What’s the Silicon Valley real estate market doing? Silicon Valley is composed of many micro markets, and they may all behave independently of one another, but we are seeing some general trends.We’ll have a look at them today.  Things have really, really changed from six months ago. It’s very dramatic.

First, a city by city comparison of the numbers for the county and Campbell, Cupertino, Los Gatos, Saratoga, San Jose (as a whole), Sunnyvale, etc. This first chart is for houses in the cities and towns of Santa Clara County. On the first line, which is for the entire county, please notice the sales price to list price ration – it is over 100%.  This is perhaps the best indicator of the market heat we see here.  Also note how low inventory is for the county – from a year ago, it’s off 29.2% (and that year was low also).

Santa Clara County residential real estate statistics by city for single family homes March 2012

Perhaps not surprisingly, the sales price to list price ratio is highest in Palo Alto, where it was nearly 109%. Mountain View came in at 103%, Cupertino and Los Altos at 102%, Los Gatos, San Jose and Sunnyvale at a little over 100%.  Some areas, such as Monte Sereno, have so few sales that their numbers fluctuate wildly (in the case of Monte Sereno, best to look to similar areas of Los Gatos for the best sense of pricing, usually, as they share schools, parks, police etc.).

Next, the same type of data but for condominiums and townhouses rather than houses & duet homes:

Santa Clara County residential real estate statistics by city for condos & townhomes March 2012

The condo market has been taking a beating for years, but at long last, the sales price to list price ratio is now very close to 100% (99.9% for the county) and many areas are more than 100%: Campbell, Cupertino, Los Altos, Milpitas, Mountain View, and Palo Alto. Most of the rest of the county is at 99% with just a couple of exceptions.  What’s happening? The inventory here tells the story: county wide, it’s down 74% from last year.  In Campbell and Los Altos it’s off 75%.

Inventory is at record lows, buyer demand is way up: we have a strong sellers’ market with multiple offers and overbids

First, there’s extremely low inventory. In February there were just 1389 single family homes for sale in Santa Clara County.  A balanced market is somewhere around 3000 homes – so this is quite severe!  In fact, it’s the lowest amount of inventory for any February going back 10 years.  Here’s what it has looked like in other Februarys, per my Santa Clara County Real Estate Report (you can see these numbers yourselves):

2012  1389
2011  1812
2010  1739
2009  5443
2008  5338
2007  2876
2006  2235
2005  1412
2004  1672
2003  3410
2002  1965
2001  1784

Prices are moving up

Second, prices have started to climb in much of San Jose and other areas, especially in cities or towns with really good public schools like Cupertino and Palo Alto.  Talk of triple or other “dips” is long gone. Looks like 2009 was our low point for pricing, and since then we’ve been bouncing along the bottom – until now.

How do we know that they are rising? For those of us who are in the market, we are seeing it each time we have a listing that gets multiple offers and sells so high that we know that we have an “appraisal problem” or when we put offers out for buyers that are over list price with great terms but we lose out to a bidder who’s all cash and $100,000 over the list price, where there are NO comps to support it.  And that is what is happening right now in many areas and price points.

Also, of course, we can do the math.  I’ve been crunching numbers on what’s happening in Cupertino (insanely fast rising prices), Saratoga, Los Gatos, Campbell, Almaden, Cambrian, Willow Glen, Santa Clara and more  – all with rising prices very noticeably but not 10% per month, which appears to be what’s happening in Cupertino.

Other things are at play, too – unemployment is better, Apple stock is trading at $600 per share, and of course, there are IPOs happening on the Peninsula and in the South Bay.

How is this different from the seller’s market we’ve been in for the last few years?

It is true that it’s been a seller’s market for awhile here, but it was a seller’s market with soft or even falling prices.  Buyers were willing to buy as long as the prices were so low that they hurt.

Now the shoe is on the other foot.  Almost overnight, it went from a seller’s market with soft pricing to a seller’s market with rising prices, and in some areas such as 95129 with Cupertino schools, it’s dramatically rising prices.  Really not the same thing, though the following chart might mislead you into a complacent sense that nothing has really changed.  That would be a mistake.

Every market is good for someone. Right now, it’s good for sellers, especially if they are selling and moving out of the area. But many sellers continue to wait, hoping that in a year they will sell for much more.  They may well be right.  Meanwhile, the dire shortage of inventory combined with buyers who’ve been sitting  on the sidelines for years waiting for prices to quit falling have all jumped in at once.  It’s been like this before – it was like this in the late 80s when Jim & I were trying to buy our first home, and a decade later when we did our move up.  We saw craziness in 2000 and again in 2006-2007.

The risk, of course, is that in this overheated market, what we really have is another bubble.  It’s certainly possible but one never knows when it’s happening if that’s the case or not.   To those sellers who want to wait, please understand that this can be a risky game. It’s very hard to time the exact top or bottom of the market.  If you are ready to move, analyze everything.  What you hope may be the sales price in a year may or may not be there.  It could be better than today, it could be worse.  My sense is that it is likely to be better but we don’t ever know what’s around the corner.  If you are thinking of selling now, the opportunity is fantastic.  Call or me if you’d like to discuss your plans and hopes.  I’ve been selling homes since February of 1993 and know the ups and downs of the market in Silicon Valley.

Mary Pope-Handy, Realtor

Working with home sellers and buyers in Santa Clara County
and focusing on the “West Valley” areas of Los Gatos, Almaden, Cambrian, Saratoga, Willow Glen, Campbell, Cupertino, Monte Sereno, Santa Clara, and other parts of San Jose and the rest of Silicon Valley

Sereno Group
408 204-7673
mary (at) popehandy (dot) com

Historic Naglee Park Home Tour in San Jose April 21 2012

The historic Naglee Park Home Tour in San Jose will take place April 21,2012 from 10am to 4pm.  Sponsored by the San Jose Woman’s Club, this is the third annual tour.  Iit includes an elegant tea served in the garden of the Catholic Bishop of San Jose, Patrick J. McGrath, a Naglee Park resident.

For all of the details on this event, please see the SJWC website page:

http://www.sjwomansclub.org/tour.html

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.

Coming in at last place: the Santa Cruz Mountains or Los Gatos Mountains area (zip code 95033), where the median list price of houses sold slipped 17% from the year before.  This beautifully scenic region covers a lot of territory and several quite different neighborhoods, some more convenient and others more remote.  It often takes much longer to sell a home in the mountains than on the valley floor but it can be a great “bang for your buck” for great schools, clean area, less crowding, etc.  The remoteness of some homes, the increased rain and other challenges generally make this part of the valley a more challenging real estate market most of the time, and in a down market that’s even more true.

Palo Alto, Mountain View and Los Altos each have regions which can be tracked in addition to the cities as a whole. If you’d like to see these numbers, please visit http://popehandy.rereport.com and then click on Yearly, then select the city, then the neighborhood and you can see how Baron Park or other areas are faring in particular (also for their monthly or quartly reports).

Areas within San Jose, like PA, MV and LA, can be tracked. Since I am very active in several of them (Almaden Valley, Cambrian Park, Willow Glen, Blossom Valley and others on the west side), I want to share those next.

The median sales price of houses which sold & closed in 2011 in the City of San Jose was down 5.9%, lower than the county as a whole.  Most of San Jose was worse off than the prior year – all except Alviso!

Alviso, which was a separate town until not so long ago, sold with a double digit increase in the median sales price – a whopping 10.6% higher than in 2010.  Affordability and investor activity are most likely the cause – more demand and less inventory than the year before. (I suspect either fewer distressed properties or that they were gobbled up quickly. Knowing would require more research.)

Downtown or central San Jose took a beating with the median sales price down 9.6%.  Why did it fall from grace?  Not everything in this area is affordable – consider that it includes Naglee Park, The Rosegarden, and a few other tony areas. I suspect it’s the number of foreclosures (REOs) and short sales but I don’t have that information at hand.  It would require a much closer look that our brief survey here to uncover what’s happening.  (We know that there are many unsold, new condos in downtown San Jose but those should not be impacting the sales of single family homes.)

In future articles or posts I hope to look at a few of these areas more carefully to see what is causing the great diversity between the areas showing improvement over 2010 such as Alviso, Palo Alto, Gilroy, Los Altos Hills, Los Gatos and Mountain View versus those which are really hurting: downtown San Jose, the Los Gatos Mountains, Evergreen, Morgan Hill, Milpitas.  Very likely it’s a combination of the distressed market activity in some areas, school scores, the pricing tier (i.e., homes between 1 and 2 million near Palo Alto) and more factors.  With real estate, it’s always local – and that’s just the starting point.

Yesterday Jim and I attended the Los Gatos Creekside Sports Park kickoff celebration (will nearly touch Vasona Lake County Park and is just off of University Avenue) and as we often do, drove east on Blossom Hill Road to get home. Straight ahead of us, hanging over south San Jose and Santa Teresa and extending north, was a huge and darkened cloud. Smoke? Smog? Rainclouds?

We drove up Harwood Road and to the top of Harwood Court to get a better view of it. It did look like it started in south San Jose or further south than that. Some hikers were trekking up the challenging hill and we asked them if they knew if it were a fire. “Can’t smell it,” one replied “so it must be smog – just awful!” Smog, though, tends to dissipate from side to side and not hang together so tightly as what we saw.

View from Harwood Court in Los Gatos of the smokey skies created by the Cal Fire "controlled burn" in south county

We flipped on KLIV, the San Jose based AM radio station (channel 1590) that best covers local news & traffic, and learned right away that it was a controlled burn. This morning I googled the fire and learned that it’s a 2 day burn at part of Henry Coe State Park, overseen by Cal Fire, with more scheduled for today.

The Morgan Hill Times reports that “The prescribed burn is part of the ‘Western Zone Complex’ controlled fire in the remote area of the park. The fire will take place on the Middle Ridge Trail off Hobbs Road, about eight miles northeast of Morgan Hill, according to Calfire fire prevention specialist Chris Morgan. “

Located close to the Guadalupe Creek and the foothills of the coastal mountain range, the Montevideo neighborhood enjoys tree lined streets and scenic green views of the hills.  Houses and yards are nicely kept. It is fairly convenient for commuting as it’s not too deeply into the San Jose area of Almaden Valley.  About 500 residents call this beautiful neighborhood home.

The Montevideo Neighborhood in the Almaden Valley area of San Jose

Shuffle board area of Montevideo cabana

In addition to the pleasant vistas, the Montevideo home owners and residents enjoy the cabaña, which includes a community pool, clubhouse, recreation grounds (shuffleboard, volleyball court and more), a fun swim team for kids.   There are very few cabañas in the west valley, so this is a big draw.

Adjacent is the very highly regarded Guadaulupe Elementary School, which can boast API scores in the 900s (it was 930 in the 2010 study).

Where is the Montevideo neighborhood located?

The Montevideo neighborhood is situated close to the intersection of Camden Avenue and Coleman Road (not quite to Redmond Avenue) in southwest San Jose (Almaden area, zip code 95120).  The development was built in two phases – the map below shows in a darker green the “Montevideo 2″ area.  The lighter area was the original Montevideo tract.

Map of the Montevideo neighborhood in San Jose's Almaden Valley - click on the image to go to the live map on Google

The Montevideo neighborhood is just across Coleman Road from the also-very-desirable Oak Canyon neighborhood of Almaden.

Which schools serve the Montevideo community?

The Montevideo area is part of the Union School District and the Campbell Union High School District.  (School API scores below can be found on the County List of Schools API Scores for 2009 – 2010 here.)  It should be noted that Union Schools have been “trending upward” for the last few years and that trend is not anticipated to change.

Elementary:  Guadalupe Elementary School – API 930

Middle:  Castillero Middle School – API 806

High School:  this is an “open area” and students here may attend either Leigh High School  – API 817 – or Branham High School – API 781 – (you can choose).

What are homes like in Montevideo? What do they cost?

Smaller Montevideo ranch style house

The Montevideo neighborhood was built by Schulte-Blackwell in the mid to late 1960s on land which used to be vineyards for the wine making endeavors of the Jesuit Novitiate in Los Gatos (the Society of Jesus, a Catholic religious order of priests and brothers).  The terrain is flat in most areas and gently rolling hilly areas in others.  Some of them have mountain or valley views.

The community is comprised of detached, single family homes, primarily ranch style or two story houses, with a few split level homes, featuring attached 2 car garages.   The smallest dwellings are around 1400 to 1600 square feet and the largest ones usually no more than 2600 or 2800 SF (unless they were added onto).  Most are situated on lots of about 8000 square feet, but some are a hair under 7000 on the small side or closer to 10,000 (with a few exceptions that are bigger) on the large side.

Purchasing real estate in Montevideo is usually a “move up” buy as prices run from the mid $700s (if small, distressed, or needing a lot of work) to the $800,000s on the low end up to the low $1 million price range on the high end, depending on many variables (size of home and yard, view, proximity to busier roads or the school, etc.).  Most of these are owner occupied and the neighborhood does display the pride of ownership which is apparent in many better neighborhoods.  (To read up on how to sell one property and buy another, please read my article on that topic on my popehandy.com website.)

The Montevideo Improvement Association has a blog where you can read more about the community, view the original brochures when the subdivision was created and the first homes sold,  find out about pool hours and renting the cabaña, and learn how to access the association documents if purchasing a home there. There aren’t a lot of updates on the blog but still the site has a wealth of general information.

What’s for sale in and near Montevideo now?

Below please find a map with properties for sale, listed on our local MLS, in Montevideo as well as some of the nearby areas such as Oak Canyon, Almaden Meadows and the TJ Martin Park area.  If you are interested in buying or selling a home in the Montevideo neighborhood or anywhere in or near Almaden, please contact me today!

What’s Are The Fun Places for Kids In and Near San Jose?

There are oodles of fun things for kids and the young-at-heart to do in San Jose and the greater Silicon Valley area. Here are a few of the more dramatic highlights!

California’s Great America in Santa Clara. Suitable for all ages but teens will like this best! This park does offer some water play areas and some little kid areas (but it’s expensive for that). Shows in air conditioned theaters will be welcome on warm days. Check out the Wow Card (or VIP Pass if you want to park close) if you’ll be back again in the same season.
Information on season passes & free return trips to Great America

List of Attractions Throughout Santa Clara County and Beyond

Gilroy (south of San Jose)

Gilroy Gardens (formerly Bonfante Gardens) Want to make a bigger trip of it to The Garlic Capital of the World? Gilroy offers great shopping to dress up those kids (or yourself)! Outlet Mall – List of Shops. And maybe when that’s all done, do some wine tasting. If you can take a tour, the kids may not even get bored. List of wineries (and breweries) in and near Gilroy. And lastly, don’t forget the Garlic Festival! It happens in late July every year. Yes, it’s hot. Yes, they do really serve Garlic Ice Cream. You need to try it at least once! The Gilroy Garlic Festival – information, recipes, calendar, fun stuff for kids.

Over “The Hill” – Mountains, Santa Cruz & Monterey Areas

The Mystery Spot (in the Santa Cruz Mountains)

Santa Cruz Beach Boardwalk Summertime: free concerts on Friday evenings!

A fun way to trek to the beach & boardwalk is to park and ride – on a narrow guage train ride through the beautiful redwood forest! Or just take a train ride through the trees. It’s a trip back in time to our logging days in the 1880′s and I highly recommend it. Roaring Camp & Big Trees

Well worth the 90 minute drive from San Jose to Pacific Grove: The Monterey Bay Aquarium

On The San Francisco Peninsula

Kids love airplanes, and they’ll love the Hiller Airplane Museum in San Carlos. The Hiller Aviation Museum

North Bay

Six Flaggs Discovery Kingdom Theme Park.

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.

Close to the Los Gatos border sits one of the more affordable Cambrian neighborhoods in San Jose and the west valley generally.  It enjoys lovely views of the hills, great public schools with high API scores, a neighborhood private school to boot, and convenient access to freeways and stores.  There’s no sign, marker or gateway to the area, so many of its residents are probably unaware that the official name to it is Cambrian Gardens.

This neighborhood provides an incredible “bang for the buck” for home buyers wanting excellent schools and not wanting to pay luxury home pricing.  In many ways, it’s a “sleeper” – meaning that many people don’t know it’s there, but it’s a good deal!

Where is the Cambrian Gardens area of Cambrian?

The rough borders are Union Avenue, Los Gatos-Almaden Road, Leigh Avenue, and the West Valley Freeway (85).

Not everything within that area is part of the tracts which make up Cambrian Gardens, though. It was developed just south of and directly adjacent to the Cambrian Park area which is so well known, but now separated from it by the freeway. (Click image or here to see live map in Google.)

Cambrian Garden Landmarks

Homes built in this part of Silicon Valley were clustered around the later-built neighborhood public school (bordered by Clarinda, Laurinda, Emeline and Sandy), James De Voss, which is now leased out as a private one, the Global School, as well as Little Oak Preschool. The other major landmark to the neighborhood is Ross Creek, which slides through the middle. With it come frogs, egrets, ducks and other wildlife which are generally welcome.

What are houses like in the Cambrian Gardens neighborhood?

The property was subdivided, developed and built beginning in the late 1950s.  Most sections were completed by the early 60s but one part (Mise and Stuckey) came much later and houses there a bit larger.

Typically, the original construction consisted of smaller ranch style houses on about 6000 square foot lots with 3-4 bedrooms, 2 bathrooms and anywhere from 1100 to 1600 square feet. (Most common: 3 bedrooms, 2 bathrooms and 1200- 1300 SF.) Most lots have a frontage of about 60 feet with lots going back about 100 feet.

Since there were several builders, there are likewise several designs. At the same time, though, most were built within a few years of one another so basic features tend to be similar.Fireplaces, front porches, sliding glass doors to back patios, the use of tile, hardwood and abundant windows are all hallmarks of these homes.

Kitchens: a real estate trend of that era was “galley” style kitchens with a breakfast nook area or eat-in kitchen so that’s predominantly what you’ll find here. Some houses have both a formal dining area (dining “L” or combined living-dining room) as well as a breakfast room. Cabinets were often built under soffits, so if remodeling, it’s easy to get more storage by simply bringing the cabinets down directly from the ceiling.

Bathrooms: As with other construction of that vintage, bathrooms were built with efficiency in mind and are compact. The hall bath usually has a shower over the tub and the master bath includes a stall shower in most cases. (The latter often has a built in cabinet next to the shower which could be “blown out” to make a bigger stall shower.)

Houses are set fairly far back on the lot, which was typical for the time in which these properties were built.  For buyers with an eye to expansion, this means there’s room to add on in front (some build up, some build out when adding on).

Garage & laundry: Laundry is usually in the garage.  Most properties have an attached 2 car garage, but one builder provided an option that enabled purchasers to elect a 1 car garage + family or bonus room (and also to have an inside laundry room). A lot of houses have an extra wide side yard just off the garage, which appears to have been intended to function as an area for a drying line.

The majority, if not all of these houses, were built with hardwood floors (all but kitchen and bathrooms in most cases) and forced air heat (but again, one builder used wall heaters – though most of those have since been upgraded by later owners to forced air heating). They are almost exclusively on raised foundations, not slab (exception that I’m aware of being the “bonus” option on the 1 or 2 car garage design, where the family or bonus room is on slab – the rest of the house on a perimeter or raised foundation).

A challenge with some designs in the area is a shortage of closet space (for what we are used to today).  To reclaim some interior space for closets, some homeowners move the furnace from an interior space to either the garage or attic, thus adding another closet.  Others add on to the house, build “organizers” in the existing closets and have other ways of minimizing their need for more.

In looking through the Covenants, Conditions and Restrictions, or CCRs, I was surprised to see the name McKeon twice listed out of three names for those who subdivided this area.  The McKeons are best known in this area for the many, many fourplexes that dot Santa Clara County.  (There were several builders, though.)

What about the schools?

This area is not all served by the same public elementary schools.  One section, north of Ross Creek, has attendance at Carlton Elementary and the other, south of Ross Creek, at Alta Vista. Both are extremely well regarded.  (Please see the boundary map for the Union School District online.) All attend Union Middle School and Leigh High School.  Here are the numbers for the API Report numbers for 2010:

• Carlton: 930 API
• Alta Vista 938 API
• Union Middle 892 API
• Leigh High 817 API

What do homes cost in Cambrian Gardens?

Naturally there is a range of size, condition, and sale type (regular sale vs short sale or bank owned) and those all influence resale value or market value.  Additionally, there are more and less desirable areas: Leigh and Los Gatos-Almaden Road are much busier than more interior streets such as Kenlar, Tilden, or Nerissa (which has no through traffic at all).  And, of course, homes that are very close to the freeway will be louder and that also impacts a buyer’s probable value for the home.

Disclaimers aside, at this time prices are running mostly in the 500s and 600s with exceptions for the extremes one way or the other (big additions or homes needing a lot of work in a less desirable area). You can check on the current Cambrian real estate market conditions here.

Overall, it’s an inexpensive area for the quality of the schools and is a great choice for people who want to live either in the Alta Vista neighborhood or perhaps closer to Carlton Elementary (such as in the King Streets or El Gato Terrace areas) but don’t want to spend that much.

See photo slide show of San Jose’s Cambrian Gardens area

Just listed: Beautiful, updated & remodeled Cambrian Gardens home on oversized lot!
Beautiful Cambrian Home, Large Lot, Alta Vista School, Affordable Price!

Next Saturday the public has a rare opportunity to visit a very unique kind of open house in Silicon Valley – this one’s not for sale and it involves horses!  The San Jose Police’s Mounted Unit has an open house at their stables, where all are invited to meet the horses and officers, tour the barn and see some demonstrations.

Date: Saturday, February 26, 2011
Time: 10am – 3pm
Where: 2525 Kenoga Drive, San Jose

Come learn more about the horses and officers!  There will be raffles every half hour too.

For more information, please view the online flyer for the SJPDMU Open House.

It’s possible to live in Silicon Valley and have no idea that there are still some original adobe houses to be found right here in the San Jose area. Today, though, I hope to help some of our residents discover the past which is lurking right in front of us!

The historic Adobe Woman’s Club is just a block or two off the campus of Santa Clara University, tucked away on a side street now that The Alameda is re-routed as The El Camino.  Address: 3260 The Alameda, Santa Clara.  According to the state’s historical preservation site, this state landmark # 249 is one of the oldest in the Santa Clara Valley, was built between 1792 and 1800 and was one of many row houses built for the native Americans who worked at Mission Santa Clara.  Please note that this is private property and you may not enter without permission, but the adobe abode is very visible from the sidewalk.

Today the beautifully preserved adobe house functions as a nonprofit group with these objectives: “to promote educational, moral, social welfare, cultural, civic and community service.  Anyone who supports these objectives is welcome.”  This scenic place can also be rented out for private events.  The garden is quite lovely and the interior appears to be very modern.  You can see photos of the inside of the house at the club’s website: The Santa Clara Woman’s Club.

Not too far from the Adobe Woman’s Club is Santa Clara’s oldest structure, the Berryessa Adobe, located at 373 Jefferson Street, Santa Clara.  It is open Thursdays and Saturdays from 12noon to 4pm. It features early California artifacts. The Examiner has a great article, full of history on this site: read up!

The Peralta Adobe House in downtown San Jose close to San Pedro Square (at 75 West Saint John Street) can be toured if you pull a group together. (It is also very close to the Fallon House, and the two can both be seen on the same ticket.)  According to the History San Jose website, this is the oldest house in San Jose, built in 1797 and “the last remaining structure from El Pueblo de San José de Guadalupe.”

A few years ago, I did a “client appreciation” event with a tour of the Peralta Adobe and Fallon House.  At the time, anyone could tour these at any time by just showing up and buying a ticket.  The website now says that they need groups of ten or more to tour, so it sounds like another casualty of the Great Recession.  Those who did join me for my event seemed to really like it and I thought it was a good event so would recommend it to others.

Roberto-Suñol Adobe (aka Laura House): Less obvious is the Willow Glen adobe building hidden behind a wooden facade at 770 Lincoln Avenue in San Jose.  Dating from 1870, this adobe house is now home to law offices.  Most of the adobe cannot be seen, but the owners have kindly made visibile a portion of the original adobe construction. Originally, of course, it was a one story house, built in 1836  (have you ever heard of a two story adobe? No!).  According to stoppingpoints.com, “The one-story dwelling was enlarged in 1847 by the new owner, Antonio Suñol, the second story and balcony were added in 1853 by Captain Stefano Splivalo.”

In Milpitas, you can find the The Jose Maria Alviso Adobe, which also began as a one story adobe house and was later added onto with a second floor. As it was expanded, it grew into the one uniquely California style of architecture, the Monterey style.  Also in Milpitas is the Jose Higuera Adobe and Park.

In my own town of Los Gatos, there’s a hair salon/barber shop called the Old Adobe Hair Shop of Los Gatos too – but I cannot find any historical info on it (just business info). In Mountain View, there’s another on Moffett Blvd (that can also be rented out).

If you slow down, you’ll find hints of our collective history all around us – in San Jose, Santa Clara, Milpitas, Mountain View, Los Gatos and all over the “south bay”.   These are easy to miss…and wonderful to find and discover!

Sometimes I read the queries consumers use in finding my site and chuckle at the questions.  Sometimes I’m horrified (one person asked Google how to kill a squirrel and found my Live in Los Gatos blog as I’d written about an old gopher trap there).  And sometimes the questions are really good, and they inspire a post.  Today I saw the one which asked such a good question about residential real estate listings that it is the subject and title of this article. Today we’re going to talk commissions and how much and what percentage is offered to buyer’s agents.

Disclaimer: commissions are NOT fixed by law.  This is a negotiable fee.  Brokerage companies do have the right to set their fees, though.

Sellers have a right to know about the buyer’s agent commission and what’s happening in their marketplace

Some  Silicon Valley real estate agents do not seem to discuss the buyer’s agent compensation (or commission rate) with the sellers.   This cost, paid by the seller as part of the total brokerage fee, is really a marketing dollar.   It can help to attract the attention that may lead to showings and offers. When the oddball listing comes up with an ultra small number, sellers may not realize that it may dissuade licensees from showing their home. (I once actually saw $1 offered!)

Most typically in San Jose today, what is offered to the buyer’s agent is a commission rate of 2.5 to 3% of the sales price of the home.  Sometimes it’s a flat fee, such as $5000 or $10,000.  At times it’s more than 3% (when the seller is very motivated – I have had good luck using that technique with expired listings that were considered shopworn by the buying pubic and their agents).  On rare occasions the figure is less than 2%.  With my clients, I often run reports from our MLS, export it into an excel file and show them the commission rates offered for homes which are for sale, sale pending and recently sold and closed, especially in unique markets or in places where there’s a lot of variation in this amount.  Very often, the homes that are unsold have an overall lower average commission rate as compared to homes that are under contract or sold & closed.  This number can vary based on area, price point, and sale type (distressed sale vs “regular sale”).  We’ll look at one example next, luxury homes for sale in San Jose.

Example: Luxury real estate for sale in San Jose – homes over $2 million and the commission rate offered

Right now in the city of San Jose, there are 20 homes listed at or over $2,000,000 which are available to purchase.  The average commission rate offered for these luxury homes is 2.65%, but the rates range from 2% to 3%. Here’s the breakdown:

2% = 3 homes
2.25% = 1 home
2.5% = 10 homes
2.75% = zero
3% = 6 homes

If we eliminate the one REO and two short sales, the average rate goes down a tad, to 2.6%.  There are no pending sales in this market, and just 2 that have closed escrow in the last 3 months, one at 2.5% and the other at 3% (average 2.75%).  This is possibly a hint that listing the property with just 2% might not be a good idea. Or is it a fluke?  If we look at what has closed in the last  12 months in this strata of high end San Jose homes, we find that just 6 homes have sold and closed – clearly, it is an uphill battle to sell an estate type property in San Jose right now!  The average commission rate offered for these sold luxury houses was 2.625.  The breakdown is as follows:

2.0% – zero
2.25% – zero
2.5% – 4 homes
2.75% – 1 home
3.0% – 1 home

Of the sold & closed homes, not a single one had a commission rate at less than 2.5%.  There may be other things at play – but this would be a “red flag” if I were taking the listing and my client wanted to offer less than the 2.5% to the buyer’s side.  It would be an indicator that perhaps we should look at this issue a little more closely, because it could potentially damage the odds of selling. I would not advise offering 2% to the buyer’s side, given these numbers.

Isn’t this information that sellers should know about?  I think so.

Splitting the brokerage fee: is it 50/50?

Sometimes, agents take listings for a certain percentage but do not share with their clients what amount of that is being offered to the buyer’s side.  If the seller agrees to a 6% listing (as an example only), he or she might assume that 3% will be offered to the buyer’s side.  This does not always happen, though.  Some agents keep 60% of the commission, reasoning that “they do most of the work”.  This happens in all segments of the market, but perhaps most especially among some “short sale experts“.  It is a good idea, when listing your home for sale, to ask about this and find where it is itemized in your listing contract.  Some listing contract forms include the commission rate breakdown, but others do not (only calling out the whole fee).  When the home is on the MLS, ask to see the full or “agent” printout.  The commission rate for the buyer’s agent will be there!

A related issue: the stigma of the greedy agent.  The total commission offered is not a secret to the buyer’s agents forever.  At closing, both agents receive packets from the title company handling the escrow, and the dollars are laid bare.  Agents can see if the listing agent split the brokerage fee evenly or not.  And if not, they may prefer to not work with that greedy listing agent in the future.  Ideally, you want to hire a real estate agent with a great reputation, one with whom other agents really want to work.

In summary: sellers need to be given total transparency on the commission rate and where the brokerage fee dollars go.

Does any of this matter to Silicon Valley home buyers?

If you are a Silicon Valley home buyer, most of the time you will be unaware of the commission rate offered to your agent.  Most agents will show you most homes for sale – but if they run into one with an ultra low fee offered, that may not make it onto your showing list unless you have signed a buyer broker agreement.  Think of it like the for sale by owner homes – there’s either no guarantee of compensation or very little compensation.  If you want to see all homes, regardless of compensation offered, consider signing a buyer broker agreement.  It can open doors for you!

Side note – where the money goes after closing:

The public sometimes believe that all agents make a ton of money for very little work.  I’d like to address that misconception for just a moment and discuss what agents “keep” out of what they “earn” at closing.

In most cases, the Realtor or real estate licensee does not keep 100% of the fee or commission which is paid at close of escrow.  Most agents work at a brokerage which takes a portion of the compensation – anywhere from 60% to 15% usually goes to “the office”.  Sometimes, too, a referral fee is paid – that would come “off the top”.  Most typically agents keep 60 – 80% of the commission.  And out of that, they pay a number of things, of course: fees to the brokerage, memberships and license fees, etc etc. – often amounting to 30 – 50% of their take home – and then they pay Uncle Sam!  The “net net” or amount to live on after all of that can be as little as 1/3 of what they are initially paid.

How are the sales of condos and townhouses in the San Jose, Santa Clara County or Silicon Valley area? Just as with houses, the market is getting more active… things are picking up.  The trend is for increasing sales – pending condo sales in Santa Clara County are rising each week.

Nov 1 – Nov 7 = 116 newly sold (sale pending) condominiums and townhouses
Nov 8 – Nov 14 = 123
Nov 15 – Nov 21 = 129

Year over year, it’s up dramatically too.  Nov 1 – 22 2009 = 234 newly pending sales and Nov 1 – 22, 2010 = 366 newly pending sales (that’s a 64% increase).  That is a very huge increase!

Looking at closed sales and comparing it to two or three weeks ago, we see improvement.  Here’s a graph showing the months of inventory for condominiums and townhouses in Santa Clara County, San Jose, Sunnyvale and Los Gatos (as samples). Below please find the months of inventory for all sale types (REOs, short sales and regular sales) and just short sales.  Countywide and in most places, it remains much harder to sell a “short sale listing” than a regular one.

Los Gatos is odd in that the short sales are going faster than the regular sales.  As you can see, that’s not the norm for the county!  My best guess is that the good schools and low prices make short sales in Los Gatos very attractive.  We might find this same trend in other areas with exceptional schools such as Almaden, Saratoga, Cupertino and Los Altos.

Sunnyvale is still struggling but it has improved from the last time I checked the numbers on Nov 13 2010.

Last month we heard that residential real estate sales were off about 25% nationwide year over year (closed sales) and it was just as bad for home sales in San Jose (statistics show that sales were off 34.8% for closed sales of houses but up 5% for pending sales) and in Silicon Valley generally (closed house sales in Santa Clara County down 28.5% and pending sales up 5.3%).  Pending sales were up around 10% month over month.

Houses in Silicon Valley are Selling Faster and Faster

Pending house sales are on the rise and it’s  now dramatic.  At first I thought it was just me: in the last 30 days, I’ve put five sales together of houses and townhouses (one in Livermore, one in Foster City, one in Campbell and two in San Jose – both in the Almaden Winery neighborhood on the Cambrian/Almaden border).   But it’s not just this faithful blogger who’s seeing a surge in selling activity and accepted offers.  These are clearly trends in the local south bay market.

I just spent a little time on MLSListings.com and checked the numbers of newly pending sales in the city of San Jose:

• Nov 1 to Nov 7, 2010:  159 new pending sales in San Jose
• Nov 8 to Nov 14, 2010: 163 new pending sales in San Jose
• Nov 15 to Nov 21, 2010: 198 new under contract or pending sales in San Jose

If I check sales from 11-1-2010 through 11-22-2010 there were 566 this year but just 386 for the same period last year in San Jose.

Ditto that for all of Santa Clara County: from Nov 1 – 22, 2009 there were 666 pending sales but Nov 1 – 22, 2010 it was 954! 

What’s the cause of all this? Most likely it’s the incredibly low interest rates, which are scraping the bottom and are at about 60 year lows.  My mortgage broker and mortgage banker friends are insanely busy with sales and refinances.

And what does this mean for you, a home buyer or seller in Silicon Valley?  A couple of things:

Silicon Valley Home Sellers: often people pull their homes off the market between Thanksgiving and the New Year or wait until after the holidays to put their home on the market.  This year, perhaps you want to rethink that strategy.  Homes that have been “just sitting” on the market are in some cases now seeing multiple offers.  I have seen this in my own practice.

Silicon Valley Home Buyers: you may not be able to get away with “low balling” homes even if they’ve been on the market awhile because many other buyers who have been watching the market are now jumping in with both feet.  Study the comps and write a realistic offer if you want the home!

People often ask me, “how’s the market?”  The answer is, it depends.  It depends on whether it’s a short sale, REO or regular sale, the schools, view, condition, etc. The Silicon Valley real estate market really isn’t “one market“. It’s a bunch of smaller markets woven together. So the answer depends on what you’re looking at.

Today we’ll focus on the sale type and take a broad view of regular sales vs short sales with Silicon Valley houses/duet homes and condos/townhouses.  The data comes from MLSListings.com, our local multiple listing service, of which I am a member.  I crunched the numbers today. I have made every effort to provide accurate info, but can’t guarantee it.

To arrive at the months of inventory, I get the number of active listings (not pending, but available, or “status 1″ for my local Realtor readers) and the number of closed listings for the same area/home type which have closed in the last month.  Divide the first number by the second and you get months of inventory or MOI.  Below please find the numbers for Santa Clara County as a whole, San Jose as a whole, and various cities or areas of San Jose.

The National Association of Realtors calls 6 months a balanced market. In our area, at 5 months it is really a buyers market, though. The higher the MOI, the “worse” the market is for sellers – things just aren’t selling well. Over a year and it feels impossible.

Generally speaking, it’s a sellers market for most Silicon Valley real estate – the non-distressed homes on the market are selling very decently overall (Los Gatos seems to be the exception).  Also generally speaking, it’s harder to sell a condo or townhouse than it is a single family home (house or duet home).  It’s worse still if it’s a short sale townhome or condominium.  Sunnyvale is the toughest market around for short sale townhouses or condominiums – it is at a whopping 16 months of inventory.  There are a ton of short sales and buyers are simply not buying them.

At the other end of the spectrum is Cupertino, where non distressed homes are a red hot sellers market at just about 1.5 months of inventory.

Broad generalization – Best market:  non-distressed houses.  Worst market: short sale condos & townhouses.  There are some exceptions. It’s not all that easy to sell a house in Los Gatos, and short sales in Cupertino and selling well.  So many nuances even in the broader markets.

How’s the market? It depends!  A Sunnyvale condo short sale seller is in a totally different market than the seller of a non-distressed house in Sunnyvale.  Same city, completely different market.

Many newcomers to the San Jose & Silicon Valley areas want to buy new homes (or newer ones).  Santa Clara County, though, had a big “building boom” after World War II ranging from the 1940s through the 70s.  At the end of the building frenzy, most of the land was taken.  More importantly, most of the really good land was built up.

How old is the “average” San Jose home for sale?  Probably about 45 – 50 years old, on average.  Depending on where you’re looking, precisely, the homes could be younger or older on average. 

There are some nice communities of new and younger homes in Silicon Valley, but there aren’t a lot of them.  Most of the new home communities have houses on small lots.  Some are near high voltage power lines (homes on Taft in San Jose’s Cambrian Park area) or next to freeways (Summerhill development off Samaritan Drive in San Jose). 

It’s easier to find newer homes in Morgan Hill, Evergreen, Milpitas, and areas that held onto agriculture longer. Pockets of newer homes exist throughout the valley, and some of them are on good land (such as the Willows neighborhood of Willow Glen or the Almaden Winery area in Cambrian/Almaden). There’s a beautiful subdivision of luxury homes in Saratoga where the homes enjoy gracious, large lots.  That land used to belong to an order of Catholic sisters (Notre Dame de Namur).  Good land!  Much of the other good land was either horse property, orchards, or vineyards until somewhat recently. Small pockets of that remain, including the “North 40″ in Los Gatos – which I understand has been sold and is soon to be developed.

Several parts of our South Bay community have roots that go back into the 1800s or earlier: downtown San Jose, old Santa Clara, Willow Glen, Mountain View, Los Gatos, Campbell, Saratoga, Alum Rock Park… many of these neighborhoods have Victorian era houses.  Japantown, in San Jose’s downtown area, has some beautiful Spanish style homes dating from the 1920s. (There are only a few of original adobe houses left that date to the late 1700s.) 

Don’t rely too much on the age listed in the mls!

One thing to be aware of is that some homes that are said to be 60 or 80 years old may have been virtually rebuilt and “like new”.  Sometimes the MLS will show the older number but only reveal the drastic remodel in the comments. So if you’re looking for a younger home, don’t just search by the age listed in the MLS – it may not be a true representation of the home’s condition!