Right now I’m working with a number of very frustrated home buyers.  Silicon Valley real estate inventory is painfully low, and in the lower price ranges especially, that means multiple offers are fairly common.  FHA home buyers, in particular, are getting out bid and out negotiated by all cash buyers, many of whom are investors.

How low is the inventory?  Let’s have a look at January’s inventory for houses & duet homes (“class 1″ or single family homes) over the last ten years in Santa Clara County (San Jose, Los Gatos, Campbell, etc.):

2012  1,382
2011  2,007
2010  2,426
2009  4,759
2008  4,872
2007  2,698
2006  2,202
2005  1,285
2004  1,612
2003  3,119

The average January inventory of available houses over the last 10 years is 2,636.  At 1,382, January 2012′s available inventory of houses for sale in the San Jose area was just 52% of normal.  It’s not really much different now, in early February (just did a quick check on the MLS and it’s  1509 houses now – 630 have sold & closed in the last 30 days so that’s 2.4 months of inventory – a hot seller’s market).  This is what constitutes a very severe inventory shortage.

Demand hasn’t slackened, but supply has.  You know what that means – it will push prices up, it will make buyers crazy feeling.

Why is inventory so low?

A common question is this: why is inventory so low?  I believe that there are a few drivers.  First, many home owners who would like to move really need more equity to do so.  They are waiting for the market to recover.  Some may be waiting for prices to return to their previous highs (they could be waiting awhile). Others just need a little more to make the move possible at all.

Many owners of higher priced homes are holding on until the second half of 2012, when it is expected that there will be more people with buying power due to recent and upcoming IPOs.  Economists are now predicting a bit of a frenzy the second half of this year with prices in more expensive homes getting pushed up due to competition from employees of various high tech firms.  Smart buyers are trying to get in before that hits – a real challenge given the inventory situation.

Reality check: not every house is selling!

The best properties are selling well – those which are newer or nicely remodeled, in turn key condition, easy to see, great marketing with multiple photos, appropriate MLS exposure and priced aggressively.  This is what every buyer wants, the perfect house.  Most of my clients tell me that they are willing to replace carpet and repaint, but they don’t want to do anything big, such as kitchen or bathroom remodels, removing a pool, foundation or drainage repairs, etc.  No one does!

One of the easiest ways of improving your odds on being able to purchase a house is to move away from the new or fully remodeled vision of your ideal house.  Lower your budget a little, decide to prefer homes that have been sitting on the market not due to location issues, but rather to pricing or condition issues – both of which can be fixed.

For instance, many home buyers will take a pass on properties which have a pool in the backyard.  A few months back, I did some research and found that houses with pools are harder to sell right now.  Appraisers count a pool as an improvement, but many consumers view it as a liability – an ongoing monthly expense to heat and maintain and a risk if there are small children.  Many think that it will be overwhelmingly difficult to remove and relandscape a pool, so will not even consider writing an offer if the property includes an in ground pool.

Truth is, it’s not that hard to hire a company to redo a backyard; it is not invasive the way a kitchen remodel is.  You could have it done before even moving in!  The cost varies on whether you want the pool fully removed or partially as well as how to relandscape afterwards.  I have seen bids for pool demolition work under $10,000 (relandscaping extra) with more bids between $10,000 and $25,000.  Lawn and sprinklers are not so expensive to add!

The pool issue is just one example – there are many other properties for sale which are passed over due to the condition not being ideal.  Remodeling can feel a little scary but when inventory is so tight, it can be the ticket to home ownership.

Likewise with over priced properties.  Although most homes sell within a couple of percent of list price, there are exceptions.  Sometimes real estate is badly overpriced, and in those cases you may get a seller to agree to a larger price reduction – 10% may even fly.  (This is unusual, I would note. Usually if a house is not worth within 5% of list price, the seller is unreasonable and won’t accept an offer which is less. But sometimes it can work.)

Here’s to the over priced ugly duckling.  It could be your best friend when inventory is rock bottom!

The Los Gatos real estate market for houses & duet homes looks pretty good at first glance, but if you scratch the surface and analyze some of the sub-markets, we see that it varies widely as to how “the” market is faring. (It’s not one market, but many smaller markets near each other.)

Yesterday I spent some time pulling apart the housing market in Los Gatos (for houses and duet homes, not condos) by school district and price point to get the months of inventory.  Here’s a brief summary:

The market gets substantially colder as you go up in price – read more and get more details on Live in Los Gatos!

More reading…

How’s the Los Gatos Real Estate Market Doing Now?
Please also view the current statistics care of Altos Research on my popehandy.com site on the Los Gatos real estate market (uses list prices rather than solds):
How’s the Real Estate Market in Los Gatos?

How’s the Blossom Valley real estate market?  How hard is it to sell a house there now?  (Check the Almaden Valley real estate market here.)

About half the active listings of single family homes for sale in the Blossom Valley district of San Jose are either short sales or REOs.  For all of area 12 (our MLS name for this part of San Jose), as of right now there are 124 houses listed and 61 of them are either short sales or bank owned homes (REOs). (Blossom Valley is 2/3 95123 and 1/3 95136.)

Today we’ll look at the market generally and also see how the high end is faring there – most expensive homes being those listed at or over $550,000.

Months of inventory reflects the ratio between available homes (not under contract) with those which have sold/closed in the last month.  That’s the absorption rate, or how fast homes that go on the market are being absorbed by buyers.

How “hot” is the market in Blossom Valley? It depends. Bank owned homes are flying off the market – particularly the most expensive ones.

Short sales are the coldest, hardest to sell – especially the most expensive ones.

Normal sale? The lower the price, the easier it is to sell.  But even the most expensive homes are only at 4 months of inventory, which the National Association of Realtors would call a seller’s market.  Here, though, we wouldn’t view it that way because Silicon Valley real estate usually moves a lot faster than that.

In addition to sale type and price point, there are many other factors which make a home more or less difficult to sell.  Getting the pricing right is huge and probably the most important element of all.  Staging, marketing, accessibility are all key too.  If you’re interested in selling or buying a home in Blossom Valley, please contact me today and we can discuss it.

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.

How is the Campbell condo and townhouse market?  The answer may well depend on both what part of that market we’re discussing and which data we’re focusing on.

The Campbell Condo Real Estate Market Summaries for Summer 2010

The summaries here are from my Real Estate Report.  Get the most current, detailed report at www.popehandy.ReReport.com.

Campbell condominium & townhouse sales in September 2010

The condo market in Campbell, California has been strengthening.  September 2010 was a good month!

August 2010 Condo Sales in Campbell CA

August was slow across Silicon Valley – real estate sales lagged (more than the “seasonal average”)

July 2010 condo market for Campbell, CA

June saw the market slow, and like much of the Santa Clara Valley, prices were up but sales were down.  When this happens it sometimes means that home values aren’t rising, just that more expensive homes are beginning to sell, but in Campbell we are now seeing modest price appreciation.

More detailed info from late June, 2010:

The absorption rate, or months of inventory, indicates that it’s a seller’s market:

The hottest segment is the bank owned or REO part of the Campbell condominium or townhouse realty market, and the slowest segment is the short sale section (which is about 20% of the available inventory). That’s very typical of other nearby areas: the hardest homes to sell are the short sales.  As a side note: there are 39 condos available and 29 which are sale pending. That is a high ratio, which also points to a seller’s market.

How does this compare to a year ago?  It’s completely different!

A year ago, the months of inventory was a whopping 72% higher at 8.8 for May 2009 vs 2.5 for May 2010. Solds are up 42% from 12 months ago.  Pending sales are up 200% from a year ago also.  So from every vantage, it’s much, much better than a year ago.

What about other data?  I have a subscription to Altos Research, which also charts the market but does it a little differently.  Often the numbers I crunch line up but sometimes theirs is an opposing view.  Here’s their current summary, which puts this market as a buyer’s market, not a seller’s market:

I like the fact that they track flipped homes, relisted homes and the percent of properties with price decreases.  This is especially important when you consider how many homes may get a price change and then a new MLS number, which may confuse some of the statistics.

Altos also breaks down more info by price quartile (they use list prices, not sales prices, for this info).   What I like about the following chart is that it gives you an idea of what your money will buy. (Seeing 4.5 bathrooms is throwing me, though – I don’t recall ever seeing a condo or townhome with that many bathrooms anywhere!)  Also of interest: the majority of condos or townhouses in Campbell seem to be around 1300 SF with 2 bedrooms and are offered somewhere in the 400′s.  That’s useful information for buyers and sellers alike.

So what can we say about the conflicting assessments of the Campbell real estate market for condos and townhomes?

I think Altos has some valid concerns about the long days on the market – 88 DOM does not sound like a “seller’s market”. I looked at the pendings to see if I could blame short sales – but even among pendings that are “regular sales”, the DOM is 64 (it’s actually less among short sales, oddly). That’s pretty long. We tend to think of a seller’s market as being applicable when homes sell in 3-4 weeks. Two months is a bit much to call it a seller’s market. Of the seven “normal type sales” which are pending, only two of them sold in under three weeks.

All in all, I think it shakes down to a fairly balanced market right now.  It’s not a bad time to sell, and it’s not a bad time to buy a Campbell condo. Search Campbell condo listings now!

Campbell CA Condos for Sale, Campbell Townhouses for Sale, Campbell Condominiums for Sale

Browse a list of homes in Campbell currently listed on our MLS as active & available. No need to register – see all condominiums & townhomes in Campbell (which are on the MLS).

Showing properties 1 - 5 of 8. 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. $250,000 : 340 N 1st St #4, Campbell
   
   2 beds, 1 full bath

   Home size: 798 sq ft

   Lot size: 2,000 sqft
   
5. $370,000 : 557 W Latimer Av, Campbell
   
   2 beds, 2 full baths

   Home size: 1,126 sq ft

   Lot size: 1,306 sqft
   

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

Santa Clara County Condo Market

Real estate statistics and trends at a glance – below please find the data for Sept 2010 and Aug 2010 for all of Santa Clara County. (View the whole report online here – Santa Clara County Condo Market Trends Report. It is updated each month between the 5th and 10th, and this link will always bring you to the most current report.)

Countywide, the condo market has had a rough few years – and this year is no exception.  Prices are starting to nudge up again, but the number of sales remains sluggish.

Median List Prices of Condos in Almaden Valley, Los Gatos, Saratoga and Cupertino

A stranger graph you may never have seen – it is very tangled looking! The slate blue line represents the Saratoga condo market, which I can attest first hand has been suffering.  Of these four market areas, it’s the most expensive.  The green line is Almaden Valley, San Jose, 95120.  It has been slipping in price fairly consistently this year.  Interstingly, though, Los Gatos has had a softer ride and Cupertino’s prices are rising!

The Cupertino real estate median list price for condominiums and townhouses

Next, let’s see Cupertino’s condominium & townhouse market by price quartile – below is the current median list price. Most price points seem to be doing well overall.

Spring was better than the year before for much of Silicon Valley, but only the least and most expensive quartiles enjoyed a noticeable uptick.  Both groups also fell off a bit later – just like the rest of the San Jose area.

The Almaden Valley real estate median list price for condominiums and townhouses

Almaden fell hard this year!  Even so, the “uptick” in spring was evident in the lowest quartile and the third one as well, but then more falling.

The Los Gatos real estate median list price for condominiums and townhouses

Los Gatos has been experiences a smoother fall than some of the nearby areas. It is noteworthy that the more expensive condos (and presumably townhouses) in Los Gatos did much better than the entry level homes did.

The Saratoga real estate median list price for condominiums and townhouses

Saratoga’s condos and townhomes also had better market conditions at the top end of the scale earlier this year, but now three of the four tiers appear to be appreciating while the topmost level has slipped a bit.

Inventory Levels of Condos in Almaden Valley, Los Gatos, Saratoga and Cupertino

Inventory has been growing in all areas but Cupertino, which continues to sell very well despite the “Great Recession”.

Average Days on Market for Condos in Almaden Valley, Los Gatos, Saratoga and Cupertino

The days on market dropped until late summer, when they began climbing again.  This is a little unusual since often people just take the property off the MLS if it goes on too long. Are these numbers from short sales that drag on and on? In some cases, probably that’s an impact but not huge because the numbers of distressed properties is still low in these areas.

Please check back for updates and also visit my Real Estate Report to get info on all of Santa Clara County’s market conditions, including houses, condos and townhomes.

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Older Posts:
June 2010 post
The Condo and Townhouse Market Update in the West Valley for June 2010

March 11, 2009

The real estate market for condominiums and townhomes in the west valley area of Silicon Valley is similar to the rest of Santa Clara County in one main regard: the most expensive homes are having far more trouble selling than entry level homes.

Today we’ll look at the months of inventory for condos and townhomes in four areas of the west valley: Almaden Valley, Cupertino, Los Gatos and Saratoga.  Since this is a fairly small subset of the overall residential real estate market, I’ve also looked at them as a group (upscale areas with good to great schools near the  foothills) and wanted to see the overall trend when the four neighborhoods were viewed together.

As a reminder, under 6 months is a seller’s market, 6 is neutral and 7 or more is a buyer’s market.

Interestingly, the overall trend of these four areas combined shows consistent improvement in the market toward neutral, from 23.5 months in January to 8.6 months in April.  It’s really very dramatic when viewed as a whole!

Cupertino area condos are faring well in the last 30 days with more closed escrows and just 8 months of inventory. Los Gatos is even better now with 6 months of inventory.

The market is much tougher in Saratoga, CA, where almost no condominiums or townhouses are selling.  Those that do go under contract are in the lowest price ranges.  Many properties are “just sitting”.  Buyers are waiting for prices to drop.  Nearly as tough is the condo market in Almaden Valley.

The challenge for luxury condo owners is that buyers now are primarily buying either for shelter or for investment.  Investment buyers seldom purchase a luxury item (it’s safer to buy two small condos than one large one to hedge against vacancy).

For many condo sellers, now may just not be the right time to sell. On the other hand, if you’re moving up, now may be the ideal time since prices in the higher priced homes are fairly soft compared to “normal”.

Right now in Santa Clara County (which is the bulk of the “Silicon Valley” area), there are 3392 houses available (not under contract) and there have been 853 which have closed in the last month.  That’s 3.98 months of inventory, or a seller’s market.  (There are 2668 which are under contract, but many are short sales which may never close escrow.)  Four months of inventory for the county is pretty strong overall.

For condominiums and townhouses in Santa Clara County, there are currently 1406 on the market and 289 which have sold/closed in the last month, giving us 4.87 months of inventory, which is technically a seller’s market but is very close to a balanced market. (There are 1096 pendings.)  The average “days on market” for the solds vary from about 50 days to about 115 days, depending on whether or not it’s a distressed sale.

Whether a home is in a buyer’s or seller’s market depends largely on its location, price point and sales type.  It is easiest to sell a home which is a “regular sale” situation, harder to sell a bank owned home and hardest to sell a short sale listing.  It’s easier to sell entry level priced houses, harder to sell luxury townhouses or condominiums.

For information on your part of the Silicon Valley real estate market, please email or phone me today!

In Almaden Valley, like in other parts of San Jose and Silicon Valley, some parts of “the market” are hotter than  others.  The real estate sweet spot appears to be homes priced in either the entry level or move-up markets – but things cool considerably as the homes become more elegant, grand and luxurious.  (This appears to be true across all of Santa Clara County: the most affordable homes are still the hottest segment of the realty market.)

Months of Inventory in Almaden Valley

Here’s how the current inventory and sales breaks down, together with the months of inventory, for the Almaden Valley part of San Jose (95120 zip code). Info from MLS Listings deemed accurate but not guaranteed. The “closed” column represents homes closed (houses & duet homes) in the last month.

As you can see, up to about $1,200,000 it’s a very strong seller’s market with less than 2 months of inventory. But beyond that price point, it’s suddenly a completely different market and is instead a very strong buyer’s market.

What about distressed property sales in Almaden?

There are almost no bank owned properties currently for sale or recently closed in Almaden – just 1 in the entry level price band which is currently listed for sale.

There are not many short sales in Almaden: right now just 5 for sale: 3 in the lowest of these five price groups, 1 in the 2nd lowest and one in the highest. Closings among short sales are also few in number: 2 in the lowest price point and one in the second lowest.  The absorption rate or months of inventory among short sales was 1.5 in the lowest price point and 1 month in the second lowest. No closings among higher priced homes that were also short sales in the last month.

How About Home Prices in Almaden?

Altos Research (to which I have a subscription) has a wonderful system of charts which can display the market data in a wide variety of ways, but please be aware that they track list prices, not sold prices.

Here’s a look at the Median List Price of all Almaden Valley houses & duet homes over the last three years:

Notice all those dips? Now look at the dates – they all occur in January or in winter. It’s very consistent. So is the upswing in prices which follows. So to a degree, the up & down is somewhat predicatble or “seasonal”. We tend to see the lowest prices in winter – that’s true for most of Silicon Valley. It’s just that normally – if you were to track 30 years or so – you’d see that most of the time the overall movement in price is up, rather than down. It looks like the downward trend may be getting reversed, but it will take more time and data to confirm that.

Next, the same data but broken down into four equal price points or quartiles.

Taken together, the dips seem a little milder than might be accurate. Here’s just the top tier, median list price in Almaden:

Upper-middle tier:

Lower-middle tier:

And finally, the bottom tier:

Taken by themselves, the median list prices seem to be pretty negative news, though there’s now an “uptick” in progress.

Almaden Valley Days on Market

If we look at the days on market (which is a helpful number, but not as strong as the absorption rate), we see the drama that is our market change in much of the Almaden area. This next chart displays all price quartiles combined.

This is much more than a little reversal or a seasonally predicted trend. Let’s see how it plays out if we break down the quartiles separately:

It looks a bit chaotic, but please note that all four price groups are displaying the same change in the last few months – a very sudden, steep drop in the days on market or DOM. You may also be able to make out that the DOM tends to peak each year in the winter season. This part is normal and seasonally expected. What’s not normal is the “falling off the cliff” kind of change which is being experienced in all price points.

Inventory of Almaden Valley Homes for Sale

Almaden inventory of homes for sale, too, is a little reminiscent of the Giant Dipper over at the Boardwalk in Santa Cruz – lots of steep ups and downs over the last 3 years:

Each of the four quartiles has identical inventory patterns, so it is not helpful to break this one down by group.

Market Action Index in Almaden

Altos has its own proprietary “Market Action Index” by which they note if the market is more in the buyer’s or seller’s favor. For the Altos MAI, 30 is the cutoff – below that is a buyer’s market, and above that is a seller’s market. Here’s the MAI for all price points combined or “Almaden as a whole”

As a group (above), it’s very much a buyer’s market. But how about by price quartile?

Still a buyer’s market, but better for the less expensive homes, just as we saw when viewing the absorption rate or months of inventory at the beginning of this post. It might be clearer if we looked at a smaller window of time. Let’s see just the last 6 months:

Interesting that the upper middle (2nd from top) had been the “best” and has now fallen to second worst position. The very worst is reserved for the most expensive homes, which we also saw with the absorption rates.

Of all four price points, the lowest (or most affordable) is the one that seems to be improving the most. So we’ll see if this continues and it pushes through to hit the number where Altos would (also) call it a seller’s market. Based on the absorption rates shared at the beginning of this post, I would say that it already is a seller’s market in the bottom price points of the Almaden Valley real estate market. Conversely, the luxury home market in Almaden is taking a beating right now.

Get Historical Data on the Almaden Valley Realty Market

Want more information, with historical data on the Almaden Valley real estate market trends and statistics? Or data on the condominium & townhouse market in Almaden?  Please visit my Real Estate Report page for Almaden Valley homes, which is automatically updated monthly and contains monthly, quarterly and annual info dating back to 2001.

Find Almaden Valley Homes for Sale Now

What’s on the market or listed for sale in Almaden Valley right now?  Do a “real time” search that reqires no registration!

Search Almaden Valley Homes for Sale

Additionally, you may also search for homes by map.  This may appeal to you more if you want to be near a particular school, park, the community center, or any other landmark in 95120.

Search Almaden real estate for sale by map

If you search by map, the link above will pull up most or all of San Jose.  Almaden will be in the lower right corner of the map.

Just browsing? You can also view a list of homes for sale by price range
Almaden Valley Homes under $1,000,000
Almaden Valley Homes between $1,000,000 and $2,000,000
Almaden Valley Homes $2,000,000 and up

The condominium & townhouse market is improving dramatically now.  It is evident both in looking at the stats countywide and in my recent experiences holding open my townhouse listings in Saratoga and Sunnyvale as well as recently participating in the sale of a townhome in Almaden Valley (representing a buyer) – all different areas and price points but all very active.

Here are the numbers for May sales of condos and townhomes for all of Santa Clara  County:

As you can see, the days on market are shrinking and prices (both median and average) are rising.  A few numbers cut back slightly in May: the sale to list price ratio retreated a little to 99.9% and the pending properties went down a little too.  But the number of sales were up.

The “months of inventory” or absorption rate is a great way to know how much of a buyer’s or seller’s market it is in any given place. Six months is considered balanced, less is a seller’s market and more is a buyer’s market.  Here are the months of inventory for selected communities in the “west valley” area of Silicon Valley – they are all “seller’s markets”, but some are strong and some are approaching balanced:

Of course, this is still painting with a broad brush.  The absorption rate for any of these areas may not be accurate for the various price points or school districts that might be found there.  For instance, a large luxury townhouse in Los Gatos which is downtown might be a really different type of market than a small, entry level one bordering Campbell or Cambrian Park.

What everyone’s wondering is if this seller’s market for condominiums and townhouses will continue despite the end of the federal home buyer credit.  To utilize that credit, homes had to be in contract by April 30th.  Most of those should be closed now, or nearing that date at best.  So we’ll really know more as we move into summer. My sense, though, is that what’s driving this market is much more the affordable prices of homes and of loans. The credits are a bonus, but many in Silicon Valley make too much money to be able to use them.

For information on your particular part of the Silicon Valley condo or townhome market, please give me a call or email me!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The Los Gatos real estate market appears to remain a ” buyer’s market”, but it entirely depends on which part of the Los Gatos market you’re discussing.

This post will cover:

• single family homes (99% houses, but a few duet homes)
• 95030 and 95032 zip codes
• Two high school districts:
  • Los Gatos Saratoga High School District (meaning Los Gatos High School)
  • Campbell Union High School District (meaning Westmont or Leigh High Schools)
• varying price points in all of the above

General comments:
Most of 95030 is in the Los Gatos Saratoga High School District, but there is a very, very tiny portion of it which belongs to the Campbell Union High School District.  The percentage is so small as to be statistically insignificant, but I wanted to mention it here for the sake of accuracy and I will include it below.  The numbers below are from our MLS provider, MLSListings.com, with the numbers crunched by me, Mary Pope-Handy.  While I have made every effort to be 100% accurate, I do not guarantee it (don’t sure me if there’s a typo or other error!).

Overview of the basic numbers and months of inventory for the housing market in the town of Los Gatos overall  - homes for sale, pending sales, and closed sales within the last month:

It appears to be a buyer’s market, which is true for much of the town, but not all of it.  There is variation to a phenomenal degree depending on price point, zip code, and school district.  Below we’ll look at all of it and see market conditions for each segment.
Let’s view the data by zip codes and by high school district:

The number of pendings can show where the market’s going – in many parts of the town, the number of pendings exceeds the number of recently closed homes.  In some parts of Silicon Valley, this is due to a high volume of short sales which are pending, but never actually close escrow. Here in LG, there are very few distressed properties on the market, so it does not appear to be the root cause of more pendings than closeds. Instead, the high number of pendings in some areas seem to point to an uptick of market activity.  This is really atypical for August (normally August is a very slow month for sales compared to earlier in the summer).

So, the market is heating up.  Also of note is that It has been VERY hard to sell a home that’s not “in the schools”. This is witnessed by the fact that almost nothing has closed recently.

Now let’s break it down by both price point AND by high school district in Los Gatos (95030 and 95032 zip codes merged):

This is interesting because there are two “sweet spots” in the Los Gatos housing market, both of the “in the schools”. First is the group of homes for sale in the Los Gatos School District which are listed at under $1,000,000.  As prices rise, the months of inventory grows from 3.75 to 6 to 8.25.  But then between $2 million and $3 million, there was a spurt of sales activity with 4 closings recently and only 15 available.   Both of these sweet spots have only 3.75 months of inventory right now.

At the other extreme is the reality of the market not in the Los Gatos School District. About 2/3 of the market is in these areas further from downtown, but homes with Leigh High School and Westmont High School have simply not been selling well right and closing this summer. Oddly, the market is less bad in the higher price ranges – perhaps because those owners are not as worried about schools (and are making use of private schools?  about 1/3 of all students who reside in Los Gatos attend private schools – perhaps the bulk is in 95032?)   BUT look at the pendings and you’ll find that the market is improving in this part of the town significantly.  A month from now we should see a far less dismal report for Los Gatos homes in the Campbell Union High School District.

The Los Gatos real estate market has many nuances in addition to factors such as schools and zip code.  We could dissect the market by any number of factors, from the distressed properties (which do sell for less) to those which views, acreage, historic homes, etc.  When you are thinking of buying or selling a home in Los Gatos, do not simply accept the overview of the town as necessarily relevant to your particular situation.  It is imperative to get the data on your part of the market and to understand what that data actually means.  From the study above, you can see that part of the Los Gatos real estate market is a strong seller’s market (3.25 months of inventory) and others have more than a 2 year supply of inventory (extremely deep buyer’s market).  Not understanding where in the spread your home or desired home sits could literally cost you dearly as you mis-position your home or your offer relative to the market conditions.

If you’re interested in buying or selling a Los Gatos house, townhome or condo, please call me.  If we work together to market your home or purchase a home, I will do my best to assist you in getting the clearest possible picture of the particular segment of the market that relates to you and your situation.

We may be in a recession with 11% local unemployment, but affordable homes are getting scooped up with multiple offers and in many areas, inventory is shrinking.

Today we’ll look at five areas of San Jose which offer at least some, if not mostly, entry level housing: Blossom Valley, Cambrian Park, Evergreen, Santa Teresa and South San Jose.

Evergreen does have some high-end housing in Silver Creek and elsewhere, but it also provides some very affordable homes for first time home buyers.  Cambrian Park is mostly middle class but it, too, has some McMansions (original Cambrian Park tract with large lots and very old homes that are not infrequently bulldozed) and some homes with views (Vista Loop area, bordering Los Gatos and Almaden Valley).  Blossom Valley has some beautiful properties and many close to thecenics Santa Teresa Foothills.  Overall, though, these homes represent affordable or mid-range houses for sale in Silicon Valley.  When we look at them as a group, it gives a strong sense of what the market is doing generally.

The months of inventory reflect how long it would take the current inventory to be absorbed (or sold off) if no new inventory came on the market and sales continued at the current pace.  Six months is a balanced market.  Fewer represents a seller’s market and more reflects a buyer’s market.  As you can see, April shows a push in all five districts of San Jose into seller’s territory:

Why the change from buyer’s market to seller’s market?  South San Jose and Blossom Valley have been flooded with distressed property sales (though not as much as Alum Rock, which was almost exclusively short sales and bank owned real estate sales the first quarter of 2009), pushing prices down substantially and making home ownership affordable for many who were otherwise priced out of the market a few years ago.   Bargain-hunters have been scooping up these homes.  Prices are stable – approximately flat – so there’s not as much fear for further declines in pricing right now.

To keep it from being too busy, I rounded the numbers to the closest whole number.  Using exact numbers, the averages of these five areas by month is as follows:

Right now, buyers in many areas and price points looking for a home to purchase in Silicon Valley are frustrated with the lack of inventory (or appropriately priced inventory), so this graph will not be a suprise to many of them.

Sellers who are unable to get traffic or offers on their homes may find this baffling.  If the market is so “hot”, then why isn’t my home selling? If you are experiencing this market rejection, it’s not that your home isn’t sellable.  Most likely, it means that your price and condition are not realistic for today’s market – if your home is a normal (not short) sale.  Short sales are trickier as some agents refuse to show them since they are harder to close.

Some buyers are holding off, waiting for the next anticipated flood of short sales and bank owned properties.  How many will there be? We don’t know. It might change the market conditions entirely. Or it could be as significant as the local threat of pandemic from the swine flu.

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.

Normally I view real estate on a local, or even hyper-local, level. But I thought it might also be good to view the big picture and see San Jose as a whole – with nearly a million residents, it would provide quite a snapshot of how Silicon Valley real estate is doing.

Below, please find a graph reflecting the single family home and condo/townhouse market in San Jose as displayed by the absorption rate:

I find this rather remarkably positive – look at the consistent lowering of the months of inventory for both houses in San Jose as well as townhouses and condos in San Jose. It is a very strong, consistent trend city wide.

Why is it not making the papers?

That National Association of Realtors says that more than 6 months of inventory is a buyers market and less is a sellers market. So clearly, this IS a buyers market. But at this rate, will it continue to be one?

Let’s look at the data (care of the Real Estate Report, to which I subscribe). First, find the information for the single family home market in San Jose:

The number of sales is up, but prices continue to slide. Perhaps that’s why the absorption rate isn’t making the headlines.

Next, let’s check out the condominium and townhouse market in San Jose:

And again, prices are still falling – about a third, again, over last year. So it’s not yet time to break out the bubbly.

The improved months of inventory seems to be a harbinger of improvement, though. Are we near the bottom? Increased sales indicate that we just might be there.

Interested in buying or selling a home in San Jose, or elsewhere in Silicon Valley? Call or email me. I’m happy to do a free, no-obligation, initial consultation with you to discuss your wants, needs, and dreams.