Silicon Valley's housing market took a breather in January, as inventories fattened and prices flattened, compared to a month ago, but many buyers may have missed the boat because sales weren't sailing either.

With mortgage interest rates falling for four consecutive weeks, affordability held steady during January this year as prices on single-family detached homes rose only $3,000 following a year-long price run up that left the January 2005 median $109,000 higher than the January 2004 median.

A more detailed look at communities within greater Santa Clara County shows a mixed market where virtually every market yielded fewer sales both month-to-month and year-to-year, but higher end markets more often suffered the price declines.

In San Jose, for example, the median price of single-family homes rose $10,000 from December to January. Sales fell from December to January but rose from January last year to January 2005.

"The City of San Jose is more of a low-end market place and the number of transactions is up almost 10 percent," said Richard Calhoun, broker/owner of Creekside Realty in San Jose.

Calhoun says there is too little relevant data in the current statistics to determine an immediate trend. The market mix is based, in part, on the seasonal nature of the data. Much of January's data feature sales from the traditionally slower holiday season which almost always reveals less activity -- temporarily.

Countywide, Calhoun's Bay Area Real Estate Market Newsletter reveals the median price of single-family detached homes in closed sales moving from $555,000 in January 2004, to $661,000 in December 2004 to $664,000 in January 2005 -- another median price record.

Sales plummeted during the traditional seasonal drop from 1,185 in December to 839 in January this year, compared to 849 a year ago.

Meanwhile, inventory plunged from 2,324 a year ago to 1,547 in January this year, according to Calhoun's report which is compiled with statistics from the area's official multiple listing service, RE InfoLink in Campbell.

Calhoun said condo prices moved down to $410,000 in January 2005 from $429,000 in December 2004. The median condo price was $355,000 a year ago January. January's condo sales this year, at 352, were off from December's 472 and lower than last January's 375. The condo inventory in January, at about 440, was almost half what it was a year ago at 855.

Apparently, some buyers weren't satisfied with relatively flat affordability in Silicon Valley and moved their housing dollars one county south to San Benito County where prices are about $100,000 less.

"The majority of homes (in San Benito County) are going to move-up buyers and out-of-towners relocating. Pretty much all of it (relocating) is from the Silicon Valley area, Sunnyvale, San Jose, Saratoga. And our people are moving over to Merced and Stanislaus (counties)," said Bob Sully, a real estate agent with Pennington Town & Country Realty in Hollister, who reports to Realty Times' Market Conditions.

Buyers not rushing to cash in on the Silicon Valley housing market's temporary affordability lull may be gambling that rates will remain flat and the market will continue to see small price gains.

"Real estate is a great long term investment and you are not only going to buy or sell based on what the market is doing. If you have the flexibility to buy or sell and if you can figure out what the market is doing you could be in a better position to take advantage of that," said Calhoun.

The trouble is, this is probably the worst time of the year to try to make decisions based on short-term data. The data is seasonal data which is inherently difficult to decipher.

"But what's going on in the market right now is pretty difficult to figure. The stats are based on pre-holiday sales. It's less useful than at any other time of the year because there's such a dramatic change. It's not very useful in determining what the market is going to do going forward," Calhoun added.

Published: February 9, 2005

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.