How’s the real estate market in San Jose’s Almaden Valley? Commentary and statistics…..

It’s actuallya lot hotter than the numbers for the Almaden closed sales in February might indicate; the last 2-3 weeks have seen a heat-up the likes of which I have not seen since 2000. Many properties are selling fast, sometimes with multiple offers.  We are experiencing this trend throughout the west valley areas: Los Gatos, Saratoga, Cupertino, Palo Alto and on up the Peninsula.  These multiple offers are pushing prices higher. In many cases, it is much higher.  I’m seeing some overbids of more than $100,000 in some cases as well as offers with no contingencies for loan or home inspection. Listing agents sometimes write in their private MLS comments for other agents “no pre-emptive offers“.

What’s driving it?  There are years of pent up demand in which would-be home buyers sat on the fence, either because they expected further price drops or because, in the case of move-up buyers, they didn’t have enough equity to budge.  With record low interest rates and prices creeping up – combined with an infusion of cash from high tech employees with either great stock prices (Apple) or an IPO (LinkedIn, Facebook, Yelp, and more), there’s the classic case of more demand than supply. 

Almost every offer I’ve been involved with over the last month has been a multiple offer situation, whether in south San Jose, Blossom Valley, Cambrian, Los Gatos, or Saratoga.  Prices from $400,000 to $1,800,000 – all at least 5 offers, sometimes far more.  As Chris Trappani, the CEO and founder of Sereno Group says, “we’re seeing it now – the papers will report on it in a month”.

Stats for the Almaden real estate market for houses in February 2012 (click on link to see more info):

Note that the median sales price is up almost 15% from January and the average price rose 7% month over month. Year over year it’s not so good but from what we are seeing, it’s unlikely to look like this when the March 2012 numbers roll in.  Also note the jump in pending sales and the lower number of actives – less inventory, more absorption.

How is the real estate market doing in the Almaden Valley area of San Jose? We can look at a few key indicators (median list price, average days on market, and inventory levels) to get a pulse on the current market in the San Jose, 95120, area. Graphs below are from Altos Research; I am a subscriber so may present these to you here. Data used is list pricing. (To see the most recent reports using closed Almaden sales numbers from November, please view my Almaden Valley Real Estate Report, which is from another provider and is another of my subscriptions to get the best data possible for my clients and readers.)

From the solds last month and in prior months, we know that overall, the Almaden real estate market has been deepening in the buyer’s favor. Prices have been slipping, days on the market are lengthening, and list price to sale price ratios have wavered a bit.

Median List Price for Almaden Valley Homes

The graph above reflects the list prices of real estate in Almaden Valley, which is an upscale district on the southestern side of the city of San Jose. Interestingly, while the list prices of single family homes is declining, the list prices of condos and townhomes has performed almost the opposite in the last twelve months and now appears to be level.

Among houses, is it any different from one price point to another?

 
The main difference in pricing by Almaden quartile appears to be one of degree. The highest priced homes appear to be coming down the most, and more affordable or entry-level houses in Almaden are slipping very slightly by comparison.

For Almaden condominiums and townhomes, prices appear to be far more chaotic, with much more volatility in the highest price Almaden townhomes and condos:

Average Days on Market for Almaden Valley Homes 

First we’ll have an overview of the houses and condos in the San Jose, 95120 zip code (Almaden Valley) and their average days on Market.

The condos and single family homes for sale in Almaden have followed mostly similar patterns over the last twelve months and now are both rising. This indicates that it is more difficult to sell a home. Single family homes remain on the market for an average of about 110 days, close to four months. Most of these are not selling, but are either taken off the market, or put back on with a new price and new MLS number.

Next let’s have a look at each class of property by quartile to see if it’s varied or similar.

Single Family Homes

The four quartiles or ranges of prices in Almaden are all fairly similar in how they’ve been behaving except for the lowest price point among single family homes, which appears to have had a nearly steady incread of days on the market over the last year while higher priced points all had a dip (or a rally) over either the spring or summer).  Now, though, homes in the lowest two quartiles have levelled off, while it continues to worsen in the two upper price ranges. Hardest to sell are the highest priced houses in Almaden.

Condos and Townhomes in Almaden

While the list prices for Almaden townhouses and condos showed different patterns, the average days on the market for condos by quartile is simply a wild ride. Twelve months ago, the DOM for most price quartiles was close to 60 except for entry level condos, which were half as many days. In successive months, though, each price point behaved very independently of the others.

The two top quartiles are now selling faster then a year ago, but the entry level condos of the first two quartiles are now staying on the market far longer (and they are the bulk of the condo market).  Why? The condo market in Silicon Valley as a whole has been taking a beating while consumers choose foreclosure houses rather than condos.  Perhaps those living in upscale condos are not there because they can’t afford a house, but prefer the lifestyle that condo or townhouse living provides. Unfortunately, we don’t have that data to offer a definitive explanation.

Almaden Valley Inventory of Homes for Sale

Inventory is another key indicator on market performance.

The graph for inventory is less worrisome then days on the market. Inventory levels are close to flat among townhouses and condominums in Almaden Valley, while the numbers are clearly declining among houses there.

Again, let’s see if it’s the same in all price ranges or if there’s fluctuation. First, among Almaden houses for sale:

I redid this chart a few times to make sure there was not an error. It is oddly uniform across all price points.

And for townhomes and condos in Almaden:

Even within the otherwise somewhat disparate Almaden condo market, the inventory patterns are similar.

Overall, it remains a buyer’s market in Almaden Valley, and this is true for condos and houses and it is true in all price ranges.  Prices run from flat to falling, inventory is dropping (which may just be a seasonal fluctuation), days on market are lengthening.

Sellers need to make their home as perfect as possible. Buyers have never been pickier and the vast majority of buyers today do not want to buy a home and fix at all. Homes that need updating or remodeling either won’t sell or will sell for far less than you might expect. The greatest demand is for turnkey (read: perfect) homes with no issues (read: no busy roads, no high voltage power lines, nothing objectionable nearby).

Buyers, if you are one of the rare few who will buy and fix, the market is at your feet in many cases. Your main challenge will be in selling your current home, if you are a move-up buyer, or in securing financing if you do not have a large downpayment. The best bargains will come to those willing to buy and fix and to those with large cash downpayments where financing becomes much easier.

All of this market information is general. Your home may be unique due to things like views, construction, proximity to schools or golf courses, or any other number of factors. Please contact me for specific information relating to your home or one that you would like to purchase.

How is the Almaden Valley Real Estate Market doing?

It’s the end of September now, and normally we see a little rally in the market after Labor Day. Let’s see how this September is stacking up in Almaden Valley. Below, please find charts using current list prices courtesy of Altos Research (to which I subscribe).

The Median List price for the Almaden Valley district of San Jose (zip code 95120) has been declining overall. Does this mean that homes are declining in value? Or does it mean that less expensive homes are being offered for sale? Information from sold data indicates that by and large, homes are holding their value in Almaden right now. The declines in asking prices may indicate that sellers simply want prices to be rising more than they actually are, rather than the idea that values are falling.

This first chart indicates how both homes and condominiums or townhouses are faring in terms of median list prices in Almaden. Interestingly, the condo market had a steeply rising list price this last spring, while the single family home market did a milder version of the same a couple of months later. What sellers want for their homes is not matching up to what they are getting.

Next, let’s have a look at the percent of homes that have had price reductions in this part of San Jose. A steep increase in the number of condos needing reductions in price are seen in the timeframe following that rise noted above. This would seem to indicate that condo sellers were more optimistic when putting their homes on the market, but found out over the next couple of months that these asking prices were not realistic. The number of properties getting price decreases among single family homes were a bit later, just like the rising list prices were later, in Almaden. Right now, though, the percentage of sellers decreasing their list prices are about the same for both types of housing – appx 52%. So approximately half the homes currently on the market in Almaden have had at least one price reduction.

If homes are listed too high and must take price reductions, then most likely they are on the market a longer time prior to selling too. The next chart addresses the average days on market for the 95120 zip code area of San Jose. For both condominums and single family homes, it appears that the longest days on market were in spring of this year – the peak being in March for houses and April for condos. The single family home market is worsening now, though, and has been rising since mid-summer. The townhouse and condo market, though, is still on a downward trend. In reality, though, the actual statistics for time on the market are probably worse as some agents will change the MLS number when a steep price change happens.

Finally, a look at the inventory (amount of homes for sale) in Almaden Valley’s houses and condos. Not surprisingly, the inventory has risen dramatically among single family residences over the last year, but now it’s decreasing somewhat. (This is not surprising because the days on market had been rising and so is the percentage of homes getting price decreases within this type of housing). The condo market, though, is faring better now, with inventory rising only gradually.

For Almaden Valley home sellers, the market is not as bad as it has been in recent months, but it is important to price your home realistically and have it well marketed in order to sell. For Silicon Valley home buyers wanting to be in an upscale area with good schools, now is a good time to go shopping in Almaden. It is important to realize that homes are not selling for bargain basement prices in Almaden Valley, unlike in other parts of Santa Clara County, but prices are on the soft side. Motivated sellers may list their home aggressively so don’t assume that every house will sell under list price! Do your homework when buying and you’ll be able to maximize the current market potential.

San Jose’s upscale suburb, Almaden Valley, features gorgeous hillside views, great schools, low crime, and consistently nice neighborhoods. Home prices range from a little higher than average to very expensive. How is the real estate market faring in posh Almaden Valley?

Here’s a snapshot view of list prices over the last year in Almaden of both single family houses and condos or town

It is curious to note that condo prices seemed to have an uptick while single family homes had a downtick around March first of this year. Condo and townhouse prices in Almaden appear to be slipping overall since then, while home prices have risen generally, though slipped again a little since July 1st.

Next let’s have a look at asking prices for single family homes, or houses (as opposed to condominiums or townhomes). Below, find the data broken down by quartiles.

It is interesting to see how differently the lowest quartile has done from the highest in Almaden, and also how large a gap there is in the price point between the top and second pricing groups there. Most of the activity in Almaden is somewhat close to $1,000,000 today. Most of these median asking prices are approximately where they were a year ago, and each one had a “peak” in pricing at different points in the last 12 months. While March/April is usually the best time to sell in terms of getting a high price, clearly that hasn’t been the case in all price points in Almaden.

How about with the condo market in Almaden Valley? Let’s see:

Again, there’s quite a difference between one price point and the next. The most expensive, luxury condos in Almaden seem to have had their highest list prices last November, then a lesser peak in about April 2008. For the second quartile, the market appears to have peaked sooner – beginning in about February. And for the last two quartiles, the timing was closer to June!

Almaden Valley is full of micro markets. With this post, it is clear that the price point of condos and houses is one factor to consider. Views, proximity to shopping and golf courses, land, house size are all important too. Another key issue is schools. Much of Almaden has Leland High School, for instance, which is rated very highly. The part closest to downtown San Jose, though, has Pioneer. And one little sliver close to Hicks Road actually has Los Gatos Schools – which are highly acclaimed, but not close by and very inconvenient!

To get a pulse on the market where you live, or where you’d like to live, please give me a call or send me an email. I’d welcome the chance to speak with you about your plans, wants and needs in Almaden Valley.