How’s the Saratoga California real estate market?

Today we’ll look at the monthly sales numbers for Saratoga, CA 95070 and also view live charts reflecting homes listed for sale on the MLS. Both houses and condos/townhomes will be considered as will varying price quartiles via the live charts.

Monthly Real Estate Update for Saratoga – prices of houses rising:

As with much of the “west valley”, the Saratoga, CA real estate market is a seller’s market, but it does not appear quite so overheated as neighboring – and far more affordable – Cupertino right now. Unlike many other areas, though, inventory is a little looser and is up month over month (which is seasonally expected) and year over year (not a seasonal issue, of course). 

Here are the real estate sales statistics for closed sales in March 2012 among houses in the 95070 zip code (click on link to read the full Saratoga Real Estate Report for houses):

And February

The median sales price, which is the number indicating that half of the homes sold for more and half less than this number, has risen almost 8% from a year ago.  This implies that more expensive homes are selling – and possibly that home values are rising too. The average is also up about the same amount year over year.

Next, please find the basic statistics for closed sales in February 2012 among townhouses & condominiums in the 95070 zip code (see the Saratoga Real Estate Report for condos & townhomes):

And February

To really understand the condo and townhouse market it’s better to see actual sales and compare them quarter by quarter, using similar units.  If you are interested in buying or selling a condo or townhouse in Saratoga, don’t go it alone or rely on online stats – give me a call and we will crunch the numbers specifically for your home and pinpoint the pricing.

Median List Prices of Saratoga Homes for Sale

First, a graph displaying the overview of the median list prices for condominiums and single family homes in Saratoga – all price quartiles combined:

In general, the seller’s market is showing itself for houses in the fact that list prices are rising.  Not so with condo and townhouse pricing. That’s a much cooler market.

Next, the median list prices for single family homes with a breakdown by price quartile. (Please note that the info would be even more precise if broken down by school district, but this particular program doesn’t yet filter by schools.)

In most price points, the list prices are now rising slightly, but most of all in entry level homes. In the last few months we’ve seen the high end home sales start to pick up in Saratoga, with a good run up in late 2010 before sliding earlier.  Starting to improve now, though.

And now, list price of condos by price quartiles.

Interestingly, the condo market is not enjoying at all the decent seller’s market seen among houses in this city.  Every price point appears to be suffering, but the high end most of all.

Inventory of both houses & condos in Saratoga

It’s seasonally typical to have more inventory in summer than other times of the year. Going back a few more years (see below), please note where the peaks are found – always sometime in summer. (Single family homes only.)

It’s less clear, but still visible, with condominiums and townhouses in Saratoga:

Average Days on Market for Saratoga Homes for Sale

Houses by quartile is not much different – DOM was rising across all price points and has been since August until spring, when the bottom and two quartiles (blue and green) reversed the trend. These are the “hotter”or improving segments of the market right now.

It is strangely disjointed in the Saratoga Condo market, though. I can’t explain why this had been so “all over the board” based on just this data. But since August, all four groups appear to be following the same general trend.

My suspicion is that the homes with the better schools are faring the best, but that’s just a hunch based on how well homes usually sell – it’s not provable with this info at hand.

If you’re interested in buying or selling a Saratoga home, please contact me. I’ll be happy to meet with you for a no obligation initial consultation.

Saratoga Real Estate Listings – Saratoga Homes for Sale – Condos, Townhouses & Houses for Sale in Saratoga

If you’d like to browse Saratoga homes for sale, I invite you to have a look here! Below please find all properties currently listed as available on our local MLS.  Please be advised that there are a number of different property types and school districts listed here.  For more precise information on houses, condos or town houses on the market, please contact me via email or complete a form at SiliconValleyHomeHunt.com or on my popehandy.com website.  Either way it will come to me and I will personally set up your search for a Saratoga property. (If you are moving to the South Bay area from far away, please also see my Silicon Valley relocation website for helpful tips.)

Showing properties 1 - 5 of 89. See more city of Saratoga real estate.
(all data current as of 5/23/2012)

1. $1,898,000 : 19171 Allendale Av, Saratoga
   
   5 beds, 3 full baths

   Home size: 3,306 sq ft

   Lot size: 23,220 sqft
   
2. $3,895,000 : 19905 Sunset Dr, Saratoga
   
   4 beds, 3 full, 2 part baths

   Home size: 4,800 sq ft

   Lot size: 1.17 ac
   
3. $1,988,000 : 20795 Russell Ct, Saratoga
   
   3 beds, 2 full, 1 part baths

   Home size: 2,238 sq ft

   Lot size: 22,200 sqft
   
4. $2,088,800 : 14000 Alta Vista Av, Saratoga
   
   5 beds, 4 full, 1 part baths

   Home size: 2,862 sq ft

   Lot size: 11,946 sqft
   
5. $2,890,000 : 20125 Winn Rd, Saratoga
   
   5 beds, 3 full baths

   Home size: 3,684 sq ft

   Lot size: 16,500 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Interested in buying or selling a home in Saratoga?  I grew up there (and in Santa Clara), graduated from Saratoga High before heading off to college, and have been selling homes in Saratoga and nearby parts of Santa Clara County & Silicon Valley since 1993.  I understand the impact of Saratoga’s school districts on home buying decisions, the importance of various locations to market value, and resale concerns that can improve or detract from your return on investment.

Read more about my background on the Valley of Hearts Delight website (sister site to this blog) and learn why my past clients and other readers of the San Jose Mercury News named me “best real estate agent in Silicon Valley” in 2011. There you’ll also see my accomplishments/honors/awards, info on sales experience, and more. 

Or just take a moment to phone me at 408 204-7673, or email me at mary (at) popehandy (dot) com.  If you prefer, you can simply fill out a form online instead.

Today we’re looking at the real estate market for houses in some of the “west valley” communities along the base of the Santa Cruz Mountains – areas where schools are good, crime is low, residents enjoy scenic views of the hills (or of the valley from the hills, depending on the location) and overall, a highly educated population not too far from Highway 85.

Of the four municipalities, three are really very similar to each other in several regards.  Cupertino has the largest population – about 58,000 people – but Los Altos, Los Gatos and Saratoga are all similarly sized, somewhere between 27,000 and 30,000 residents.  The latter three also enjoy a traditional “downtown” area which is popular with pedestrians, bicyclists and motorists alike. (Monte Sereno has 4,000 residents, which is so small that the statistics are very easily thrown from month to month, so it is omitted in this quick study.)  Of the four, Cupertino, then, is the least similar due to size and lack of a central downtown area.

We’ll take a quick look at these areas now in terms of the real estate market trends and statistics for each area, considering just “class 1″ (houses and duet homes).  The charts used below are from Altos Research, to which I have a subscription, and they will be automatically updated each week.

(1) Median List Price (per Altos Research):

Los Altos and Saratoga are neck and neck for most expensive areas in which to purchase a house. Over the last year, though, Los Altos has seen a rise in the median list price. There has been a corresponding rise in demand with the success of several local companies in the region (Apple, Google, Microsoft, LinkedIn, Facebook), some of which have gone public and others of which are on the verge of doing so. Los Altos is more convenient to most of these.

Los Gatos, which is a little more affordable than Saratoga and Los Altos, has seen a very noticeable increase in pricing also, while Cupertino’s prices have declined a little.

(1A) Median list price of the bottom quartile of all four:

(1B) And, very interestingly, same data but for the top quartile – the luxury market:

Here we see Los Altos clearly overtaking Saratoga! And also that Cupertino’s pricing is significantly lower than Los Gatos in this tier, and also that it has lost a lot of ground in the second half of 2011. 

(2) Inventory:

The inventory patterns are pretty consistent over the last year across all four cities and the town of LG.

(3) Average days on market:

It is really interesting to see the days on market by city or area. Los Gatos (the furthest from the high tech giants mentioned above) has had the hardest time with home sales, and Cupertino the easiest. Cupertino is not the closest to all of these firms (though its home to Apple, of course), but it is the a very good value for people who are buying homes based on school performance tests. As others have said, if you’re buying for high API scores, Cupertino offers the most “bang for the buck”.

(4) Median MAI – Market Action Index:

What’s hot?  Everything is under 30, which is the cutoff between buyers’ and sellers’ market – all of these are buyers’ markets when the areas are taken as a whole:

But tease it out by price quartile, and we can see that Cupertino was a seller’s market for the most affortable houses for awhile last summer, but it has crashed back into the buyers’ market range again:

And among the most expenses homes or luxury estates, Cupertino has the “best market” but not by a huge margin:

Right now, Los Gatos has the most inventory and is the deepest buyers’ market – making it an excellent time to purchase a home there!  Of course it always depends on the micro market – the exact neighborhood, condition of the home etc. but overall it’s a very favorable time to purchase a house in all four of these areas, but Los Gatos in particular.  Cupertino is a little more affordable and remains a great bargain in the west valley areas of Santa Clara County.  High end housing or luxury homes are the softest market of all – a tough time to sell but a great time to buy.

Interested in buying or selling a home in Silicon Valley’s west side or nearby? Please call or email me and we can discuss your plans & goals – no obligation.  mary (at) popehandy (dot) com or 408 204-7673

What should you look for when buying a luxury home in Silicon Valley? Whether it’s a move-up purchase or a first home, there are a few tips which will be helpful for you to know going into it that will make the whole home buying experience smoother and easier.  We’ll hit on 3 areas: first geography & construction, second hyper local factors that impact market value, and finally qualities or features of the property or house itself.

It’s hard to assign an exact price tag on what constitutes an estate or luxury property, but in and near Silicon Valley, in most regions it’s the $2,000,000 and up price point (it will be less in Morgan Hill, Coyote and Gilroy – and likely more in Hillsborough).

1. Geography and Bay Area Construction: it’s different here!

The first and most important thing to understand is that real estate and housing construction vary from one region of the country (or the world) to the next.  This is true for all types of homes, actually, but perhaps more obvious in the priciest homes. Luxury real estate in Silicon Valley is a little different from similarly expensive homes in other parts of the country due to our climate, soil conditions, and natural hazards, such as earthquakes. What seems mandatory for a high end home (and might be ideal to have elsewhere) could be a problem here, so it’s helpful to literally understand the lay of the land before you get too far along the home buying path. A couple of quick examples:

• A fabulous home in Boston or anywhere in New England may be built of brick.
• Here, a brick house is seldom seen because of earthquakes – we need our houses to move and bricks are not usually too good at that!

I mention these two upfront because well intentioned friends and relatives may want to stress the importance of this or that in a property – and it may simply not apply here. (Please see article: Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley)  If you are non-native to the San Francisco Bay Area, you may have assumptions about construction or architecture that may not work here. Please just be aware of that possibility.

2. Understand the importance of hyper local factors on the market value of a property

Schools can be a main driver for home values in the luxury market as all other segments.  Home buyers may not know that the town or city boundaries are usually irrelevant to school district boundaries. Here are a few examples:

• In Saratoga  there are 3 high school districts and 4 elementary school districts.  Before buying anywhere in Saratoga, then, you’ll want to know which district is which and where you’re buying.  If you want to utilize private schools, you may be delighted to find that you can buy more house for your money in one area of this lovely city than another.  Or you may want one school area over another for any number of reasons.
• In Los Gatos there are 2 high school districts and 3 elementary school districts.
• In the Almaden Valley area of San Jose, there are 3 high school districts and 3 elementary school districts

Often the lesser public school districts will have a lower lid on pricing than the very top districts or schools, so it’s important, when analyzing the pricing of an estate home, to factor in the weight of the school.

Geography can be surprisingly important.  Sometimes being on one side or the other of a major road or landmark can swing value 3% – even if it’s the same city, same zip code, same schools!  I see this in Los Gatos along both Blossom Hill Road and again at Los Gatos-Almaden Road: people prefer to be closer to the foothills and prices jump noticeably just for being on one side of these roads than the other.

Walkability is key for many Silicon Valley home buyers, though perhaps less so for some luxury buyers since the larger parcels that often come with them preclude much walkability.  Not always, though – in Palo Alto, Los Altos, Saratoga, Los Gatos and other Bay Area spots like Burlingame or San Mateo, some of the premier homes are not on acre lots but are “in town”.

3. What to look for in the estate property or high end home itself

At this point it’s a little trickier as each home buyer may have different priorities, likes/dislikes and tastes – so these are general guidelines only.

1.  Buy with selling in mind – you may have this property for 2 years, for 20 or more, but if you purchase an expensive home that is just too bizarre for the general consumption, you may be stuck with it when you are ready to sell it.
2. Location, location, location is so overstated that it’s nearly effete, but it bears repeating anyway.  Do you want to buy a $3 million house in a $1 million neighborhood? No, you probably don’t because it will really kill your resale value later.   So too if you buy raw land or a “dozer” – don’t overbuild for the neighborhood.  Try to be mid-range but don’t find yourself in the top 25% for home values in your area.  (NB: in some areas, like Menlo Park, neighborhoods are fairly irregular or non-conforming and you find little houses that need work next to McMansions.  It may not be possible to find conforming neighborhoods.  If you love the area anyway – go for it – but realize the risks.)
3. Quality construction and laoyout or floorplan matter.  Many home buyers care about Feng Shui and the orientation of the home and its elements.  But beyond that there are certain things that most buyers want or don’t want, and if your property violates these “rules” it can be harder to sell later.  Here are a few:
• It’s considered poor to be able to see a toilet from the front door
• The layout is less desirable  to have to go through a room to get to another room or to part of the house (such as going through the family room to get to the bedrooms)
• It is better to have a formal entry than to come straight into a living room, especially in a high end home
• The master bedroom should have its own private en-suite bath (this might seem obvious but you’d be surprised how many expensive houses have 2 bathrooms but neither dedicated to the master bedroom)
• Best to have the master bedroom face the back  yard and not the street
• Better to have more land in back than in the front yard
• If you like to entertain, look for a large kitchen that includes 2 dishwashers, at least 2 regular ovens plus a microwave, a vegetable sink as well as the regular ones, and if possible, also a “butler’s pantry” between the kitchen and formal dining room.
• If the house has 2 stories, look for at least one bedroom and full bathroom on the first floor (and possibly a half bath as well so the guest bath is private)
• The nicest luxury homes may have 2 laundry areas: one on the first floor and one on the main floor, if it’s a 2 story home.
• Most home buyers looking at properties over $1.5 million want to find the master bathroom equipped with a large soaking tub, separate shower, and dual vanities. Jetted tubs are not as popular as a few years back due to concerns over bacteria lingering in the plumbing, so more often the tubs are “soaking” and not “jacuzzi” types.
• The master suite often includes a small wet bar or coffee bar as well as a fireplace, walk in closet(s) and private deck or balcony.  In recent years these rooms have gotten bigger (and sillier – how much time do people spend there?) – a trend I believe will change over time.
• Luxury homes or estates usually have a minimum of a 3 car garage. (I’ve seen properties with as many as 10.)
• For the ultra luxury estates, usually there are guest or servant quarters (and likewise, in 2 story homes, a back staircase too).
• Pools tend to be found among high end homes, but sometimes also tennis courts, game rooms, indoor bowling alleys or other sports outlets (indoor golf driving or rifle shooting ranges too).
• Other rooms: libraries, offices, media rooms, hobby rooms may be included. Sometimes the home office or library may have a full bath nearby – a hint that it can double as a guest room.
• Green building: a growing trend is toward making high end homes eco-friendly or green.  This may include the types of materials used in construction (a percentage recycled or of easily renewable sources), heating & cooling systems that can close off or turn on various parts of the house so it doesn’t all need to be heated or cooled, high levels of insulation to make the home “tight” and not have energy losses. Possibly solar panels to warm the water in the home or pool.
• Years ago there was a lot of focus on wiring for computers in estate properties.  This is still the case but with the advent of wireless for everything, it’s not so critical. However, wiring for TV or movie viewing as well as musical entertainment throughout the home is very common with luxury properties – many owners want to be able to begin watching in one room and seamlessly move to another if so desired.
• In the luxury market it is very common to find security systems which include cameras at various locations.  In the ultra high end houses, there may be “safe rooms” too.

At the end of the day, much of what is included should reflect your values and the way you want to live.  Some luxury homes will have a private bath for every bedroom – but I’ve had clients say “why do I want that? I don’t want to spoil my kids or have more bathrooms to be cleaned”. How do you want to live?

There’s a balancing act between buying the home you want to enjoy and either overspending on a house or area or making a poor choice on an expensive ticket item that could be a great asset instead. It will help a lot to get good, local guidance from a trusted resource who’s got your back.  Looking for that helpful real estate adviser? Give me a call or email me and we can chat at my office, yours, a coffee shop, park, or anywhere convenient.

As an aside…this is the 500th article on this site, the Valley Of Hearts Delight blog or www.SanJoseRealEstateLosGatosHomes.com. ….  Thank you for reading!

 For more reading:

Cracked Foundations, Adobe Clay Soils and Water in Silicon Valley

What To Consider When Buying a Hillside Home in Silicon Valley

Where are Santa Clara County’s Earthquake Faults and Flood Plains?

The Silicon Valley Luxury Home Market (view a list of homes for sale, read more on criteria for location, amenities etc.)

Situated on a small knoll in the prestigious Los Altos Country Club neighborhood, the home at 1557 Plateau Drive features many of the most highly regarded elements which make a house a luxury property and a joy to see.

The Los Altos Country Club Neighborhood

Younger, Elegant Mediterranean View Home

The property at 1557 Plateau Avenue is younger, just 18 years old, constructed by a builder who was making it for himself and his family.  As you might imagine, the owner-builder utilized the land to make best use of the view opportunity.  He also created it with many extra features & finishing touches which distinguish a quality, custom home from tract housing.

The floorplan is flexible. There is a 2 car garage at street level, but a third which is accessed from the rear of the property – ideal for RVs, boats, and extra cars or vehicles. The 3rd garage can be used as built, or as a rec room, extra storage, or a number of other options.

Almaden Valley, which primarily consists of the 95120 zip code area of San Jose, is well known for its scenic beauty, great schools and low crime.

For people working in downtown San Jose, it is also fairly convenient – it’s almost a straight shot up either Almaden Expressway or Highway 87 to get into the downtown area, often just a 20 to 30 minute commute.

Within Silicon Valley, Almaden is regarded as a high-end neighborhood and very desirable. In this post we’ll discuss the geography of the valley, the advantages and disadvantages of being in Almaden, the public schools in 95120, the market conditions for the luxury homes there and finally you’ll be able to browse a list of luxury & estate homes for sale in the Amaden area of Silicon Valley.

The geography of the valley:

There are no shortage of hillside homes in this enclave of southwest San Jose. To the west lies the Santa Cruz Mountains, with the nearby peak of Mt. Umunhum looking over the valley. To the east sits the much lower and grassier Santa Teresa Foothills.  The oldest part of Almaden, ironically called New Almaden, is at the bottom of the v-shaped valley.  Continue further through the Cinnabar Hills and drive long enough and you’ll find yourself in Morgan Hill!

Advantages and Disadvantages:

One of the big advantages of purchasing a luxury home in San Jose’s Almaden Valley is that ordinarily you can get a little more “house for the money” then if you were purchasing similar real estate in Los Gatos, Monte Sereno or Saratoga (let alone Palo Alto or Los Altos).   Often, too, the homes are a little younger (though not always). In the southernmost tip, there’s quite a bit of equestrian property, too.  San Jose is a wonderful city for children, and one of the main drivers for people and families moving there is the quality of life for kids.  That makes San Jose real estate prized everywhere, but especially in this southwestern enclave.

One of the potential disadvantages is that like any small valley, it can heat up in summer and traffic can sometimes be a little more tangled. Luckily, though, luxury homes are virtually always air conditioned and there are many alternate routes, so these are not insurmountable issues.

Schools in Almaden

The public school situation needs a little bit of explaining as it tends to confuse most newcomers.  (Please find the 2010 API scores for Santa Clara County here.)

In the 95120 zip code, there are three different school districts at play, and the schools run from good to great:

• most of Almaden belongs to the San Jose Unified School District (which includes both elementary, middle and high schools)
• some of Almaden, though, belongs to the Union School District (elementary and middle schools) and the Campbell Union High School District (Montevideo, Oak Canyon & nearby neighborhoods)
• and a tiny sliver, including just a few streets close to Hicks Road, actually belong to the Los Gatos School District and the Los Gatos-Saratoga Union High School District

Within San Jose Unified, all the local elementary and middle schools are very good.  At the high school level, though, there’s a big difference between the API scores at Pioneer (823 in 2010) versus those at Leland High School (890).  So often, home buyers of high end housing will prefer a more southern location in Almaden to secure places at Leland.

How’s the market for high end homes in San Jose’s Almaden Valley 95120? San Jose Real Estate & The Almaden Market

(Read the state of San Jose real estate in Almaden in ALL price ranges via  my REReport  Almaden stats and market trends.)

Dynamic reports – next we’ll use Altos Research charts to look at the top 50% of homes for sale (the more expensive half) next.  These charts are dynamic so will always be current.

Prices of homes for sale among the top 50% in San Jose 95120 (Almaden Valley):

First, just over the last year…

Next, going back several years….

Average Days on Market of homes for sale (most expensive half):

Inventory

Average price per square foot

Want to learn more? Please also see:
The Silicon Valley Luxury Home Market
The Luxury Real Estate Market in Almaden, Los Gatos, Monte Sereno, and Saratoga
Hacienda Cemetery and Memorial Park in New Almaden
Graystone and Pfeiffer Ranch Areas of Almaden Valley

View Almaden Valley Estates & Luxury Homes for Sale

Prices from $1,500,000 and up.

Showing properties 1 - 5 of 10. See more 95120 zip code real estate.
(all data current as of 5/23/2012)

1. $4,500,000 : 21670 Shillingsburg Av, San Jose
   
   5 beds, 8 full baths

   Home size: 10,500 sq ft

   Lot size: 4.77 ac
   
2. $3,500,000 : 7233 Glenview Dr, San Jose
   
   5 beds, 4 full, 1 part baths

   Home size: 6,465 sq ft

   Lot size: 1.55 ac
   
3. $2,950,000 : 20315 Mckean Rd, San Jose
   
   6 beds, 3 full, 1 part baths

   Home size: 5,000 sq ft

   Lot size: 2.50 ac
   
4. $2,650,000 : 18680 Vista De Almaden Ct, San Jose
   
   5 beds, 5 full, 1 part baths

   Home size: 6,000 sq ft

   Lot size: 1.59 ac
   
5. $2,400,000 : 6055 Guadalupe Mines Rd, San Jose
   
   3 beds, 2 full baths

   Home size: 2,317 sq ft

   Lot size: 4 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

The luxury homes market often behaves very differently than the rest of the real estate market as a whole.  If interest rates jump around, the impact is often far less since the home buyers of estate properties may not be nearly as dependent upon financing.  Many of these fine homes & estates are paid for “all cash”.  (In some cases they do this but later arrange financing, perhaps funding a “charitable remainder” trust rather than a more typical institutional loan.)

How’s the real estate market for high end homes in Los Gatos, Monte Sereno and the Los Gatos Mountain communities?  Defining “luxury homes” is a bit tricky because what constitutes luxury can vary from area to area (check out these estate homes for sale in the Buffalo NY area). For now let’s use prices of $2 million or greater as we first look at the Months of Inventory or Absorption Rate – though in fairness, the luxury price point is a little lower in the mountains.  (Six months is considered balanced by the National Association of Realtor, less is a sellers market and more is a buyers market.)

As of this writing (Jan 21, 2010) here are the numbers for homes over $2,000,000:

Los Gatos, 95030 for sale (active) = 20    Sold in the last month = 1  Months of inventory = 20

Los Gatos, 95032 for sale (active) = 14    Sold in the last month = 1  Months of inventory = 14

LG Mtns, 950303 for sale (active) = 2    Sold in the last month =0  Months of inventory = infinite

Monte Sereno   for sale (active) = 7    Sold in the last month = 0  Months of inventory = infinite

So right now, it is a deep buyers market in the luxury home strata in Monte Sereno, Los Gatos and the Los Gatos Mountains.

Next we’ll change gears and use Altos Research and quartiles to evaluate the most expensive listings.  We will look at the top quartile of list prices, the high end listings in Los Gatos (zip codes 95030 and 95032 in town), in the Los Gatos Mountains (unincorporated, 95033) and Monte Sereno (99.9% of which is in 95030 but a tiny sliver has the 95032 zip code).   The charts I’m using are live and will be continuously updated by Altos Research, to which I have a subscription.

List prices of homes for sale in the topmost price quartile in Los Gatos, Monte Sereno and the Los Gatos Mountains

The most expensive of these four areas is Monte Sereno.

Notice, for a moment, the “dip” in the last year in each area. For Monte Sereno, it came early, around April. For Los Gatos 95030 (the area closest to downtown), it came a bit later, in around June. For Los Gatos 95032 it was later still, and much milder, with the low point in about September. And the Los Gatos Mountains, which tend to move very slowly in the best of markets, had a gentle downward drop that appears to have hit bottom in November. It as if there had been a rolling wave…. Monte Sereno got hit, and then recovered, the fastest. The lower the prices, the gentler the fall and rise. Interesting!

Also of interest is that the list prices in the mountains and in Monte Sereno are as good as or better than a year ago, but not so in Los Gatos 95030 or Los Gatos 95032.

Average Days on Market for Los Gatos, Monte Sereno & the Los Gatos Mountains among the top tier of pricing in each

Over the course of the last year, it appears that homes were selling faster (or perhaps being yanked off the market faster) such that it was easier to sell last summer than it is today for luxury homes in these parts of Silicon Valley.

Let’s look at the patterns.  For the most part, these four areas all have a “V” type of movement with days on market. Visually, we again see dramatically different level of drop, though, almost exactly like we saw with the list prices. Monte Sereno sees a sharp drop – very low, very fast. Los Gatos 95030 is just behind it in terms of the type of falloff of DOM and then Los Gatos 95032 a little less. In the mountains, though, we don’t see a dramatic change at all. There’s a little dip, but nothing like what we see in Monte Sereno.

Inventory of the most expensive quartile of homes in Los Gatos, the Los Gatos Mountains and Monte Sereno

Again, we find that although these are four different (but adjacent) areas, all follow the same pattern for inventory, which was at a height last summer and is fairly low now. That seems to be somewhat seasonal, though. Let’s see how it looks over more time.

We can note that there are dips in inventory levels each winter. Even so, what we see more recently is a lot more dramatic – or volatile – than what we’ve seen prior to 2010.  Year over year, inventory is up – and that doesn’t help to sell a luxury property.

Luxury house buyers, this is a great opportunity for you to get the best home for the money!

Luxury home sellers, you need to be serious about selling if you want to be effective in this market.  There are lots of ways to get qualified traffic through the door, and just as many to make those same buyers not bother. It’s imperative to leverage everything you’ve got going for your property if you’re serious about selling.

View a Sampling Silicon Valley Luxury & Estate Homes Online Now!

Browse fine homes & estates listed for sale in Los Gatos

Showing properties 1 - 5 of 48. See more city of Los Gatos real estate.
(all data current as of 5/23/2012)

1. $19,995,000 : 16450 Aztec Ridge Dr, Los Gatos
   
   6 beds, 7 full, 2 part baths

   Home size: 11,257 sq ft

   Lot size: 50 sqft
   
2. $9,500,000 : 16721 Madrone Av, Los Gatos
   
   6 beds, 6 full baths

   Home size: 6,000 sq ft

   Lot size: 21 sqft
   
3. $9,500,000 : 285 Wooded View Dr, Los Gatos
   
   6 beds, 6 full, 1 part baths

   Home size: 7,987 sq ft

   Lot size: 6.25 ac
   
4. $8,900,000 : 16350 Matilija Dr, Los Gatos
   
   3 beds, 3 full, 1 part baths

   Home size: 7,475 sq ft

   Lot size: 1.26 ac
   
5. $8,495,000 : Shannon Rd, Los Gatos
   
   6 beds, 7 full, 2 part baths

   Home size: 6,138 sq ft

   Lot size: 31.53 ac
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse high end properties for sale in Monte Sereno

Showing properties 1 - 5 of 6. See more city of Monte Sereno real estate.
(all data current as of 5/23/2012)

1. $4,500,000 : 16036 Greenwood Rd, Monte Sereno
   
   7 beds, 7 full, 1 part baths

   Home size: 7,336 sq ft

   Lot size: 1.17 ac
   
2. $3,999,999 : 18090 Daves Av, Monte Sereno
   
   6 beds, 6 full, 1 part baths

   Home size: 7,000 sq ft

   Lot size: 43,560 sqft
   
3. $3,795,000 : 15449 Banyan Ln, Monte Sereno
   
   5 beds, 4 full, 3 part baths

   Home size: 6,228 sq ft

   Lot size: 36,154 sqft
   
4. $3,588,000 : 16145 Greenwood Rd, Monte Sereno
   
   4 beds, 4 full baths

   Home size: 4,000 sq ft

   Lot size: 33,750 sqft
   
5. $2,295,000 : 15630 Michael Ln, Monte Sereno
   
   5 beds, 4 full, 1 part baths

   Home size: 3,924 sq ft

   Lot size: 9,583 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury houses for sale in the Los Gatos Mountains

Showing properties 1 - 4 of 4. See more city of Los Gatos Mtns real estate.
(all data current as of 5/23/2012)

1. $8,995,000 : 18550 Black Rd, Los Gatos Mtns
   
   5 beds, 8 full baths

   Home size: 18,000 sq ft

   Lot size: 11.09 ac
   
2. $2,999,000 : 18807 Bear Creek Rd, Los Gatos Mtns
   
   2 beds, 2 full baths

   Home size: 1,440 sq ft

   Lot size: 2.65 ac
   
3. $2,999,000 : 18805 Bear Creek Rd, Los Gatos Mtns
   
   4 beds, 2 full baths

   Home size: 1,440 sq ft

   Lot size: 2.65 ac
   
4. $2,250,000 : 21901 Bear Creek Wy, Los Gatos Mtns
   
   4 beds, 3 full, 1 part baths

   Home size: 4,700 sq ft

   Lot size: 7 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse estates and fine homes for sale in Saratoga, CA

Showing properties 1 - 5 of 46. See more city of Saratoga real estate.
(all data current as of 5/23/2012)

1. $17,500,000 : 22030 Mount Eden Rd, Saratoga
   
   6 beds, 6 full, 2 part baths

   Home size: 13,459 sq ft

   Lot size: 14.00 ac
   
2. $16,750,000 : 21116 Comer Dr, Saratoga
   
   6 beds, 8 full, 3 part baths

   Home size: 12,505 sq ft

   Lot size: 7.88 ac
   
3. $9,988,000 : 13388 Surrey Ln, Saratoga
   
   4 beds, 5 full, 1 part baths

   Home size: 8,500 sq ft

   Lot size: 1.05 ac
   
4. $6,988,000 : 13815 Pierce Rd, Saratoga
   
   6 beds, 5 full, 1 part baths

   Home size: 8,000 sq ft

   Lot size: 1.87 ac
   
5. $6,950,000 : 19730 Glen Una Dr, Saratoga
   
   5 beds, 4 full, 1 part baths

   Home size: 5,461 sq ft

   Lot size: 2.80 ac
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Please call or email me if you’d like assistance with buying or selling high end real estate in the west valley.  I’m happy to meet with you confidentially.

What makes a Silicon Valley house a luxury home? How is high end real estate different from the rest of the market? When is a property not just a home with land, but an estate? 

In other parts of the U.S., spending $700,000 may fetch a 4000 square foot home, new construction, in an upscale gated community with country club amenities such as a golf course, tennis courts, and more. Here, that same $700,000 will procure an entry to mid-level single family home in many parts of Santa Clara County. 

Luxury connotes a combination of qualities, features, and amenities. And it includes pricing (relative to the nearby market), condition, land, design. 

Pricing Luxury Homes in Silicon Valley: What Do They Cost? 

Expensive Silicon Valley homes are not necessarily luxury homes. Depending on the city or town, the price tag could be higher or lower. For instance, a fabulous house on a large lot in Gilroy’s Eagle Ridge might sell for 1/3 as much as the identical type of home, land and neighborhood found in Saratoga, Monte Sereno, or Los Gatos, or Los Altos, if a similar home happened to be available. Generally, though, luxury homes could cost as little as $1,000,000 or so in some parts of Silicon Valley or in neighboring counties, but in most parts of Silicon Valley, a true estate type property will be valued at $2,000,000 or $3,000,000 or more.  In some areas, such as Palo Alto, that $2 million doesn’t go too far and the home you can purchase at that price tag may need major updating – or it could be “land value”.  For our purposes today, we’ll use $2 million as the bottom number for estate properties, but it may or may not be the case in some areas. 

Land Value is a Significant Part of What Makes an Expensive House an “Estate” 

In Santa Clara County, which constitutes the lions share of Silicon Valley, the land is the thing that holds value, not the structure (in most cases, unless the home being discussed was designed by a world-famous architect, which is the situation in a few instances – Julia Morgan designed a home in Los Gatos at Fairview Plaza, for example). 

How much land is enough land? It depends on the location, but in many cases, an acre parcel is the minimum needed for a property to be considered as luxury real estate. It may be possible, though, for smaller parcels to qualify. For instance, some homes in Saratoga’s pricey and highly prized Montalvo area (the platinum triangle) may be on lots smaller than an acre, but by virtue of their superior location may be luxury homes even so. 

Location Within Silicon Valley Matters Tremendously 

As mentioned above, Montalvo is one of Saratoga’s finest areas, and homes there are often viewed as luxury homes or estates simply because of their prime location. Conversely, a home in the same city of Saratoga that backs up directly to Highway 85 is highly unlikely to ever be considered a luxury home, no matter how big the house is, no matter how new, no matter how beautifully updated or remodeled. The immediate area, and not just the zip code, will have the greatest impact on how the home or land is perceived by buyers. 

What do buyers want in luxury locations? 

• quiet, uncrowded areas
• views are appreciated (of the hills, the valley etc.)
• golf course views or neighborhoods
• good to great school districts usually weigh heavily (for resale)
• conforming areas where all the homes and parcels are large and valuable
• gated communities may be seen as a plus
• no issues: no high voltage power lines, no train tracks nearby, no freeway walls, and preferably, no busy streets (in some places along The Peninsula, though, grand old estates on large parcels do front busy roads)
• some high end buyers will factor in feng shui considerations too, so will not want to drive past a graveyard or have a view of a church when buying a multi million dollar property.
• some buyers may have specific wants or needs, such as equestrian properties with several acres and a stable to house several horses, access to trails, etc.

Where are Silicon Valley’s luxury home neighborhoods? 

San Jose has several luxury markets, including the lovely old Alum Rock area (near the golf course), the Rosegarden, young Silver Creek and Almaden Valley (all of these are in San Jose). Many of the other high-end areas sit along the foothills on the west side: Los Gatos, Monte Sereno, Saratoga, Cupertino, Los Altos, Los Altos Hills, and Palo Alto. Additionally, there are estates to be found in South County too – Morgan Hill and Gilroy (and Coyote Valley) offer some stunning properties for the discerning buyer too. Further north on the Peninsula there are beautiful estates to be found in Woodside, Portola Valley and Hillsborough.  In southern Alameda County, parts of Fremont’s Mission District have stunning high end properties too. 

When High End Homes are Custom Built, It Adds to Value 

Most of the San Jose area is tract housing. Thats not a plus. Saratoga and Monte Sereno are filled with very high end tract housing built by George Day, Gfreenbriar and J. Lohr, and being tract doesnt necessarily mean they aren’t also worthy of the title ˜estate or ˜luxury homes. Almaden has a large number of Shapell homes – very high-end tract houses too. But buyers do care about pedigree, and when they find the custom-built home, or the one-of-a-kind house, they value it. Unique and classy is good. 

What if you own one of the many, many tract homes in high end areas? For instance, George Day built a huge number of homes off Fruitvale Avenue in Saratoga in the 1970s. Those houses are, for the most part, larger than 3000 square feet and sitting on beautiful one-acre lots close to West Valley College and the old Odd Fellows Home (now Saratoga Retirement Community). The houses were well built. They enjoy being in the Saratoga School District. But they are definitely tract homes. 

Want them to be luxury homes? Customize them. Those houses were built with U-shaped kitchens, shag carpeting, rock fireplaces, white tile countertops with black or brown grouting, single pane windows and (most of the time) wood beamed ceilings. Most of these kitchens were large and could accomodate an island. When you remodel, go to the studs and add an island. Add crown molding and baseboard. Install hardwood floors. (Bamboo floors were the rage for awhile, but they are a soft wood, not hard, and are easily damaged.) Put in some beautiful Anderson or other high-grade windows and French doors. The neighborhoods are multi-million dollar areas, so spending a couple of hundred thousand to customize the home is money that’s usually well-spent. 

Don’t Over Improve Your Silicon Valley Estate Property 

Luxury home buyers may appreciate upscale things like a home theater, a huge, generously appointed kitchen, a butler’s pantry with its own diswasher, and areas that support their hobbies like wine tasting rooms and cellers, sports courts, and the like, but you can go too far and make the property hard to sell later, or at least not recoup what you spent while over-improving. Remember, not everyone can afford, or even wants, a $50 million property. 

Not sure how much is too much? Here are some examples: 

Good: spacious rooms, even in powder rooms.
Too much: putting diamonds into the bathroom fixtures (which I’ve seen in one home which screamed “conspicuous consumption” in Monte Sereno). 

Good: pools, jacuzzis, saunas, sports courts.
Too much: indoor shooting range 

Good: large garage, room for 4+ cars plus storage space.
Too much: 8+ car garages, or garages with expensive flooring. Even the wealthy have oil leaks! 

Good: one or two in-law or au-pair units.
Too much: more than 2 extra units and it looks like a compound. Don’t do it. 

Good: tasteful landscaping & hardscaping. Please consult professionals for design ideas and balance..
Too much: skip an abundance of statuary in the front yard. Whether it”s garden elves, fake deer, or Greek nudes, resist the temptation to have more than a couple of these ornamental elements in your yard. 

Things To Make Sure You Have in a Silicon Valley Luxury Home 

What do buyers want or need if they are spending lots and lots of money on a home? Here are a few items that are pretty much must-haves: 

• a good sized pool and jacuzzi or hot tub
• a beautiful backyard for entertaining, preferably with a “summer kitchen”
• the kitchen should have at least 2 regular ovens, plus microwave, regular sink plus vegetable sink (both with disposals), and 2 dishwashers (either both in the kitchen or one in the kitchen and one at either a wet bar or butler pantry location) – high end appliances a must
• a living room with high ceilings, lots of windows and an impressive fireplace
• a large, formal dining room
• a good-sized formal entry hall
• family room, preferably open to or at least near the kitchen, with surround sound and large screen t.v.
• minimum 3 bathrooms, preferably more
• three or more car garage
• home updated within the last 5 years (kitchen, baths) is appreciated; more than 10 or 15 years is considered in need of remodeling
• nice crown molding and baseboard is often important, though it depends on the style of architecture (it would not fit in so well with mid-century modern, for instance)
• air conditioning, heating by zones
• good insulation and “green construction” is a plus

There are many other things that luxury home buyers want or appreciate, from wine cellars and tasting rooms and vineyards to views, tennis courts, acreage, guest cottage, and more. There’s no absolute formula but quality in every detail is normally highly valued. 

Please note: In this Silicon Valley Real Estate blog, the Valley of Hearts Delight blog, I have more than a dozen articles or posts related to the Silicon Valley luxury homes real estate market. I invite you to have a look! 

View a Sampling Silicon Valley Luxury & Estate Homes Online Now!  

Showing properties 1 - 5 of 6. See more 95020 zip code real estate.
(all data current as of 5/23/2012)

1. $4,750,000 : 0 Hecker Pass Rd, Gilroy
   
   4 beds, 4 full baths

   Home size: 4,800 sq ft

   Lot size: 630 sqft
   
2. $3,995,000 : 2400 Heritage Manor Dr, Gilroy
   
   9 beds, 7 full, 1 part baths

   Home size: 6,686 sq ft

   Lot size: 33.22 ac
   
3. $3,199,000 : 2544 Butch Dr, Gilroy
   
   6 beds, 9 full, 1 part baths

   Home size: 10,300 sq ft

   Lot size: 10.21 ac
   
4. $2,399,000 : 1055 Melchoir Ct, Gilroy
   
   4 beds, 4 full, 1 part baths

   Home size: 4,310 sq ft

   Lot size: 18 sqft
   
5. $2,348,000 : 2490 Howell Ln, Gilroy
   
   5 beds, 4 full, 2 part baths

   Home size: 5,190 sq ft

   Lot size: 20.01 ac
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury homes for sale in Los Gatos 

Showing properties 1 - 5 of 48. See more city of Los Gatos real estate.
(all data current as of 5/23/2012)

1. $19,995,000 : 16450 Aztec Ridge Dr, Los Gatos
   
   6 beds, 7 full, 2 part baths

   Home size: 11,257 sq ft

   Lot size: 50 sqft
   
2. $9,500,000 : 16721 Madrone Av, Los Gatos
   
   6 beds, 6 full baths

   Home size: 6,000 sq ft

   Lot size: 21 sqft
   
3. $9,500,000 : 285 Wooded View Dr, Los Gatos
   
   6 beds, 6 full, 1 part baths

   Home size: 7,987 sq ft

   Lot size: 6.25 ac
   
4. $8,900,000 : 16350 Matilija Dr, Los Gatos
   
   3 beds, 3 full, 1 part baths

   Home size: 7,475 sq ft

   Lot size: 1.26 ac
   
5. $8,495,000 : Shannon Rd, Los Gatos
   
   6 beds, 7 full, 2 part baths

   Home size: 6,138 sq ft

   Lot size: 31.53 ac
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury homes for sale in Monte Sereno 

Showing properties 1 - 5 of 6. See more city of Monte Sereno real estate.
(all data current as of 5/23/2012)

1. $4,500,000 : 16036 Greenwood Rd, Monte Sereno
   
   7 beds, 7 full, 1 part baths

   Home size: 7,336 sq ft

   Lot size: 1.17 ac
   
2. $3,999,999 : 18090 Daves Av, Monte Sereno
   
   6 beds, 6 full, 1 part baths

   Home size: 7,000 sq ft

   Lot size: 43,560 sqft
   
3. $3,795,000 : 15449 Banyan Ln, Monte Sereno
   
   5 beds, 4 full, 3 part baths

   Home size: 6,228 sq ft

   Lot size: 36,154 sqft
   
4. $3,588,000 : 16145 Greenwood Rd, Monte Sereno
   
   4 beds, 4 full baths

   Home size: 4,000 sq ft

   Lot size: 33,750 sqft
   
5. $2,295,000 : 15630 Michael Ln, Monte Sereno
   
   5 beds, 4 full, 1 part baths

   Home size: 3,924 sq ft

   Lot size: 9,583 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury homes for sale in Saratoga, CA 

Showing properties 1 - 5 of 46. See more city of Saratoga real estate.
(all data current as of 5/23/2012)

1. $17,500,000 : 22030 Mount Eden Rd, Saratoga
   
   6 beds, 6 full, 2 part baths

   Home size: 13,459 sq ft

   Lot size: 14.00 ac
   
2. $16,750,000 : 21116 Comer Dr, Saratoga
   
   6 beds, 8 full, 3 part baths

   Home size: 12,505 sq ft

   Lot size: 7.88 ac
   
3. $9,988,000 : 13388 Surrey Ln, Saratoga
   
   4 beds, 5 full, 1 part baths

   Home size: 8,500 sq ft

   Lot size: 1.05 ac
   
4. $6,988,000 : 13815 Pierce Rd, Saratoga
   
   6 beds, 5 full, 1 part baths

   Home size: 8,000 sq ft

   Lot size: 1.87 ac
   
5. $6,950,000 : 19730 Glen Una Dr, Saratoga
   
   5 beds, 4 full, 1 part baths

   Home size: 5,461 sq ft

   Lot size: 2.80 ac
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury homes for sale in the Los Gatos Mountains 

Showing properties 1 - 4 of 4. See more city of Los Gatos Mtns real estate.
(all data current as of 5/23/2012)

1. $8,995,000 : 18550 Black Rd, Los Gatos Mtns
   
   5 beds, 8 full baths

   Home size: 18,000 sq ft

   Lot size: 11.09 ac
   
2. $2,999,000 : 18807 Bear Creek Rd, Los Gatos Mtns
   
   2 beds, 2 full baths

   Home size: 1,440 sq ft

   Lot size: 2.65 ac
   
3. $2,999,000 : 18805 Bear Creek Rd, Los Gatos Mtns
   
   4 beds, 2 full baths

   Home size: 1,440 sq ft

   Lot size: 2.65 ac
   
4. $2,250,000 : 21901 Bear Creek Wy, Los Gatos Mtns
   
   4 beds, 3 full, 1 part baths

   Home size: 4,700 sq ft

   Lot size: 7 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury homes for sale in Cupertino 

Showing properties 1 - 5 of 39. See more city of Cupertino real estate.
(all data current as of 5/23/2012)

1. $2,830,000 : 22360 Santa Paula Av, Cupertino
   
   6 beds, 6 full, 1 part baths

   Home size: 5,554 sq ft

   Lot size: 14,374 sqft
   
2. $2,499,000 : 22755 San Juan Rd, Cupertino
   
   5 beds, 4 full, 2 part baths

   Home size: 4,405 sq ft

   Lot size: 13,886 sqft
   
3. $2,495,000 : 11790 Upland Wy, Cupertino
   
   5 beds, 4 full baths

   Home size: 4,578 sq ft

   Lot size: 38,250 sqft
   
4. $2,288,000 : 1248 Weymoth Dr, Cupertino
   
   5 beds, 4 full, 1 part baths

   Home size: 4,942 sq ft

   Lot size: 9,583 sqft
   
5. $1,995,000 : 14025 Montebello Rd, Cupertino
   
   4 beds, 2 full, 2 part baths

   Home size: 4,000 sq ft

   Lot size: 1.85 ac
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury homes for sale in Los Altos 

Showing properties 1 - 5 of 26. See more city of Los Altos real estate.
(all data current as of 5/23/2012)

1. $5,200,000 : 585 Joandra Ct, Los Altos
   
   5 beds, 5 full, 1 part baths

   Home size: 5,427 sq ft

   Lot size: 1.39 ac
   
2. $4,195,000 : 316 Costello Dr, Los Altos
   
   6 beds, 5 full, 1 part baths

   Home size: 4,170 sq ft

   Lot size: 19,205 sqft
   
3. $3,885,000 : 676 Hollingsworth Dr, Los Altos
   
   5 beds, 4 full baths

   Home size: 3,733 sq ft

   Lot size: 13,535 sqft
   
4. $3,798,000 : 175 Coronado Av, Los Altos
   
   5 beds, 3 full, 2 part baths

   Home size: 6,186 sq ft

   Lot size: 16,100 sqft
   
5. $3,650,000 : 330 Yerba Santa Av, Los Altos
   
   5 beds, 4 full, 1 part baths

   Home size: 3,650 sq ft

   Lot size: 14,740 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse luxury homes for sale in Los Altos Hills 

Showing properties 1 - 5 of 49. See more city of Los Altos Hills real estate.
(all data current as of 5/23/2012)

1. $19,500,000 : 28030 Natoma Rd, Los Altos Hills
   
   3 beds, 3 full, 1 part baths

   Home size: 3,984 sq ft

   Lot size: 18.12 ac
   
2. $12,995,000 : 25810 Vinedo Ln, Los Altos Hills
   
   6 beds, 9 full, 2 part baths

   Home size: 12,143 sq ft

   Lot size: 4.04 ac
   
3. $11,250,000 : 25893 W Fremont Rd, Los Altos Hills
   
   5 beds, 5 full, 3 part baths

   Home size: 11,425 sq ft

   Lot size: 43,560 sqft
   
4. $11,189,800 : 24020 Oak Knoll Ci, Los Altos Hills
   
   6 beds, 6 full, 2 part baths

   Home size: 7,100 sq ft

   Lot size: 3.51 ac
   
5. $9,888,888 : 12661 Robleda Rd, Los Altos Hills
   
   6 beds, 6 full, 1 part baths

   Home size: 8,610 sq ft

   Lot size: 1.53 ac
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Luxury home sales remain sluggish in the west valley areas of Santa Clara County. Right now in Almaden Valley, Los Gatos, Monte Sereno and Saratoga, there are over 125 homes for sale listed at more than two million dollars, but in the last month only 6 have sold and closed escrow in those same areas and price ranges.

Today we’ll look at these four Silicon Valley communities and their luxury homes market to see what’s selling and where.

Almaden Valley (San Jose, 95120)

Currently in Almaden there are 11 homes for sale which are listed at or over $2,000,000.  In the last month, zero (0) sold.  That makes for an infinite number of “months of inventory”. It is an extraordinarily deep buyer’s market: great for buyers, a nightmare for sellers of high end homes there.

Will it improve? Probably not soon as there are no houses pending sale in that price range either. There are 55 pending sales in Almaden, but none listed at more than 1.6 mil and the average list price of these pending sales is under 1 mil.

Los Gatos (Town of Los Gatos, 95030, 95032)

Right now there are 49 homes listed in the luxury price point of 2 million or more, and just 2 which have sold & closed in the last month, so there is a 24.5 month supply of inventory.  It’s a very deep buyer’s market in Los Gatos among the most expensive real estate offerings for sale.  What about pending sales?  There are 10 homes in this price range “under contract” – so it is faring a lot better in Los Gatos than in Almaden Valley.

Monte Sereno (City of Monte Sereno, 95030)

In Monte Sereno, a very high end but very small community of only about 4,000 residents, currently there are 23 properties for sale in this upper pricing tier.  None have sold in the last month, so like Almaden, it has an infinite supply of inventory. There’s a little  light at the end of the tunnel, though, as there are two pending sales, both of which fall between 3 and 4 million dollars.

Saratoga (City of Saratoga, 95070)

Saratoga enjoys a good number of estate properties and very high-end real estate.  As of today, there are 43 such homes on the market and 6 sold and closed escrow in the last month.  In Saratoga, the months of inventory is 7.16.  This is a buyer’s market, but the closest to a balanced market of the four areas we’re studying today.  Additionally, there are 12 pending sales in this upper price range.

The average list price of the luxury homes under contract in Saratoga is $3,347,917; the average home size is 4252 & average lot size is 66,902 (about an acre and a half).  The most expensive home which is sale pending is a fabulous home on Fruitvale which was listed at $5,799,000.

Please note: In all of these areas, “the market” will be influenced further by each property’s school district and whether or not it’s a short sale, bank owned property, or regular sale – among other factors.

How can this information help you if you’re are a buyer or seller?

If you are a home owner thinking of selling an estate property, it is a tremendous help to know whether or not there is much demand for the type of home you wish to sell.  If nothing is “moving”, either the whole lot of listings is overpriced (which can happen) or buyers are voting with their feet and choosing another community in which to buy. Sometimes this happens because of schools, other times simply because the lower price ranges make a home purchase in a more exclusive area possible now when it wasn’t as possible before. In any case, if you need to sell in an area where little or nothing is selling, you will have to price your home so attractively that it’s probably painful.

On the other hand, if homes are selling, as is the case in Saratoga, pricing will still be important but you may not have to do the deep pricing cuts that might be required in Almaden right now, for instance.

If you are a home buyer interested in purchasing luxury real estate, you will also benefit from knowing how much competition there is for the type of home you wish to buy.  Right now, you may have an easier time negotiating in Almaden or Monte Sereno rather than in Los Gatos or Saratoga.  Of course it depends entirely on the house you like and whether or not it’s priced right.

Interested in understanding the market a little more? Please contact me for a confidential, no-obligation meeting.

The real estate news is so mixed it’s mind boggling, whether it’s a national perspective, one specific to California, the San Francisco Bay Area, the “south Bay”, Silicon Valley or even San Jose in particular.  It is anything but a uniform, monolithic market. Even so, it’s good to look at the big picture along side the hyper local level, and that’s what we’ll do today.

Today’s San Jose Mercury News featured a front page article by Sue McAllister (an excellent reporter) on Santa Clara County housing values.  She shares that Zillow says that we’ve hit bottom here in Santa Clara County.  That is certainly good news to home owners accross Silicon Valley!  And I don’t disagree that countywide, we’re definitely looking up right now.  No guarantees for the future, but Zillow says that the threat of a second or double dip no longer seems likely. Whew!

Unfortunately, there’s another real risk to this recovery and it’s not the “shadow industry”. This time it’s homeowners walking away because they’re underwater (not because they can’t afford to stay, but because they choose not to).  Sixty Minutes did a segment on this phenomena of home owners walking away last night., which you can watch via this link.

But back to today.  Looking at the big picture, Santa Clara County’s median sales price is up about 5% over a year ago (for both condos and houses). That doesn’t mean that homes have all appreciated 5%, but rather that half of all homes sold for more and half less at a point which is five percent greater than the amount of a year ago.  It does indicate improvement, but most of that is due to more expensive homes which are selling now.

Some areas are “selling like hotcakes” when a good home comes on the market and is priced aggressively.  In those areas, home prices are trending upwards.  The myth is that it’s happening everywhere, in every price range, and in every type of residential real estate for sale.  It’s just not true.

I cannot cover every part of the San Jose area, or every type of home for sale, but will provide a few examples (again) of how terribly local “the real estate market” is.  In some areas it can change block by block! 

What follows are graphs from Altos Research (to which I have a subscription) displaying the median list price of homes for sale in Sunnyvale, Santa Clara and Saratoga – both condominiums & townhouses as well as houses & duet homes.  The historical period shown for all is the last 3 years.

The median list price of Sunnyvale houses for sale.

And the same data in Sunnyvale but by price quartile. Please note how very different the market has been from one price point to the next.  The least expensive homes hit the “bottom” more recently than the most expensive ones – the top quartile had its worst period in the winter of 2008 but the lowest quartile hit it a full year later.

What about condos in Sunnyvale?

Viewed broadly, it does not look like the townhouse or condominium real estate market in Sunnyvale has hit bottom for sure.  We see a tiny uptick at the end – but it’s hardly what you could call “sustained” at this point.

 When we look at the market for Sunnyvale townhomes and condos by price quartile, it appears that the most expensive ones may be trending upward in price.  Are they leading the recovery?  Perhaps.  But we’ll need to see more of this to know for sure.

I think I’ve made my point that real estate is hyper local.  Santa Clara County is clearly in recovery as a whole, but not every part of the market is recovering – some parts are still faring quite badly and are seeing further price declines.  But let’s continue on and have a look at the median list price of Santa Clara homes for sale next.

Santa Clara does not look like a market in recovery or which has hit bottom yet. Maybe – but we need to see the lack of decline continue on a lot longer before we could be comfortable declaring that the worst is over.

Here we can see that the lowest priced homes really do appear to be doing better than the rest of the Santa Clara market.  The bottom middle quartile, though, still appears to be having a slippage in list prices.  This is a much different “picture” than just viewing the Sunnyvale market as a whole.

Condominiums and townhouses for sale in Santa Clara next:

The movement upwards is encouraging, but it started so recently that we’re not yet sure if this is a blip or a new trend. Hoping for the latter.

The newness of the trend is affirmed when we look at the Santa Clara condo market by quartile: mostly what we’re seeing is that the declines have stopped. That is good news, at least!

Finally, let’s see what’s happening in the high end or luxury market of Saratoga. 

What a bumpy market it is in Saratoga!  While it looks like “the worst” was about a year ago, the current downward trend is not comforting.  Is more bad news still ahead?  Let’s see how it looks by quartile.

Now isn’t this odd? It doesn’t look nearly so bad in Saratoga when broken down by quartiles!  The most expensive properties in Saratoga are doing the worst, and the most affordable ones are appreciating, though.    Perhaps a closer look still would help – just the top and bottom price points by themselves.  Here’s a view of the top quartile of the median list price of Saratoga homes for sale.

The luxury or estate market in Saratoga is NOT yet in recovery.  In fact, it is still in decline with no evidence of a recovery even begun yet.

And the bottom?  This chart represents the most affordable single family homes (houses & duet homes) for sale in Saratoga over the last three years.

Anyone shopping in Saratoga (especially in the areas with the very best schools) knows that this is an appreciating market – homes in this strata of the market are going up every month, especially if the home is in good shape and priced right.  Although the recovery there is still rather new, I do believe that this part of the market has seen its bottom and is truly in recovery.

Saratoga condos and townhouses – how’s the market?

The condos and townhouses in Saratoga had a little rally last summer, but then it dropped down lower in the winter and had been rising until recently. Will it look different by quartile?

Here again it looks like the bottom quartile, or most affordable Saratoga condos for sale, is recovering .  The upper price points now appear close to flat but the most expensive ones have been behaving very differently from the rest of the pack since last summer.  Perhaps this was a vote of confidence among those who are comfortable?  The luxury condominium market in Saratoga is more than merely shelter, of course, and most Santa Clara County home buyers cannot fathom purchasing a townhouse or condo over a million dollars, let alone pay the hefty home owner association dues that goes with that lifestyle.

Saratoga CA luxury townhouses and condominiums – median list price of homes for sale (top price quartile):

Summary

Today we had a look at the real estate markets in Sunnyvale, Santa Clara and Saratoga – both houses and condos and in all price points.  We can see that while the whole of Santa Clara County does appear to be past the bottom of the market, there are still some segments of it which are declining in value, and others are rising.  To make the most of your real estate purchase or sale, it is extremely important to understanding what is happening in your part of the market.  Please contact me to chat about buying or selling a home within your area, budget and home type within Silicon Valley.

Beautiful Willow Glen is one of San Jose’s many districts, but it once was a separate town until less than a hundred years ago, when the need for a better sewage system nudged the townfolk to vote in favor of annexation to San Jose.  It maintains a strong & independent identity.

To speak of “the Willow Glen real estate market” is to try to include divergent neighborhoods, school districts, architecture, price points and locations. Below please find a general overview of the market for Willow Glen houses & duet homes as of March 20, 2010. (Numbers from MLSListings.com, crunched by Mary Pope-Handy. Homes listed as “sold” were closed within the last 30 days – as of today.)

The months of inventory indicates that it is a seller’s market in Willow Glen (less than 6 months is the tipping point) overall.  Please note that there’s some variation, though, from one school district to the next.  You’ll also find variation between price points, whether or not the home is distressed, etc.

Schools:  most of Willow Glen belongs to the San Jose Unified School District.  A small section of Willow Glen is a part of the Campbell Union High School District.  (CUHSD has pretty good schools so this area is often prized for that reason.) And a tiny little sliver actually belongs to the East Side Union High School District – very few homes fall into this section so it’s not addressed specifically.

Areas: Willow Glen has many neighborhoods within it, ranging from Palm Haven and north Willow Glen to the Birdlands and the Willows at another and many others inbetween.  There are some areas more prized than others, of course.  Being close to the downtown area (and away from freeways, for instance) can dramatically increase the sales price and marketability of the home.   Certain neighborhoods have more charming architecture, larger trees along the street, wider roads or other plusses that drive their value up.

Price points and selling conditions:  In addition to these factors, we also must consider the price point of the home as well as whether a home is being sold without undue pressure or if it is a distressed sale, that is, a bank owned or short sale.  Regular sales usually sell for more (and buyers know that normally they will be given both disclosures and presale inspections prior to drafting their purchase offer).

In most of Silicon Valley, the “hottest” segment of the market is the most affordable.  For a closer look at this subset of the San Jose real estate market, I have broken it down into major groups, the first one being homes priced below $729,000 (which is close to the “conforming jumbo” loan cutoff).  Below, please notice that there is a significant difference between the months of inventory from one school district to the next as well as one sale type to the next.  In Willow Glen right now, the sweet spot of the market are homes priced under $729,000 and located in the Campbell Union High School District (not San Jose Unified). 

If we look at the next pricing tier of $729,000 to $1,200,000, we see that things cool off considerably. This is true in most of the rest of Santa Clara County, too.  The lowest priced houses are tending to sell the best right now.

In this tier, the months of inventory are much longer overall and in some cases, there have been no recent sales and the prospects are fairly dismal. The odds are improved for this group if the home is a “normal sale”, at least.

And what of the highest priced homes in Willow Glen? This is the toughest market overall.

With an average months of inventory of 10.67 for all school districts or 9.33 months for San Jose Unified, it is a real challenge to get a high end home sold in Willow Glen today. The Willow Glen Luxury home market saw just 3 homes closed last month.  The only way for these homes to sell is to get the price to a painful level for the sellers, unfortunately.  Buyers want a bargain – and they are voting with their feet, deciding that most of what’s on the market in this price point in Willow Glen is overpriced.

It is very important for home sellers to be realistic when pricing their homes.  Setting the offering price where you’d like it to be is not a smart strategy.  If your segment of the market has 10 months of inventory, you have got to seriously undercut the rest of the homes to get yours sold!

Buyers, if you are hoping to scoop up a Willow Glen bargain by finding a short sale or bank owned property, you’d better be ready to act fast if one comes on the market in your price range. As you can see, there aren’t many of them – and they’re selling fast!  You may be able to find a “regular sale” for a bit more – the delta between regular sales and short sales is often 10-20%, depending on a lot of variables.  Even among the regular sales, in the lowest priced houses in this area, they aren’t lasting too long.  The good ones go fast!

If you’d like to have a better understanding of your area within Willow Glen, please call me for a confidential appointment.

Legalese:  this post and content, like all entries on this blog, are copyrighted. Do not copy without my express, written permission.

With fabulous views, exceptionally high ranking schools and beautiful newer construction, the Graystone and Pfeiffer Ranch neighborhoods in San Jose’s Almaden Valley are perennially desireable.

Today I was in the neighborhood and took a photo of Mt. Umunhum from there. 

The neighborhood also enjoys a park along the creek with a playground to enjoy on days with better weather.

Not sure if you’ve been to this scenic part of San Jose’s Almaden Valley?  Here’s where to find it (this is where I took today’s picture):

View Larger Map

Silicon Valley features a number of upscale communities that enjoy beautiful estate properties. These luxury homes are not simply large houses, but rather they boast qualities generally not seen in regular residential real estate.

What makes a house a “luxury home”?

A luxury property in Santa Clara County often includes a number of elements that set it apart, such as:

• price tag: these homes usually sell for more than three or five million dollars (and may be $10 or $20 million or more)
• more than an acre or two of land
• house larger than 4000 or 5000 sf
• the inclusion of “out buildings” such as a guest cottage, gatehouse, etc.
• views (valley, hill, acreage) or special features of the land (waterfront, riverfront adjacent), a vineyard, or something else special and uniquely beautiful
• amenities such as a pool, tennis court, racquetball court, gym, sports court or facilities for enjoying other sports & exercise on site
• specialized hobby or relaxation rooms, as in a darkroom, library, workshop, conservatory
• entertainment centers not commonly found in private homes, like a ballroom, dedicated home theater room for movie viewing, pool or billiards and “game room”, and ice cream parlor
• safety tools such as a video survelliance system, electronic gates

The (main) house itself is qualitatively different too.

Kitchens tend to be the most important room for San Jose area home buyers of all price ranges, and this includes homes that cost upwards of ten million dollars. Usually, kitchens in these homes are designed with a very clear purpose in mind and are done beautifully, though recently in Los Gatos I saw a home listed for about ten million with a kitchen that needs to be completely remodeled. This is very unusual, though.

Most luxury homes features kitchens of one extreme or the other. On the one hand, it may be more industrial in nature if those cooking in it are primarily professional chefs, domestic employees or catering services rather than the homeowner. This is not the kitchen of glossy magazines, it’s not meant to impress anyone for all the maple cabinets, stainless steel appliances and granite countertops. This sort of kitchen is functional, not gorgeous, and it may have stainless steel countertops, for instance, alongside the giant gas range. Such a kitchen is usually separate from the living areas and the guests are not expected to visit this part of the home.

Far more commonly found in Silicon Valley is the other end of the spectrum, the kitchen where residents spend most of their time, and it’s meant to impress. Here we see high end materials and appliances in a room viewed as much as art as the meals created in it are. This type of kitchen is often the focal point of today’s upscale or luxury home. The home’s floorplan is “open” to the kitchen – often the kitchen and family room blend together as part of a Great Room. This is a kitchen designed for owners who cook, not those who have servants.

Luxury kitchens in most luxury homes include:

• a large, professional grade oven and stove
• two regular ovens plus a built in microwave
• maple or cherry cabinets, some with glass doors to showcase artistic pieces
• slab granite (or other slab material) countertops (sometimes stainless or concrete)
• an island with vegetable sink and disposal
• two or more dishwashers
• a butler’s pantry, often with a dishwasher and sink area for dishes and cutlery, which are stored in the bulter’s pantry and not in the kitchen itself
• sometimes other appliances and tools such as a built-in espresso machine (trash compactors are not so much in favor today but may still be found)
• special lighting, often imported, plus spotlights and under the cabinet lighting

Very often there’s an elegant breakfast room, often with windows on three or more sides, or nook and a place for stools to sit up close to the counter, frequently at the island but not always.

A formal dining room is to be expected in the ultra expensive, multi-million dollar home. Recently, though, I toured a home in Saratoga listed over five million dollars that was newly constructed and missing a dining room! Apparently the builder thought a corner of the living room or family room could be dedicated to formal dining, but I thought that this was a terrible oversight. Many high end homes feature large dining rooms that can seat 10 or 14 at one table, or in some cases host two tables with a half dozen or more at each. Truly elegant dining rooms will also include a fireplace as well.

I won’t do a room by room analysis, but there are many more features commonly found in expensive, estate properties. If the home is traditional, you can expect lots of crown molding and baseboard, exquisite light fixtures, and built ins. Most styles of luxury homes will include beautiful stone floors, elaborate electronics systems, pools, large master baths with soaking tubs and two-person showers.  There are many more amenities can all be hallmarks of fine homes and estates.

Sometimes, people go a little too far in an effort to appear ultra elegant. Usually it’s something overdone, like too many Greek statues or other improvements that may be “over the top”, such as the use of too much black marble, too many chandaliers, or too much gold paint worked into a ceiling or fireplace mantle. These things are easy to fix and to personalize the home so it’s more appropriate, so don’t let the finishing work be a put-off. (Of note to me in the “over the top” category was seeing diamonds built into bathroom fixtures in one Monte Sereno home. What were they thinking?)

Even in homes with a high price tag, it’s always important to carefully examine not just the general condition of the home, but the specifics. Sometimes, despite the acreage or square footage and apparently expensive construction, homes are not always well built – all builders are not the same. It is important to use due dilligence and look at the craftsmanship, simple things like grading and drainage, to make sure that the home is built not just to look good today, but to last into the future. Always, always get a home you wish to purchase thoroughly inspected. And if you own a lovely estate property, get it inspected periodically to maintain your property and prevent expensive problems such as foundation cracking and dry rot.

Where are the high end homes of Santa Clara County found?  Luxury homes are primarily found near the foothills (but not exclusively so) in the communities of Los Gatos, Saratoga, Monte Sereno, Almaden Valley, Cupertino, Los Altos, Los Altos Hills, Palo Alto, Silver Creek and a few other areas. There are some luxurious pockets on the valley floor, too, in areas such as San Jose’s Rose Garden or Naglee Park. If you are relocating to Silicon Valley and are looking for a luxury property, you won’t be disappointed at the varied selection of options here!

The post below was published in November of 2009. For a more current look at the Monte Sereno real estate market, please see:

The Monte Sereno Real Estate Market

The Monte Sereno real estate market is trickier than most Silicon Valley markets to gauge because it’s so tiny.  With just four thousand residents, there simply aren’t that many homes for sale in Monte Sereno at any given time and there are even fewer solds.

Monte Sereno Real Estate Trends at a Glance

The info below is from my Silicon Valley REReport, which comes out monthly. Click on the link to see the full report on October’s home sales activity in Monte Sereno.

Home Values in Monte Sereno

Sellers often want to know, perhaps more than anything, what is happening to home values. “What’s my house worth?” is a perennial question because the answer can change from month to month.  Buyers want to know what any particular property should be worth – and often do not see eye to eye with sellers on this point.  Hence, few homes go into escrow (or under contract) each month. (The months supply of inventory has averaged 19 months in MS this year – more on that below – which indicates that there’s a bit of a standoff between buyers and sellers. Buyers aren’t buying in the vast majority of cases.)

Valuation is difficult to pinpoint if we only look at the closed sales of homes in Monte Sereno because there are not a lot of them.  The number of closed sales per month in 2009 has ranged from one to five, the average is 2.3.  In October there was only one sale. So when preparing a competitive market analysis for potential clients, I would consider a both list prices and sold prices in Monte Sereno as well as broader base of information, including what’s happening in Los Gatos in the part where homes have the same school district (and adjusting up a bit since Monte Sereno homes sell for a little more than Los Gatos homes do).  I might also have a look at the Saratoga market, since there’s a possible overlap there (buyers looking at Saratoga may also consider Monte Sereno). If you just look at the average data for a particular month and in that month just one home sold & closed escrow, your understanding of the market may be seriously off base. More info is needed.

So, too, in terms of understanding the speed with which a home might sell or any other question pertaining to listing and selling a home – it’s a good idea to also see what’s happening in neighboring Los Gatos and Saratoga.

In this post, then, we’ll consider what’s happening in Monte Sereno specifically (with both listed and sold data) but also cast a wider view into Los Gatos (95030) and Saratoga (95070) since these two markets are similar in terms of location, pricing and schools and tend to appeal to the same buyer pool, generally.  A Monte Sereno home for sale is likely competing with homes in the same school district in Los Gatos and possibly also homes in Saratoga.

(1) List prices of Monte Sereno Homes for Sale

Below please see an Altos Chart (used with permission – I have a subscription) displaying the median list price of homes for sale in Monte Sereno, all prices combined. (Altos uses list price data, not sold price.)

It is interesting to see the low point was in May or June.  In less expensive markets like Cambrian Park, that low point was in about February or March of this year.  The high end markets have been slower to feel the impact of the market decline, so the ripples are all a bit after the more affordable areas.

Next, see the median list price broken down by quartile:

It is interesting to note that the higher priced homes seem to be rising which the least expensive homes have fallen in terms of list price.  This is contrary to what is happening in “starter home” neighborhoods.

To get some grounding with a larger pool, here’s the Monte Sereno median list price as compared to the median list price of Los Gatos in the 95030 zip code (which is almost exclusively in the same school district) and also Saratoga (which has several school districts).

The market’s been a lot tougher in Los Gatos than in either Monte Sereno or Saratoga!  Saratoga is beyond the bargain pricing of a few months ago – homebuyers interested in Saratoga have found that out first hand.

(2) What about the data for sold homes in Monte Sereno?

For this I went to our MLS provider, MLSListings.com and ran the statistics myself.  Here’s a summary of the year to date listing and sales information for Monte Sereno, January through October 2009.

As you can see, there ae very few closed sales each month, which is why it’s important to always view both neighboring communities and the activity with list prices.

Of the 25 solds in Monte Sereno so far in 2009, the range has been from $845,000 to $4,250,000, with the majority of homes selling between 1 and 2 million dollars.  Here’s the breakdown:

Under $1 million: 3
Between $1 and $2 million: 14
Between $2 and $3 million: 4
Between $3 and $4 million: 2
Between $4 and $2.25 million: 2

Of the 25 sold and closed homes in Monte Sereno, two were banked owned properties (REOs). None were short sales.

There are three pending sales in Monte Sereno as of right now, with the appx list prices of $1.8 mil, $2.4 mil and $8 mil (the biggest sale in MS in a very long time).

Back to the question of home values: have homes gotten less expensive for buyers in Monte Sereno? Are sellers getting less money for their houses then they did a year ago.

Yes.

On our MLS, I ran the sold houses in Monte Sereno which closed from the first of the year through the 12th of November both for 2008 and 2009 in which the closed sales price was between $1 million and $2 million (since that’s where most of the homes are selling and it is a large group, less susceptible to swings in pricing from an oddly high sale now and then).

In 2008, the average sales price for this range was $1,641 with an average home square footage of c. 2490 (2489.73 if you’re splitting hairs). Price per SF =$659.11

In 2009, the average sales price for this range was $1,625,829.07 with an average SF of c. 2677 (2676.64). Price per SF = $607.41.

Buyers are paying an average of $51.70 per SF now as compared a year ago, which is 7-8% less.  Given that some areas are seeing cataclysmic price drops, this is not a huge adjustment, but it is significant.  If you are trying to sell your Monte Sereno home based on last year’s home values, you may be off by 5 – 10% (allowing for a margin of error). To get your home into the small percentage which is selling, it’s important to price correctly (and most Realtors will tell you that the number one problem causing homes to remain unsold is not marketing, but above-market pricing…the best marketing in the world cannot help on overpriced home to sell).

Buyers, find your desired home and make a reasonable offer based on current market conditions.  If the home is owned by must-sell (rather than “will sell if I get my price”) sellers, you may find that your offer is accepted or at least countered into a reasonable range.  Though most homes sell fairly close to list price, they don’t all. And remember, an offer is just an invitation to do business, and you won’t be able to buy if you never write the offer.

(3) Competition, Inventory and Sales of Homes in Monte Sereno

Throughout 2009, there have been anywhere from 22 to 34 Monte Sereno homes for sale (active, available) at any given time – the average for 2009 so far is 28.5. The “months supply of inventory” for Monte Sereno as a whole has varied in 2009 from a low of 5 months to a high of 36, the average being 19 months supply.  But some homes are selling, some of them quickly.  In October, the one home that did close escrow had sold in just 9 days.  The good homes tend to sell quickly, which is a joy for ready sellers but not so good news for slow buyers.  Each home is unique, so don’t assume that your desired home will be on the market for four months due to a misunderstanding of the average days on market data – it may or may not linger while you decide!

Inventory is down in Monte Sereno, as it is in much of Santa Clara County.  Would-be homebuyers lament, “there’s nothing on the market”.

A comparison of Monte Sereno inventory with Los Gatos, 95030 and Saratoga, CA (95070):

Again, Saratoga’s inventory has really fallen compared to the others.  It has risen in Los Gatos, which has the worst market for sellers of the three areas. Monte sereno has stayed relatively constant in terms of inventory.

As of this moment, there are 19 homes listed for sale and actively available in Monte Sereno. These properties vary tremendously in house size, acreage, and quality – ranging from modest ranch homes to equisite estates and luxury properties.  The “averages” of these houses: 251 days on the market, 4198 SF, 1 acre lot, list price $3,060,726.  Viewing just the $1 – $2 million range, there are 6 Monte Sereno homes for sale, and the averages are: 152 DOM, 2882 SF, appx half acre, list price $632.54 SF and list price $1,670,633.  These prices are close to the sold data from earlier this year ($607 per SF sold price was $635/SF list price).  But with 152 days on the market on average, that means that some or most of these homes aren’t keeping current with market trends (or possibly other problems such as too many showing restrictions, not enough photos on the MLS, a discouragingly low commission rate to buyer’s agent or a host of other potential issues – but usually it’s about the price).

(4) Monte Sereno Homes: Days on the Market

Some properties were expired listings and then relisted with other agents, with a new marketing plan and new price, but may still reflect the entire listing history (this is the case with my sold listing on Francesca Court earlier this year – I got it sold in 18 days but the MLS shows it as 244 days since it was on the market with another agent before I was hired).  The official DOM is often not a good indicator for this reason.  When homes are well priced, in good shape and well marketed they often sell within a month in most price ranges and areas within Monte Sereno.

Disclaimers aside, here’s the chart for the average days on market for all quartiles combined in MS:

And broken down by price quartile – as you can see, there’s quite a bit of variation as the market is not a unified block, but is stratified:

The highest priced homes fared badly in summer but are selling amazingly well, while the lower-middle quartile has suffered the worst.

Combined Monte Sereno, Los Gatos 95030 and Saratoga 95070:

Monte Sereno has far longer days on market than the two competitors of these three high end markets.  What gives?  It may be about the schools – Monte Sereno has Los Gatos Schools, which are very good but not as highly rated as Saratoga Schools, but MS sells for more than the same home in Los Gatos with the same schools. There’s a lot of competition for homes in Saratoga with either Saratoga or Cupertino (but not Campbell, so much) schools. Then again, it may be skewed because of the very small amount of data – “statistically insignificant” – unless your home is the one that’s not selling.

Want or need to sell your home? Look hard at the current competition and realize that maybe 10 or 20% of all homes will sell at best this month. What needs to happen to get your home into the pending sales group?  Ask your agent and then be open to the truth. Sometimes clients don’t want to hear something unpleasant.  I once had a potential client tell me, “this is what I want to list the home for, and I want to hear your enthusiasm for my price!”  It was an invitation to lie, which I won’t – and didn’t – do.  Agents don’t control the market.  If there are “better deals” than your home, then those will be the homes that sell.

Sometimes offering great terms can help improve your price. Like what? Terms such as carrying back all or part of the mortgage.  This does entail risk so be very careful here, but given that jumbo financing is hard to come by now, this might be exactly the way to proceed if you do not need cash out of your home immediately.  Also a possibility is a lease-to-own option. Go over these and other “terms” with your Realtor to see what you can do to maximize your net in today’s market.

Interested in buying a Monte Sereno (or nearby) home? Please contact me today!

If you’d like to speak with me about selling your home, I’d be glad to do a no obligation initial consultation, and provide you a copy of my book at the same time, “Get The Best Deal When Selling Your Home In Silicon Valley“.

More information online:

More links on home selling – on popehandy.com
More links on home buying – on popehandy.com

The Monte Sereno real estate market tends to be a good indicator of the high end market throughout Siicon Valley or Santa Clara County. While it may not be exactly the same in Los Altos, Los Altos Hills, Almaden or Saratoga/Los Gatos, it’s often very similar.

Homes at the high end of the price range have taken a beating in the downturn, as would-be buyers – mostly “move up” home buyers – haven’t got enough equity to purchase the next home.  Many are running into problems getting financing too. So without a large amount of money to put down, it’s very difficult for even willing buyers to make the purchase.

Prices have been dropping in Monte Sereno, as they have been dropping everywhere in the San Jose area.  Although we aren’t seeing the deep discounting here that we see in Alum Rock (where most of the houses bought are distressed properties, either short sales or bank owned homes), the rollback in pricing is still painful for home sellers, especially if they were counting on that money for retirement.

Let’s first look at the recent historical data on list prices in Monte Sereno (graphs courtesy of Altos Research, with which I have a subscription). First here’s a view of the median list price of all houses offered for sale in Monte Sereno in recent years:

Now, the asking prices in Monte Sereno in recent years broken out by quartile (each segment is 25% of the inventory):

The highest priced homes have shown the most volatility, as you can see by the swings in the top line.  That could be a statistical abberation since each quartile represents very, very few homes.

Next, a shorter time frame for a closer-in view.  Monte Sereno list prices by quartile over the last year:

Interestingly, in the above chart it appears that there’s a “levelling off” happening with pricing.  Are we at or near the bottom for those price points? Maybe so.

Now, Monte Sereno list prices with all quartiles combined and overall trend shown for last 180 days (last 6 months):

The dropoff looks like it came from the Giant Dipper roller coaster at Santa Cruz after a nearly 20% drop, but please note that at the tail end, there is an upswing. It appears that the lowest point may have been around May 1st.  Finally, the same quartile breakdown over just the most recent 90 days.

List prices among Monte Sereno houses appear to have stopped declining and are rising slightly in the lowest price ranges.  In the more expensive ranges, which really are more luxury properties than simply homes, the declines continue.

What about days on market and inventory?

A view of all Monte Sereno days on market for listed homes in recent years:

Next, just the last year of DOM among Monte Sereno houses for sale with it broken down by quartile:

The first quartile (black line) represents luxury homes. A year ago, it was difficult to sell the most expensive Monte Sereno properties, but now it is far, far worse – the days on market for luxury homes in Monte Sereno has approximately quadrupled from a year ago for these home sellers! (If you are in the market for an estate property, this is a great time to act as it is a very strong buyer’s market.)

At the other end of the spectrum, the least expensive homes in Monte Sereno also have worsened for days on market, but are selling in about 1/3 the time of the higher priced real estate.

Inventory (in MS and everywhere else in Silicon Valley) is often lowest in December and January, and a quick look at the chart below reveals that the inventory”dips” usually coincide with late December/early January.

Here’s the one-year view: in recent months, the best time to sell was in Feb-April, when there was the least amount of comptetion.

By quartile, same time frame – apparently the timing was about the same for all residential real estate in Monte Sereno – the patterns are almost identical:

It does appear that the dramatic climb in inventory that happened from March to June is levelling off, though.

Days on market are continuing to rise in this small city, but some of the lower price points are no longer dropping and the inventory is no longer rising in Monte Sereno.  The indicators are a little mixed, but in the lowest two quartiles, at least, it looks as though the worst is behind us and perhaps a recovery is underway.    This is what we are seeing in the markets across Silicon Valley, generally – the lowest priced homes are recovering the best and have stopped dropping in price, while the higher priced homes are selling more sluggishly.

It’s stil a great time to buy in all price ranges of Monte Sereno, and it’s still a challenging market to sell – it remains a buyer’s market. Even so, it does appear that things are beginning to shift.

As of today, there are nineteen condominiums and townhomes for sale, and just one pending sale, in the upscale Silicon Valley city of Saratoga, CA.

Homeowners are used to buyers stretching to buy homes their corner of Santa Clara County.  It’s a highly desirable place to live, with great schools, low crime, scenic beauty, character, history, and community involvement.

Right now, though, the hottest segment of the Silicon Valley real estate market is the lower priced single family home market.  Conversely, the coolest part part of the market is the luxury condo market, that is, condominums and townhouses in expensive areas like Los Altos, Cupertino, Saratoga, Los Gatos and Almaden Valley. Put directly, homebuyers with a  four or five hundred thousand dollar budget can purchase a single family home in San Jose for the same amount that a condo would cost in Saratoga.   The selling challenge appears to be even more acute as the price point rises.  It has been several months since a million dollar towhnouse in Saratoga has sold.

A good tool for understanding  the market condition is the rate of absorption, which factors in current inventory levels with sales. The question being answered is this: if no new homes were to come on the market, how long would it take for the current inventory to be absorbed if sales continue at the current rate?  (It can be viewed as days, weeks, or months of inventory.)  For example,  if there are one hundred homes for sale and twenty of them sell in a month, there’s a five month supply of inventory, or five “months of inventory”.

If there are under six months of inventory, it’s considered a sellers’ market. Six months is neutral. More than six is a buyers’ market. Obviously, the higher that number goes, the more extreme the market gets into the buyers’ favor.

Right now, it’s quite acute.

For the last two months in Saratoga, there have been NO closed sales among condos and townhomes. None.  This is almost a total market rejection by consumers – they don’t want what is offered at the prices offered. So the months of inventory would be infinite – if we could graph that. This chart doesn’t do well with intangibles like that, so I’ve plugged in in as if there were one sale in January and February – but there were not. So please envision the last two months as having bars that continue through the top of the chart.  Here’s how the history of the months of inventory in Saratoga look when put into a graph (March 2001 is missing data):

The numbers are from MLSListings, our mls provider. I did the crunching to get the absorption rate. The information for March 2001 was missing on MLSListings.com for some reason – so you’ll see a gap in the chart where that info belongs.

What’s happening with prices? The peak of pricing was about two years ago, and prices have been dropping since then – if slightly at first, it’s more dramatic now. This has been a very deep correction, and prices have “rolled back” in time a number of years.  For some properties, it’s only to about 2005 or 2006. For others, it’s between 2002 and 2004 prices. Since no condos have closed recently in Saratoga, it’s hard to pin the “rollback year” down. It is, however, clear that buyers don’t like the list prices of the homes for sale – if they did, they’d be buying.

When will it recover? It’s hard to say.  This correction has been deep and it may take a few years to see a recovery.  Buyers will need to feel confident in their jobs, particularly in purchasing a luxury condominium.  I would not expect to see peak prices again for another five years or so, possibly more.