Online real estate listings site Trulia recently investigated where home sales were most likely to fail in the US in 2016. California’s Ventura County topped the list with a “sales fail” rate of 11.6 percent, and three other metros in the state also made it into the top 10.
Wondering what a “sales fail” is? As Trulia explains, it’s when a home fails to sell after interest has been expressed by a buyer. Generally what happens in such situations is that a home inspection goes awry or a loan falls through — the buyer then pulls out and the home is placed back on the market.
The three other California metros on the list are Los Angeles, San Jose and Orange County. They have “sales fail” rates of 10.3 percent, 9.7 percent and 9.6 percent, respectively.
San Jose’s 9.7 percent rate is particularly noteworthy as it’s more than triple what it was in 2015. Trulia doesn’t offer a concrete reason for that large increase, but does note that overall more US home sales involved first-time buyers last year. First timers “face unique hurdles” and are often unfamiliar with the home-buying process, meaning that they are more likely to see their home purchases fail.
Because of its proximity to Silicon Valley, San Jose is home to a huge number of young people with high-paying jobs at tech companies like Apple, Google and Facebook. It’s possible that as these people enter the housing market they are helping to boost the number of “sales fails” in the city.
San Francisco, one of the most expensive US housing markets and arguably the most-discussed housing market in California, had a relatively low 2016 “sales fail” rate of 5 percent.