006 with less than half the number of closed transactions. If we look even more closely, you will see that the while the sales figures in the second and third quarters were down from the previous year, they were relatively steady. The last quarter of the year, beginning in September is when the market came to a near halt.

. . . . . . . . . . . Closed Sales . . . . . . . .
Month . . . . . 2007 . . . . 2006 . . . .
January . . . . 24 . . . . . . 20
February . . . 23 . . . . . . 25
March . . . . . 33 . . . . . . 37
April . . . . . . 28 . . . . . . 34
May . . . . . . . 28 . . . . . . 41
June . . . . . . 23 . . . . . . 46
July . . . . . . . 26 . . . . . . 30
August . . . . . 23 . . . . . . 32
September . . 12 . . . . . . 40
October . . . . 12 . . . . . . 32
November . . . 14 . . . . . . 49
December . . . 18 . . . . . . 47

The numbers started dipping after Q1 2007 but clearly the biggest drop started in September, this is particularly noticeable when comparing it to the numbers for 2006 during that same time period. As I discussed in a previous blog, the numbers may be a bit skewed with new construction developments selling in 2007 and not reported on the MLS. This may account for some of the dropoff but its highly doubtful that it would account for much more than a handful of transactions each month. While downtown San Jose wasn’t nearly in the slump as other parts of California or the country, these statistics clearly show that is wasn’t immune from the subprime fallout either. With elections in California on Tuesday and the state of the housing market clearly on many people’s minds, 2008 is sure to be an eventful year.

*These statistics are generated using information from the MLSListings, Inc. (formerly RE InfoLink) MLS, but have not been verified and are not guaranteed. MLSListings, Inc. disclaims any resposibility for the accuracy and reliability of these statistics. This information should not be relied upon for real estate transaction decisions.