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.

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

The Campbell, CA, real estate market for condos and townhouses has been a little up & down, but for houses it’s a stronger market.  That does not mean that prices in Campbell are where the owners or sellers would like them to be – just that residential real estate which is appropriately priced is selling pretty well.

Here’s a visual of market conditions (not prices) generally, through June 2011:

What about prices and home values?  Are they holding up?

Campbell houses for sale:  prices appear to be slipping slightly.  Some volatility is to be expected this year and next, so it’s possible to see some up and down (but probably not super dramatic unless you just barely have equity and it’s the difference between being able to sell without bringing money to the closing table or not).  Here are the figures for June – see the whole report on my R E Report site for Campbell CA houses:

The market for houses is good, but pricing is soft, as you can see in the numbers above.

What about for condos?

Condominiums and townhouses in Campbell – see the full real estate report online (updated each month around the 5th – 8th).  Isn’t it interesting that although it’s a cool or cold buyer’s market, prices there are actually inching up pretty noticeably.  That is very good news to condo and townhome owners who want to be doing a “move up”.

Next we’ll take a brief overview of the “big picture” in Campbell’s housing market by looking at statistics related to currently listed homes for both houses and condos or townhomes there. (Charts and data by Altos Research, to which I have a subscription and permission to use here.)

Median Price of condominiums and single family homes:

It’s interesting to see that there’s a rise in the median list price of houses for sale in Campbell whereas a leveling off with the condos and townhouses.

Inventory of houses and condos and townhouses in Campbell – both classes of housing are seeing a rise in inventory, but it’s more dramatic among houses:

Days on the market for homes for sale in Campbell – the two “markets” are now dialectical!

These numbers – for both houses and condos – can only give you a broad picture of what’s going on.  If there are no homes for sale in your townhome community and it’s in a great area, and you price it well etc., you should find it relatively easy to sell.  But if there is too much supply (too many similar homes on the market), it will be far more challenging to sell.

The residential real estate market, like everything else, is all about supply and demand.  For information on your specific neighborhood, please call me or email me today.

For more reading on Campbell CA real estate:

Affordable, Inexpensive Real Estate and Houses for Sale in Campbell, CA

Campbell, California: Once the Heart of the Fruit Canning Industry

Find Campbell, CA Houses for Sale:

Showing properties 1 - 5 of 23. See more city of Campbell real estate.
(all data current as of 5/24/2012)

1. $425,000 : 1270 Hoffman Ln, Campbell
   
   4 beds, 1 full, 1 part baths

   Home size: 1,462 sq ft

   Lot size: 15,252 sqft
   
2. $799,000 : 4192 W Rincon Av, Campbell
   
   4 beds, 2 full baths

   Home size: 1,512 sq ft

   Lot size: 6,695 sqft
   
3. $849,000 : 1776 Leigh Av, Campbell
   
   4 beds, 3 full baths

   Home size: 2,160 sq ft

   Lot size: 7,700 sqft
   
4. $708,250 : 130 Graham Dr, Campbell
   
   3 beds, 2 full, 1 part baths

   Home size: 1,579 sq ft

   Lot size: 2,065 sqft
   
5. $830,000 : 117 George Ct, Campbell
   
   4 beds, 2 full, 1 part baths

   Home size: 1,985 sq ft

   Lot size: 2,702 sqft
   

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

Browse Campbell, CA Condos Listed for Sale on the MLS:

Showing properties 1 - 3 of 3. See more city of Campbell real estate.
(all data current as of 5/24/2012)

1. $250,000 : 340 N 1st St #4, Campbell
   
   2 beds, 1 full bath

   Home size: 798 sq ft

   Lot size: 2,000 sqft
   
2. $374,950 : 55 Redding Rd, Campbell
   
   2 beds, 2 full baths

   Home size: 992 sq ft

   Lot size: 1,025 sqft
   
3. $175,900 : 2785 S Bascom Av #5, Campbell
   
   1 bed, 1 full bath

   Home size: 588 sq ft

   Lot size: 612 sqft
   

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

View townhouses or townhomes  in Campbell, California, listed for sale on the multiple listing service (MLS):

Showing properties 1 - 4 of 4. See more city of Campbell real estate.
(all data current as of 5/24/2012)

1. $413,000 : 1124 Capri Dr, Campbell
   
   2 beds, 1 full, 1 part baths

   Home size: 1,336 sq ft

   Lot size: 1,150 sqft
   
2. $335,000 : 1116 Capri Dr, Campbell
   
   2 beds, 1 full, 1 part baths

   Home size: 1,336 sq ft

   Lot size: 1,150 sqft
   
3. $499,900 : 672 Cypress Ln, Campbell
   
   3 beds, 3 full baths

   Home size: 1,358 sq ft

   Lot size: 1,742 sqft
   
4. $468,000 : 480 W Hacienda Av, Campbell
   
   2 beds, 2 full, 1 part baths

   Home size: 1,597 sq ft

   Lot size: 920 sqft
   

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

What happened to the strong buyer’s market, where bargain hunters could scoop up great deals at ridiculously low prices?

Many buyers have waited to “find the bottom of the market”. Now’s the time to get off the fence; the market’s turning and is headed into seller’s market territory (at least in some areas and price points).

One of the best ways to understand the real estate market conditions is to track the absorption rate or months of inventory. Approximately 6 months of inventory is a balanced market. Five or less is a seller’s market and seven or more months is a buyer’s market.

Here’s a view of what’s happening among single family homes in Santa Clara County (about 60% of the county is represented by the City of San Jose):

Inventory is down, sales volume is up, the median sales price is up (it had been holding steady at appx $450,000 for the last three months – this is the first uptick we’ve seen this year). The days on market are holding steady at close to 100 and the percent of list price is hovering at around 97%, where it’s been throughout 2009.  No real signs of slippage here, but there are signs that inventory is being absorbed.

Once inventory starts declining, there will be pressure on prices to go up.  (It is supply and demand driven, of course.)

On the flip side, the foreclosure moratorium will be ending shortly and there may be an increase of inventory.  If that happens, it will stem the tide and it will revert into buyer territory.  Until and unless that happens, though, it looks like Silicon Valley real estate is generally turning back to the seller’s favor after three long, difficult years of buyer gains.