If you are having a difficult time finding a home in Santa Clara to buy you’re not alone. This year’s single family home inventory has peaked at 54 homes just before memorial day, and currently sits at 45 homes for sale. To put this in perspective, this level is about 20% lower than last year at the the start of June.

Even though home prices are up around 20%-25% from last year, inventory has not adjusted. As we all learned in macroeconomics 101 as prices increase supply should also increase until an equilibrium is reached. As higher prices motivate sellers to put their property on the market, expectations should be that inventory this year would be higher than last year. Although there has been a slow down in the rate of offers and home appreciation do not expect home values to settle any time soon.

Although interest rates have shot up in the last few weeks, buyer activity is still strong and will likely motivate those buyers still looking to be even more aggressive. The market continues to be tough for buyers, and there is no evidence in sight that its getting any better.