Inventory continued to fall in December, with every Silicon Valley community we track (except Mountain View) seeing declines of more than 35%. The decline overall was about 40% from November and 14% from a year ago. The only city with more than a one month supply was Los Altos Hills, with 3.8 months. Mountain View and Sunnyvale had less than one week of inventory at the end of December. The overall supply fell from about 1.5 months at the end of November to about a month at the end of December.

Price softened across the board in December, with the median sales price falling about 3% from November. The good news is that prices were still about 3% higher than a year ago. Los Gatos/Monte Sereno (-$337,000) and Mountain View (-$125,000) had the biggest losses from November. The sales price to list price ratio also fell in December in most cities. Los Alto Hills, Los Gatos/Monte Sereno and Saratoga had average sales prices that were lower than the list price.

Sales fell right along with inventory. Only Los Gatos/Monte Sereno had an increase in closed sales from November. The eight Silicon Valley area communities we track lost a total of 58 sales from November (26%) and 28 from a year ago (15%).

Inventory also fell in the beach communities, with Aptos and Santa Clara seeing declines of about 40% from November and 25% from December 2015. Aptos and Capitola had less than a month and a half supply at the end of December.

The median sales price was down about 3% in the beach areas from November but was still about 13% higher than a year earlier. Aptos, Santa Clara and Capitola all had decreases from November but only Capitola’s median sales price was below that of a year ago. Homes generally sold for less than the asking price in December; approximately 97% on average.

The beach communities did not see the decline in sales that the Silicon Valley area did. SALES were flat from November and only slightly lower than a year ago. Aptos had higher sales in December than either November or a year ago.