The annual market report is out at popehandy.REReport.com and we can now learn how 2011 compared to 2010.  The median sales price for houses in Santa Clara County was off 5.3% overall.  But from one part of the valley to the next it varied wildly with 6 cities or areas finding themselves in positive territory while others were off by double digits.

In the image to the left, I’ve put into bold the cities where the median sales price of houses which sold and closed escrow in 2011 were ahead of 2010′s pricing.

What is it that makes Gilroy, Los Altos Hills, Los Gatos, Mountain View and Palo Alto “in the black”?

Most of these cities/towns are upscale, west valley communities.  But so are Saratoga, Cupertino, and Monte Sereno.

Gilroy was especially hard-hit with the housing downturn so perhaps in that case, it’s just coming back into more of a balance. (Then again, so was Morgan Hill and it’s still off by 12%.)

The LinkedIn IPO and others in the Palo Alto area drove prices up for some parts of the housing market nearby and it’s likely that this explains the positive growth for Palo Alto, Mountain View, and Los Altos Hills.  That said, it would seem that Los Altos, and perhaps even Sunnyvale would have seen stronger numbers on the same account.  Perhaps school scores are the key driver here.

Los Gatos, Saratoga and Monte Sereno often behave somewhat similarly as they are adjacent to one another and often attract similar home buyers who want good schools, a nice downtown area nearby and scenic beauty with the hills.  The annual numbers show Monte Sereno down 6.7%, Saratoga down 2% but Los Gatos up 6.4%.  With Monte Sereno, there are very few sales each month and each year (only about 4,000 residents), so there can be a wider swing without it necessarily being accurate. Saratoga and Los Gatos each have about 30,000 people who call these areas home, though, so the data is much more helpful.  Saratoga and Los Gatos both have multiple school districts, views, homes with better proximity to “downtown” and more variables – I think we’d have to dig a lot deeper to learn why these two neighboring markets are so diverse.  We might also have to look at multiple years of data to see if Saratoga spiked while LG slumped to explain the difference. (more…)

If you arrived into Silicon Valley via Highway 101, driving south from San Francisco, you might believe that the Santa Clara Valley, the San Jose area and Silicon Valley as a whole has got to seem to be the ugliest place on earth. Although heavily traveled, that is not the “scenic route”.

So, too, if you are looking for a place to live and are groping to find a place that is reasonably priced, fairly safe and not a terrible commute distance. You might not even have “is nice looking” on your wish list. You might not think it’s possible if all you ever see are the ugly concrete tilt-up buildings in north San Jose, Santa Clara, Alviso, or anywhere along the 237 corridor.  That area is an architectural wasteland.

Let me assure you: there are a lot of beautiful places in Silicon Valley where you can rent or buy a home. But how do you find them? It helps a lot to have a local give you a few pointers.  I’ll give you some tips today on finding a scenic place to live.

Hills – An easy way to find a scenic location to make your home is to settle near the hills, especially those in the west valley (the Santa Cruz Mountains or the Coastal Range) as they are green year-round. Communities at the base of the west valley foothills include, in Santa Clara County, Palo Alto, Los Altos, Los Altos Hills, Cupertino, Saratoga, Monte Sereno, Los Gatos, and the Almaden Valley area of San Jose. All of these areas are adjacent to the hills or mountains and offer far better than average schools (many of them qualify as great – compare costs between these areas). (more…)

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

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On Sunday afternoon I found myself showing property just beyond the Santa Clara County border near Skyline Boulevard (Hwy 35) and Congress Springs Road (aka Big Basin Way or Hwy 9) in the hills over Saratoga.  The valley floor was fogged in and damp, but up at the crest of the Santa Cruz Mountains, the sun was warm and shining beautifully.

I waited for my clients at our meeting place, the large parking lot off Skyline.  They were running late so I meandered around, taking in the scenery, snapping some photos and enjoying the warmth of the sun.   One delay grew into another and with more time on my hands, I wandered over to the Mr. Mustard hot dog stand and bought myself some lunch: $2 for a hot dog, $1 for a can of Diet Coke. (Also offered were hot links.)  Good price, good food!

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Today we’ll check in with the Los Gatos real estate market, the Monte Sereno real estate market and the Los Gatos Mountains real estate market using Altos Research graphs with a view to the Median List Price of houses for sale.

An overview of the Real Estate Market in the Los Gatos area by viewing the Median List Price of houses for sale

In the graph below, please find the median list price for four areas: Monte Sereno, Los Gatos 95033 (the mountains), Los Gatos 95032 and Los Gatos 95030 (“in town”).

Monte Sereno is the most expensive of these four areas and it’s having some trouble overall. How’s it faring by price quartile? Let’s view that next, then the mountains and “in town” areas of Los Gatos.
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Since early July, fire danger signs have been out at Belgatos Park in Los Gatos (and I suspect at other parks throughout Santa Clara County too). To the right is the sign at the park’s main entrance.  It admonishes the visitors:

“High Fire Danger  No Smoking No BBQs”

To anyone who’s lived in Silicon Valley long, this is understood – the fire danger is quite high here in summer.  Unlike most of the east coast, it does not rain here in summer (at least not often and not much), and our green grasses and plants of spring turn to kindling very quickly.  One stray match, hot cigarette butt or one illegal firework can smolder into a flame which grows fast with the smallest amount of wind to destroy property, animal life and potentially human life, make breathing bad for days and leave a scar on the land.

This sign at the entrance may not feel very compelling to some as the lush green grass in the background would seem to contraindicate restraint.  But venture to the park’s side entrance on Bacigalupi Drive (or hike up the trails) and you’ll understand immediately why this is nothing to take lightly.

Except for one little tuft of partially green grass, “cardboard hill” is entirely dry. So is the rest of this beautiful open space.

If you live close to or have open space in San Jose’s Alum Rock, Almaden, or other east foothill areas or the west valley places like Los Gatos, Monte Sereno, Sartoga, Cupertino or anywhere the foothills, your property is likely considered to be in a high risk fire hazard zone. If so, each year you are mailed information from Cal Fire reminding you of your obligation to provide clearance around your home and to cut down the dead brush.

Just outside of the main entrance to the park there’s a large and open lot which has a few trees, some prickly pear, and a lot of grasses and weeds in winter and spring.  (It also had a rattlesnake it in by the prickly pear when my daughter walked past with our dog one day a month or two ago.) Below is a pan of two pics I took with my Blackberry and later stitched together – the park entrance is out of sight but is a little to the left of this photo.

These owners have done as needed and disked the field to help prevent fires or the spread of fires.

There are things you can do to “harden” your own home is you live near open space – that is, to make it more resistant to fire. Check out the whole list on the Cal Fire site, “Ready For Wildfire“.

How’s the move-up real estate market in the west valley areas of Silicon Valley?  Today we’ll have a glance at the segment of the realty market (for houses for sale, not condos or townhomes) with list prices between $800,000 and $1,200,000 in Almaden, Cambrian, Los Gatos/Monte Sereno, Saratoga, the LG Mountains, Cupertino and Campbell.  (Monte Sereno has very few properties in this price range so it wasn’t helpful to break it out separately.)We will look at a few of the statistics for the area as a whole, but look at the absorption rate or months of inventory area by area.

Recent sales: In all of these areas combined, there were 146 houses or duet homes which have closed escrow (sold & closed) in the last 30 days.  Only 4% total were short sales (2%) or bank owned property sales (another 2%).  Bargain hunters trying to scoop up one of these be aware: it’s slim pickings!

Of the 146 houses sold, ten of them went “all cash”, all but one of the rest were “conventional” (could mean any range of downpayments but a regular loan) and one was listed as “other” so it could have been owner financing. None, of course, were FHA backed financing – the limits are too high for that.

For all areas combined, the average list price to sales price was 99.68%.   Lots of variation from one area to the next, though, just as with the absorption rate or MOI, which is covered below. Cupertino’s ratio was 102.34%, while  in Campbell it was 95%.

Absorption rate or months of inventory: It varies on the school district, price point, home type and home sale type (distressed vs regular sale).  For example, in Almaden Valley right now, overall it is a strong seller’s market – prices are rising, especially in the lower price points, and the months of inventory is a very brisk 1.8 (6 is said to be “balanced”, more than 6 is a buyer’s market and less than 6 is a seller’s market). Short sales are at 2.6 months of inventory overall.  But look at homes selling between 1.2 mil and 2 million and it’s a different story: in that part of the market it’s 5.8 months of inventory – almost “balanced”.

Here’s how they stack up for months of inventory:

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