Months of Inventory or Absorption Rate for Cupertino Real Estate

Cupertino is a red hot sellers’ market, but primarily or the most in the lower price ranges.  The higher the price of the home goes, generally speaking, the cooler the market gets.  Part of this is because Cupertino is not considered a luxury market.  Luxury homes are far more likely to be found in Los Altos and Saratoga than in Cupertino. Even so, there are areas, primarily in the foothills and west of Foothill Blvd., where high end homes can be found.

Yesterday afternoon I ran the “months of inventory” by price point in the city of Cupertino.  The absorption rate, or MOI, will tell us how long it would take for the current inventory to be totally absorbed by the market of buyers if no other homes came on the market.  The shorter the MOI is, the hotter the market is.  (Houses and duet homes only, not condos or town houses.)Have a look:

Houses up to $500,000: n/a (there aren’t any)
$500,000 to $999,999:    .2 Month of Inventory or MOI (2/10 of a month)
$1 million to $1,499,999: . 61 MOI
$1,500,000 to $1,999,999:   2.75 MOI
$2 million to $2,499,999:  infinite (3 homes for sale, none closed in last 30 days)
$2.5 million to $2,999,999: 1 MOI
$3 million and up:  n/a

It’s a little bit of a fluke that the 2.5—3 million group was “1”. There was one sale and it was just barely over the line – it sold for $2,505,000.  Had it slipped just a little bit, the group prior would have had 3 months of inventory (1 closing for 3 listings currently active). The trend is pretty clear: the higher the price, the longer homes take to be absorbed into the market.  We can fairly think of this segment as 3 months of inventory, which isn’t bad at all but is not “red hot”.

Hottest of the hot are houses listed for sale at under $1,000,000 in the city of Cupertino – they are flying off the market at .2 months of inventory, or about 1 week!  It cools as prices rise.

Cupertino Median List Prices Compared to Neighboring Saratoga, Sunnyvale and Los Altos

We know that the median sales price in Cupertino has been climbing steadily since March 1st (reflecting sales beginning in early February). How does it compare to nearby areas?

Los Altos is selling for the most of these 4 areas, but list prices are now falling. Saratoga was dippping but now rising again. Sunnyvale has been somewhat flat recently but improving. But Cupertino’s prices are making the steepest improvement. Perhaps these low prices are the drivers for the crazy hot market activity.

Cupertino median list price of houses by price quartile

Focusing just on Cupertino, let’s see how the information looks if we break it down into the pricing tier. Often the entry level houses are a very different “market” than the luxury homes segment.

The last few months have had some ups and downs in pricing, but most segments of the Cupertino real estate market have seen an uptick since early Feb (when the market seemed to turn on a dime for the west valley communities with the best schools).  The luxury market in Cupertino has been a little slower to see improvement but it is registering there now, too.

What if we look back more than a year? Combining the quartiles, the trends look pretty volatile:

What’s happening with the most expensive homes for sale in Cupertino?  They have had a rough time of it – but currently there’s an uptick in the market at this price point. Here’s the same data just for the top quartile, the most expensive properties (luxury homes segment):

For the 2nd top tier (upper middle):

3rd level or lower middle:

And most affordable Cupertino houses or lowest quartile:

Cupertino Days on Market by Price Quartile: What’s Selling Fastest

Not surprisingly, the luxury market has had a harder time selling than entry level houses in Cupertino. This is true for most of the West Valley areas of Santa Clara County. Here’s a look at the days on market (DOM) for Cupertino by price point over the last year.

Remember, all real estate is local. For information on your exact area or price point, please contact me. I work with my clients to pinpoint the pricing.

What drives the Cupertino real estate market?

The residential real estate market in Cupertino, California, is driven in large part by the extremely high quality of its local public schools.  Many in Silicon Valley would state that for San Jose area home buyers, Cupertino offers the best “bang for the buck” when one lines up the cost of purchasing a home to the schools’ API scores. (Conversely, some residents are concerned that the very top schools – including but not limited to Cupertino – are so focused on academics that there may be too much pressure on kids and may lack balance for them.)

Other drivers are, of course, the local economy (such as the initial public offerings happening with some of the Silicon Valley tech giants), the availability of more affordable financing, and how the realty market in general is performing for any particular price point or particular school area. (Even within Cupertino, some schools are much more in demand than others.)  Comments in this article refer generally to this city of about 50,000 residents – real estate is local, though, so for precise information in any given area or tier of the market, please contact me!

Houses for sale in Cupertino California

Please browse houses for sale in Cupertino, listed from the lowest prices up to the highest.

Showing properties 1 - 5 of 28. See more city of Cupertino real estate.
(all data current as of 5/25/2012)

1. $759,000 : 10650 Minette Dr, Cupertino
   
   3 beds, 1 full bath

   Home size: 1,048 sq ft

   Lot size: 5,600 sqft
   
2. $899,000 : 10326 Byrne Av, Cupertino
   
   2 beds, 1 full bath

   Home size: 840 sq ft

   Lot size: 7,375 sqft
   
3. $939,888 : 20237 Bollinger Rd, Cupertino
   
   3 beds, 2 full baths

   Home size: 1,688 sq ft

   Lot size: 7,500 sqft
   
4. $949,900 : 20345 Via Volante, Cupertino
   
   3 beds, 2 full, 1 part baths

   Home size: 2,167 sq ft

   Lot size: 2,613 sqft
   
5. $990,000 : 10042 Byrne Av, Cupertino
   
   3 beds, 2 full, 1 part baths

   Home size: 1,616 sq ft

   Lot size: 2,356 sqft
   

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

San Jose’s Cambrian, or Cambrian Park, area is a very hot seller’s market.  Multiple offers are not uncommon, especially in the Union School District, where schools are trending upward.  My Cambrian Park Real Estate Report has just been published with the updated numbers from the closed sales in April. Please click on the link to see much more information there.

Prices are up nicely year over year! Inventory is crazy low – just 35 homes for sale in April compared to 57 in March and 84 in April 2011. Days on market is far lower too. All around, it is a deepening seller’s market.

Even stronger is the Cambrian condo market, which is skyrocketing!!!  Please see the Cambrian Condominium & Townhouse Real Estate Report for all of the numbers, but I’ll include a quick summary below.

Here again, notice the ratio of active to pending homes, the sale vs list price (over 100%), and most of all, the tremendous rise in both the average and median sales price.  Few homes closed escrow in February, so it is possible that these numbers are a little exaggerated.  We will know more in a month – if it’s a trend or if this is a fluke.

Now let’s work with Altos Research’s graphs and get a feel for the Cambrian realty market in “real time”.  These use list prices, whereas my REReport uses sold data.

First, the statistics by quartile for houses in San Jose 95118:

Next, the stats and trends by price quartile for houses in San Jose 95124:

Median list price of homes for sale in 95124 and 95118 (all quartiles combined):

Very interesting that the 95124 pricing appears to be swinging upward while the 95118 pricing continues to go down.  I believe that this is mainly because the schools in 95124 have been trending upward strongly with the API scores.  Prices are also at a higher level, and those are less impacted by short sales and REOs countywide.  So it may be the result of multiple factors.  (95124 is about 2/3 of the Cambrian real estate market.)

Inventory in Cambrian area of San Jose 95124, 95118:

Surprising, isn’t it, to see how differently these two San Jose zip codes are behaving from each other?

Average days on Market in San Jose’s Cambrian area

And again, really different trends on these neighboring zips, both in Cambrian!

Another anecdotal story to share: Recently I closed the sale on my listing at 5114 Nerissa Way in Cambrian with Union Schools and Alta Vista in particular. We were listed at $579,000 and received 4 offers and sold at $585,000. Interestingly, we received 2 nearly identical “best” offers, both at $585,000. One was completely As Is and the other was almost As Is (they wanted a fumigation and pest clearance provided).  That is usually a pretty good affirmation of market value, and the property did appraise at the sales price.  The other two offers we got were below list price.  One was all cash and it was extremely low.  Buyers who are purchasing without financing sometimes misunderstand the type of discount that their all-cash status will get for them, so sometimes the worst offers are all cash and that was the case this time.

Want more info on your neighborhood, your house, or your target home to buy? Please call me!

Showing properties 1 - 5 of 35. See more 95124 zip code real estate.
(all data current as of 5/25/2012)

1. $699,000 : 2757 Theresa Ln, San Jose
   
   3 beds, 2 full baths

   Home size: 1,563 sq ft

   Lot size: 8,580 sqft
   
2. $699,000 : 1898 Kay Dr, San Jose
   
   3 beds, 2 full baths

   Home size: 1,331 sq ft

   Lot size: 7,062 sqft
   
3. $1,299,999 : 14904 Leigh Av, San Jose
   
   4 beds, 3 full, 1 part baths

   Home size: 3,340 sq ft

   Lot size: 10,125 sqft
   
4. $682,950 : 3591 Gavota Av, San Jose
   
   3 beds, 2 full baths

   Home size: 1,600 sq ft

   Lot size: 7,500 sqft
   
5. $1,180,000 : 1777 Kirkmont Dr, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 2,306 sq ft

   Lot size: 8,249 sqft
   

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

Showing properties 1 - 5 of 24. See more 95118 zip code real estate.
(all data current as of 5/25/2012)

1. $829,950 : 1259 Bryan Av, San Jose
   
   5 beds, 3 full baths

   Home size: 2,238 sq ft

   Lot size: 8,050 sqft
   
2. $670,000 : 4241 Ranwick Ct, San Jose
   
   4 beds, 3 full baths

   Home size: 2,199 sq ft

   Lot size: 5,000 sqft
   
3. $785,000 : 3339 Beacon Ln, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 1,952 sq ft

   Lot size: 6,784 sqft
   
4. $998,000 : 5715 Mireille Dr, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 2,000 sq ft

   Lot size: 6,566 sqft
   
5. $649,000 : 1373 Adobe Ct, San Jose
   
   4 beds, 2 full baths

   Home size: 1,966 sq ft

   Lot size: 8,800 sqft
   

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

Browse lists of Cambrian & Cambrian Park homes for sale:
Houses for sale in the 95118 part of Cambrian
Cambrian Park Houses for Sale in 95124

Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: “Get The Best Deal When Selling Your Home In Silicon Valley”
408 204-7673 (Cell)
emailto: Mary (at) PopeHandy.com
Blog: www.LiveInLosGatos.com & www.ValleyOfHeartsDelight.com

How’s the Saratoga California real estate market?

Today we’ll look at the monthly sales numbers for Saratoga, CA 95070 and also view live charts reflecting homes listed for sale on the MLS. Both houses and condos/townhomes will be considered as will varying price quartiles via the live charts.

Monthly Real Estate Update for Saratoga – prices of houses rising:

As with much of the “west valley”, the Saratoga, CA real estate market is a seller’s market, but it does not appear quite so overheated as neighboring – and far more affordable – Cupertino right now. Unlike many other areas, though, inventory is a little looser and is up month over month (which is seasonally expected) and year over year (not a seasonal issue, of course). 

Here are the real estate sales statistics for closed sales in March 2012 among houses in the 95070 zip code (click on link to read the full Saratoga Real Estate Report for houses):

And February

The median sales price, which is the number indicating that half of the homes sold for more and half less than this number, has risen almost 8% from a year ago.  This implies that more expensive homes are selling – and possibly that home values are rising too. The average is also up about the same amount year over year.

Next, please find the basic statistics for closed sales in February 2012 among townhouses & condominiums in the 95070 zip code (see the Saratoga Real Estate Report for condos & townhomes):

And February

To really understand the condo and townhouse market it’s better to see actual sales and compare them quarter by quarter, using similar units.  If you are interested in buying or selling a condo or townhouse in Saratoga, don’t go it alone or rely on online stats – give me a call and we will crunch the numbers specifically for your home and pinpoint the pricing.

Median List Prices of Saratoga Homes for Sale

First, a graph displaying the overview of the median list prices for condominiums and single family homes in Saratoga – all price quartiles combined:

In general, the seller’s market is showing itself for houses in the fact that list prices are rising.  Not so with condo and townhouse pricing. That’s a much cooler market.

Next, the median list prices for single family homes with a breakdown by price quartile. (Please note that the info would be even more precise if broken down by school district, but this particular program doesn’t yet filter by schools.)

In most price points, the list prices are now rising slightly, but most of all in entry level homes. In the last few months we’ve seen the high end home sales start to pick up in Saratoga, with a good run up in late 2010 before sliding earlier.  Starting to improve now, though.

And now, list price of condos by price quartiles.

Interestingly, the condo market is not enjoying at all the decent seller’s market seen among houses in this city.  Every price point appears to be suffering, but the high end most of all.

Inventory of both houses & condos in Saratoga

It’s seasonally typical to have more inventory in summer than other times of the year. Going back a few more years (see below), please note where the peaks are found – always sometime in summer. (Single family homes only.)

It’s less clear, but still visible, with condominiums and townhouses in Saratoga:

Average Days on Market for Saratoga Homes for Sale

Houses by quartile is not much different – DOM was rising across all price points and has been since August until spring, when the bottom and two quartiles (blue and green) reversed the trend. These are the “hotter”or improving segments of the market right now.

It is strangely disjointed in the Saratoga Condo market, though. I can’t explain why this had been so “all over the board” based on just this data. But since August, all four groups appear to be following the same general trend.

My suspicion is that the homes with the better schools are faring the best, but that’s just a hunch based on how well homes usually sell – it’s not provable with this info at hand.

If you’re interested in buying or selling a Saratoga home, please contact me. I’ll be happy to meet with you for a no obligation initial consultation.

Saratoga Real Estate Listings – Saratoga Homes for Sale – Condos, Townhouses & Houses for Sale in Saratoga

If you’d like to browse Saratoga homes for sale, I invite you to have a look here! Below please find all properties currently listed as available on our local MLS.  Please be advised that there are a number of different property types and school districts listed here.  For more precise information on houses, condos or town houses on the market, please contact me via email or complete a form at SiliconValleyHomeHunt.com or on my popehandy.com website.  Either way it will come to me and I will personally set up your search for a Saratoga property. (If you are moving to the South Bay area from far away, please also see my Silicon Valley relocation website for helpful tips.)

Showing properties 1 - 5 of 89. See more city of Saratoga real estate.
(all data current as of 5/25/2012)

1. $1,200,000 : 18564 Paseo Tierra, Saratoga
   
   3 beds, 3 full, 1 part baths

   Home size: 1,946 sq ft

   Lot size: 10,744 sqft
   
2. $2,498,000 : 18599 Avon Ln, Saratoga
   
   5 beds, 4 full baths

   Home size: 3,992 sq ft

   Lot size: 42,253 sqft
   
3. $1,198,000 : 20376 Knollwood Dr, Saratoga
   
   3 beds, 2 full baths

   Home size: 1,803 sq ft

   Lot size: 9,680 sqft
   
4. $1,550,000 : 13663 Howen Dr, Saratoga
   
   4 beds, 2 full, 1 part baths

   Home size: 2,128 sq ft

   Lot size: 10,370 sqft
   
5. $1,898,000 : 19171 Allendale Av, Saratoga
   
   5 beds, 3 full baths

   Home size: 3,306 sq ft

   Lot size: 23,220 sqft
   

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

Interested in buying or selling a home in Saratoga?  I grew up there (and in Santa Clara), graduated from Saratoga High before heading off to college, and have been selling homes in Saratoga and nearby parts of Santa Clara County & Silicon Valley since 1993.  I understand the impact of Saratoga’s school districts on home buying decisions, the importance of various locations to market value, and resale concerns that can improve or detract from your return on investment.

Read more about my background on the Valley of Hearts Delight website (sister site to this blog) and learn why my past clients and other readers of the San Jose Mercury News named me “best real estate agent in Silicon Valley” in 2011. There you’ll also see my accomplishments/honors/awards, info on sales experience, and more. 

Or just take a moment to phone me at 408 204-7673, or email me at mary (at) popehandy (dot) com.  If you prefer, you can simply fill out a form online instead.

How’s the real estate market in the Willow Glen area of San Jose?  Like the greater Silicon Valley region, Willow Glen is comprised of many smaller micro-markets.  It will be different in north Willow Glen, Palm Haven or in a walk-to-town area than it will be in the Dry Creek area or St. Francis Woods neighborhood – let alone differences for school districts, price point, sale type (regular versus short sale or bank owned), zip code and home type!  It’s a patchwork of all these smaller markets, in other words.  What’s happening in one segment might be very different than in another.

Today’s post will be the broad view of Willow Glen and comments may not apply to your specific property – for info on your neighborhood, call or email me!

Disclaimers aside, overall it is a seller’s market in Willow Glen right now, but it’s cooler than other areas with better schools such as Almaden, Cambrian and Cupertino and not everything is selling (and certainly not getting the prices that many sellers want).  The best homes (best condition, pricing, marketing and regular sale) are selling in 1-3 weeks.

Below are the basic numbers, stats and trends from the closed sales of houses in March

and in February:

And next, of Willow Glen condos, where it’s been a cold buyer’s market but recently heated up:

Next, February…

What about home prices in Willow Glen?

Below please find the Altos Charts (to which I have a subscription). NB Altos uses LIST prices, not solds (also they go by zips or cities, so don’t cover Willow Glen per se with it’s partial entry into the 95124 zip).

1 – Houses in the 95125 zip code – history, all prices combined.

2 – Houses in the San Jose, 95125 zip code, by price quartile over last 180 days

3 – Condominiums and townhouses in Willow Glen, San Jose 95125 – all quartiles combined over the last few years for median list price:

4 – Condo and townhomes, median list price, by quartile, last 180 days only:

It is interesting to see the rise in list prices here as opposed to the overall DROP in sales prices we saw on the RE Report. Of course this could be a function of all kinds of things, including the impact of distressed sales.

All kinds of things can impact the probable buyer’s market for a particular house or home, but especially distressed sales nearby. For information on what the market is doing in your exact neighborhood, please call or email me today.

Willow Glen homes for sale

Browse residential properties – houses, duet homes, condos and townhomes in Willow Glen which are listed for sale on the MLS by type below.

1. Listings of houses for sale in Willow Glen, San Jose 95125

Showing properties 1 - 5 of 59. See more 95125 zip code real estate.
(all data current as of 5/25/2012)

1. $329,000 : 788 Delmas Av, San Jose
   
   4 beds, 2 full baths

   Home size: 1,218 sq ft

   Lot size: 5,382 sqft
   
2. $779,000 : 2499 Booksin Av, San Jose
   
   3 beds, 2 full baths

   Home size: 1,523 sq ft

   Lot size: 6,098 sqft
   
3. $779,000 : 823 Romani Ct, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 2,429 sq ft

   Lot size: 3,600 sqft
   
4. $1,925,000 : 1674 Mulberry Ln, San Jose
   
   4 beds, 3 full baths

   Home size: 2,862 sq ft

   Lot size: 10,070 sqft
   
5. $899,000 : 1712 Isabel Dr, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 1,944 sq ft

   Lot size: 8,925 sqft
   

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

Showing properties 1 - 5 of 7. See more 95125 zip code real estate.
(all data current as of 5/25/2012)

1. $659,000 : 1705 Cherryhills Ln, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 2,000 sq ft

   Lot size: 2,128 sqft
   
2. $669,900 : 1578 Whiterock Ci, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 2,010 sq ft

   Lot size: 2,225 sqft
   
3. $519,900 : 676 Willow St, San Jose
   
   2 beds, 2 full, 1 part baths

   Home size: 1,376 sq ft

   Lot size: 1,306 sqft
   
4. $773,500 : 1624 Sparkling Wy, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 1,954 sq ft

   Lot size: 2,128 sqft
   
5. $595,000 : 1613 Sparkling Wy, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 1,954 sq ft

   Lot size: 2,128 sqft
   

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

3. Listings of condominiums (condos) for sale in Willow Glen, San Jose 95125

Showing properties 1 - 2 of 2. See more 95125 zip code real estate.
(all data current as of 5/25/2012)

1. $345,000 : 2132 Sunstruck Ct, San Jose
   
   2 beds, 2 full baths

   Home size: 1,144 sq ft

   Lot size: 1,566 sqft
   
2. $299,000 : 509 Dix Wy, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 1,426 sq ft

   Lot size: 2,116 sqft
   

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

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!

Multiple offers have returned to many segments of the Silicon Valley real estate market.  We are hearing about them in Palo Alto, Cupertino, Mountain View – areas where newly minted IPO money is having an impact – but also in more modest, middle class areas such as San Jose’s Cambrian neighborhood. The trend appears to be spreading.

What Silicon Valley home sellers need to know and do to attract multiple offers

If you’re a Silicon Valley home seller, what do you need to know to try to get multiples on your home?  What should you beware of?  In short, here’s what needs to happen if you want to attract multiple offers on your home for sale:

1. The home must be turnkey, either fully remodeled or close to it – it must look like there’s nothing or very little for a buyer to do.  In addition to being turnkey, it must be squeaky clean and well staged! It needs to be comfortable – not too hot, not too cold. You want buyers and their agent to linger longer.
   
2. The price must be at or even under market value.  That is, you must be willing to price it aggressively.  Think it’s worth $1,050,000?  You might list it at $999,999 to get in under a major price threshold and to be the very best, most attractive property for the money. Yes, it might be under priced.  Over priced listings get either one offer at best or, more likely, none at all.
3. The property must be highly accessible. If it is hard to see, you probably won’t get multiple offers (and may get none at all).  (Please see articles on accessibility and on open houses.)
4. Finally, the property must be well marketed.  This includes a wide range of factors ranging from photographs, text, fliers, signs, and even the commission rate offered to the buyer’s side.

What Silicon Valley home buyers need to know and do to compete with multiple offers

If you’re a Silicon Valley home buyer, how do you win out in multiples without giving away all of your rights or overpaying for your house/home?

Over the last few years, I’ve written a number of articles about multiple offers and tips for buyers when competing (concepts to beware of, issues around contingencies, financing and more).  This is a bit like a multi-chapter ebook on how to work with multiple offers.  I hope it’s helpful!

By way of quick summary: you must cover a few areas very, very well:

1. You must be pre-approved by a reputable lender (fully pre-approved)
2. You must have a strong down payment (20% or more)
3. You must be willing to put 3% down for your initial deposit (also called a good faith deposit)
4. You must have a good agent helping you – he or she must do a good job completing the paperwork (it needs to be thorough and without any major mistakes), must communicate well with the listing agent and represent you and himself/herself as a great team with which the listing agent and sellers will want to work
5. You must have an excellent sense of pricing.  Your Realtor should “run the comps” for you, or may even prepare a competitive or comparative market analysis on the home you wish to purchase.  Pay attention to where the value  lies – sometimes that has little to do with the list price!
6. Be prepared to balance out the price and terms offered so that you do not feel like you are giving away all your rights.  Some real estate agents may push consumers to write contracts with no contingencies for home inspection, property condition, appraisal or finance.  I believe that this is a risky and unwarranted practice – but learn about it since your competitors may be doing this.
7. Read all of the articles below – they are here to help you!

Tips for Writing a Competitive Offer  Part One

Writing an Offer in a Multiples Situation? Financing Tips Part 2

Writing Strong Offers: More Financing Tips Part 3

Tips for Home Buyers Competing Against Multiple Offers – More Financing Tips Part 4

Competing Against Multiple Offers: Contingencies and Timeframes Part 5

Real Estate Purchase Offer Terms to Consider When Competing in Multiple Offers  Part 6

Sometimes the List Price Isn’t the Expected Sales Price, So Run Comps!

The Advantages of Presenting and Receiving Offers In Person

Interested in working with an agent who’s highly experienced with multiple offers?  Call or email me today!

Often on this blog we look at specific, hyper local real estate markets in Santa Clara County (as with Saratoga, Campbell, Los Gatos, or even a larger city such as San Jose – or parts of it such as Almaden or Cambrian – or even subsets of any of those). Today, though, we’ll check in on Santa Clara County as a whole, which is home to 1.8 million people and many diverse markets.

The number of homes being sold in Silicon Valley is trending upward now. Prices, though, while higher than a month ago are down about 5.4% from a year before. Let’s see it visually:

Pricing of houses sold in Santa Clara County

Both median and average sales prices are shown in the graph below (which is from the printable version of my Santa Clara County Real Estate Report; you can also view an online version at popehandy.rereport.com). Note the trends with several “peaks and valleys” over the last five years or so.

To check on particular areas within the county, please visit my RE Report and select the city, town, or area within San Jose that you want to better understand.

Homes in Saratoga, CA: real estate market trends and statistics for houses as well as condominiums and townhouses.

The real estate market in Saratoga improved a bit last month. But, as always, it really depends on what subset of the market you’re considering. It will be much different between price points, for instance (as well as between school districts, proximity to town, views, acreage, etc.). Today we’ll review the broad trends in Saratoga 95070 to get a general feel for the conditions but this could be very different for the home you own or want to purchase because real estate is always very local.

Let’s start with the months of inventory, or the absorption rate. I ran the numbers from MLSListings.com, our mls provider, this afternoon. The numbers below reflect all houses (or duet homes) in Saratoga, CA 95070. With months of inventory, the lower the figure the “hotter” the market or the more in the seller’s favor it is. Six months is said to be balanced. For Saratoga as a whole, there are 4.17 months of inventory or MOI right now. That’s not bad. It’s a seller’s market but not strongly so. But what if we look at subsets of the market? Let’s try it by price point.

We could drill this data down by any number of factors to see what the hyper local’s market climate would be like. The mix could include sale type (distressed properties, short sales, bank owned homes vs “regular sales”), various school districts, a “walk to town” location, horse properties, homes with views, newer construction, historic homes. etc.

Schools are always a big deal in terms of market drivers. Saratoga has 3 high school districts and 4 elementary school districts, and understanding those boundaries can make buyers a little crazy. Anyway let’s tease this out just a tad by looking at the MOI for Saratoga by high school district to see what we get.

• Homes feeding to the Los Gatos – Saratoga Joint Union High School District (Saratoga High) have 4.71 months of inventory (a bit cool but still in the seller’s favor)
• Houses which belong to the Campbell Union High School District (Prospect High School) have 3.71 months of inventory
• Properties in the attendance area of the Fremont Union High School District (Cupertino school, Lynbrook High School in Saratoga) enjoy 2.5 months of inventory (a pretty good, strong seller’s market)

Why such a big discrepancy, and why are homes in the Prospect High area selling so much better than those in the Saratoga High area? I believe that the answer has to do with the graph above – most of the homes in the Prospect and Lynbrook attendance areas are more affordable than those in the Saratoga High area, and as we know, the more expensive houses for sale in Saratoga are having some trouble selling. Unless we pulled these out by both school district and price point (and perhaps more factors, too), we can’t be sure but I think it’s the most likely cause.

Overall, though, we can see that in Saratoga right now it’s a whole lot easier to sell homes under $2,000,000 than over. Interestingly, it’s slightly easier to sell a home between $1 million and $2 million rather than lower than that. I believe that’s because homes under that price point are not in the highly prized Saratoga (or Cupertino) school area.

Right now, high end or luxury homes in Saratoga are difficult to sell. This will be more true if there are any “issues” (such as being too close to high voltage power lines or a noisy location). This may change. With the recent IPO of LinkedIn, there may be some newly minted millionaires who will not find the commute from Saratoga to be too far. They cannot buy just yet, but in a few months we may see an improvement in the market of these upper tier price levels. Watch this spot!

Luxury or estate home buyers: if you are looking to purchase a home upwards of $2,000,000, you might consider doing it before you are competing with Linked In money. Just a thought.

Next, let’s look at the most current REReport for Saratoga, using the closed sales from April. This month’s closed numbers will be available about 6-10 days into next month.

It has been a mixed bag in the Saratoga real estate market with both the median sales price and average sales price slipping until recently; pending sales were up, though, and closed sales were flat. Overall, it’s still a buyer’s market there. (Click on the link for a full report.)

Median List Prices of Saratoga Homes for Sale

First, a graph displaying the overview of the median list prices for condominiums and single family homes in Saratoga – all price quartiles combined:

In general, the seller’s market is showing itself for houses in the fact that list prices are rising. Not so with condo and townhouse pricing. That’s a much cooler market.

Next, the median list prices for single family homes with a breakdown by price quartile. (Please note that the info would be even more precise if broken down by school district, but this particular program doesn’t yet filter by schools.)

In most price points, the list prices are now rising slightly, but most of all in entry level homes. In the last few months we’ve seen the high end home sales start to pick up in Saratoga, with a good run up in late 2010 before sliding earlier. Starting to improve now, though.

And now, list price of condos by price quartiles.

Interestingly, the condo market is not enjoying at all the decent seller’s market seen among houses in this city. Every price point appears to be suffering, but the high end most of all.

Inventory of both houses & condos in Saratoga

It’s seasonally typical to have more inventory in summer than other times of the year. Going back a few more years (see below), please note where the peaks are found – always sometime in summer. (Single family homes only.)

It’s less clear, but still visible, with condominiums and townhouses in Saratoga:

Average Days on Market for Saratoga Homes for Sale

Houses by quartile is not much different – DOM was rising across all price points and has been since August until spring, when the bottom and two quartiles (blue and green) reversed the trend. These are the “hotter”or improving segments of the market right now.

It is strangely disjointed in the Saratoga Condo market, though. I can’t explain why this had been so “all over the board” based on just this data. But since August, all four groups appear to be following the same general trend.

My suspicion is that the homes with the better schools are faring the best, but that’s just a hunch based on how well homes usually sell – it’s not provable with this info at hand.

If you’re interested in buying or selling a Saratoga home, please contact me. I’ll be happy to meet with you for a no obligation initial consultation.

Saratoga Real Estate Listings – Saratoga Homes for Sale – Condos, Townhouses & Houses for Sale in Saratoga

If you’d like to browse Saratoga homes for sale, I invite you to have a look here! Below please find all properties currently listed as available on our local MLS. Please be advised that there are a number of different property types and school districts listed here. For more precise information on houses, condos or town houses on the market, please contact me via email or complete a form at SiliconValleyHomeHunt.com or on my popehandy.com website. Either way it will come to me and I will personally set up your search for a Saratoga property. (If you are moving to the South Bay area from far away, please also see my Silicon Valley relocation website for helpful tips.)

Showing properties 1 - 5 of 89. See more city of Saratoga real estate.
(all data current as of 5/25/2012)

1. $1,200,000 : 18564 Paseo Tierra, Saratoga
   
   3 beds, 3 full, 1 part baths

   Home size: 1,946 sq ft

   Lot size: 10,744 sqft
   
2. $2,498,000 : 18599 Avon Ln, Saratoga
   
   5 beds, 4 full baths

   Home size: 3,992 sq ft

   Lot size: 42,253 sqft
   
3. $1,198,000 : 20376 Knollwood Dr, Saratoga
   
   3 beds, 2 full baths

   Home size: 1,803 sq ft

   Lot size: 9,680 sqft
   
4. $1,550,000 : 13663 Howen Dr, Saratoga
   
   4 beds, 2 full, 1 part baths

   Home size: 2,128 sq ft

   Lot size: 10,370 sqft
   
5. $1,898,000 : 19171 Allendale Av, Saratoga
   
   5 beds, 3 full baths

   Home size: 3,306 sq ft

   Lot size: 23,220 sqft
   

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

The exquisite Saratoga Oaks neighborhood is nestled between downtown Saratoga and the beautiful coastal foothills, close to the famed Hakone Gardens.  With both pools and tennis courts and a location just a block or so from tony Saratoga Village (click to see slide show), it is resort living in Silicon Valley at its finest. But this is not just a place for retirees who want to downsize, though they are also drawn here – families with kids also move to Saratoga Oaks to make use of the top rated schools

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Which public schools serve this neighborhood?

Saratoga Oaks is within the very highly regarded Saratoga Union School District.  Although many other school districts in Santa Clara County assign children in homes to particular schools, Saratoga does not – it is an “open” school district. If there’s space and if the home is within the district, you may be able to chose which of the excellent Saratoga schools you wish for your student to attend. The nearest public school is Saratoga Elementary on Oak Street (API 958) but alternatively you may find enrollment instead at Foothill Elementary (API 943) or Argonaut (API 974).  The higher level schools are Redwood Middle School (API 972) and Saratoga High School (API 932).  All API scores listed here are from the 2010 County List of Schools. Additionally, there are two excellent private elementary schools nearby: Sacred Heart (Catholic) and St. Andrew’s (Episcopalian).

Where is Saratoga Oaks?

The Saratoga Oaks community is within the city of Saratoga, California, and is a part of Silicon Valley and what’s locally referred to as “the south bay” area.  It can be reached either via Springer Avenue, off of 4th Street in Saratoga or from Springer off of Big Basin Way (aka Hwy 9 or Congress Springs Road). This townhouse complex is literally where the town meets the hills – so it is not at all uncommon to find deer in the open spaces! Click on the map image to go to the live, interactable Google map.

What are the homes like in Saratoga Oaks?

Each residence is a townhouse, but size and condition of every property varies. In general, the layout inside is very good and “feels like” a house indoors rather than a townhouse. Most are two story units (there are a few single level homes) and many of them have the garage below the living areas since this is a hilly region. Most are close to 2,200 square feet in size (but it ranges from 1950 to over 2600 SF), with 2-3 bedrooms on average (though many include a sitting room as part of the master bedroom suite also).

Many of these homes have great views.  Some streets enjoy a higher elevation than others (Stoneridge is the highest) while others look out onto trees or other roofs, either of the two pools or the tennis courts. In general, homes here have a lot of windows – some models have glass floor to ceiling – to take full advantage of the vistas. This development was built between about 1973 and 1975.  So it’s not uncommon to find “popcorn ceilings”, original plumbing, single pane windows and other items which may need replacing. (If the furnace is original, it’s probably time to replace it.)

In some of the floorplans there are really large laundry rooms so many owners have moved the utilities to either a closet upstairs to to the garage and reclaimed the laundry room as a small office or computer room. Although this is not a “gated community”, Saratoga Oaks is quiet and there’s not a lot of traffic.  The noise that you might hear will likely come from exuberance at the pool or a vehicle on Big Basin Way.

Finally, these homes are located in a slightly hilly area, so some of the usual concerns around hillside homes apply here too. If you’d like to read more on this topic, please check out the following posts:

What To Consider When Buying a Hillside Home in Silicon Valley

Cracked Foundations, Adobe Clay Soils and Water in Silicon Valley

What does it cost to purchase a Saratoga Oaks Townhome?

Depending on the precise location (whether or not there’s a view, if it’s an end unit etc.), size, and condition of the townhouse, sales prices vary between the 700s to about 1.2 or more million. The Saratoga condo and townhouse real estate market is a cold buyer’s market right now, so it’s very tough for properties to push the upper limits of value at this time.

HOA Dues: I should add something that is sometimes a bit of a hidden cost, and that’s the home owner association dues, which are steep.  Because this communities has not just private roads and landscaping, but also tennis courts, two pools, beautiful oak trees to maintain, regular blanket insurance and also earthquake insurance, the amount of money paid to the HOA each month, if you include everything (insurance and dues) runs between $550/month to high 6s or more.  You could be paying $685 per month, in other words – larger units are charged more than the smaller ones.  If you see a very low (relatively) HOA fee, it probably is not including the required insurance fees, which are both “blanket” insurance and earthquake insurance for the complex. Head’s up on that.

In order to not miss any, I will include below all townhouses in Saratoga in this price range (displaying more than just Saratoga Oaks rather than missing any).  Sorry in advance for any confusion this may cause!

Showing properties 1 - 3 of 3. See more city of Saratoga real estate.
(all data current as of 5/25/2012)

1. $939,000 : 14593 Big Basin Wy, Saratoga
   
   3 beds, 2 full, 1 part baths

   Home size: 1,854 sq ft

   Lot size: 759 sqft
   
2. $839,000 : 20580 Oak Creek Ln, Saratoga
   
   3 beds, 2 full, 1 part baths

   Home size: 1,807 sq ft

   Lot size: 1,512 sqft
   
3. $859,000 : 14611 Oak St, Saratoga
   
   3 beds, 2 full, 1 part baths

   Home size: 1,556 sq ft

   Lot size: 920 sqft
   

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

Yesterday we looked at the types of home sales around Silicon Valley by price point.  Not terribly surprising, most of the short sales and bank owned homes were in the lowest price ranges.  Today we’ll look at this type of information not by pricing tier but instead by geography – in other words, by either town, city or district of San Jose (area).  This post will not cover every area but will be a sampling a few communities, mostly on the west side of the valley (since that’s primarily where I work).

By way of reminder, the small image to the left reflects Santa Clara County’s houses for sale as a whole – all areas and all price points. (You can see the full sized image by clicking on it.) The green area represents “regular home sales” and the brick red and light orange signify distressed  properties listed on the MLS for sale (red is short sales and orange is bank owned or REOs). Next let’s see a few regions within the county to see how things are faring geographically.

1. Almaden Valley area of San Jose – homes listed for sale by type – very few distressed properties on the market!

Almaden is a lovely southwest San Jose suburban community (zip code 95120) that grew up initially with the cinnabar or mercury mining activity.  Today it’s an upscale area of more expensive homes than most of the county, it enjoys really good schools and scenic views of the coastal range as well as the Santa Teresa Foothills.  Housing here is costly but residents love the quality of life. Since the cost of homes for sale here is high, it’s not super surprising, after seeing yesterday’s post, that there are very few distressed homes on the market here. Next we’ll check the other extreme….

2. Alum Rock area of San Jose – this is a less wealthy part of Santa Clara County and generally has been harder hit by the mortgage and housing crisis.

In this east San Jose neighborhood of Alum Rock (near beautiful Alum Rock Park), almost half the homes listed for sale are either short sales or bank owned properties.  That said, Alum Rock has some areas which are much more upscale (and elevated), some with many many acres of land and those pricier properties are not quite so badly hit with the distressed property deluge.

3. Cambrian area of San Jose – a west valley community that often closely reflects Santa Clara County as a whole

The Cambrian or Cambrian Park district of San Jose often has prices, days on market and other trends which are very similar to Santa Clara County so it’s often a good “gauge” of how the area is doing generally.  If you compare this graph to the one at the top of this post, you’ll find them very similar – about 2/3 of listed houses and duet homes for sale are “regular” or non-distressed sales.

5.  Campbell -a little more expensive, great downtown, popular area

Campbell is exceedingly popular as it’s got a charming downtown, enjoys light rail access and is part of the Los Gatos Creek Trail. It’s close to Los Gatos, but more affordable. Here about 70% of the homes listed for sale on our multiple listing service or MLS are regular sales, so a little healthier than most of Silicon Valley.

6. Los Gatos – a more expensive community, fewer distressed houses for sale

In Los Gatos, there are right now just 3 short sales on the market (for houses and duet homes) and NO bank owned homes. As you can see, it’s overwhelmingly “normal sales” and this helps a lot with home values.

A year or so ago, we had a cluster of short sales in one particular east Los Gatos neighborhood and it was really damaging the property values of the “regular sellers’” homes. It’s encouraging to see this correct a bit.

7. Monte Sereno – more expensive still – no distressed houses for sale right now!

Monte Sereno is a tiny city with 4,000 residents. It’s more expensive then neighboring Los Gatos, with whom it shares police, schools, library and more.

With no businesses or commercial buildings, Monte Sereno enjoys a quieter lifestyle.  Most of the activity is either around Daves Avenue School, the post office/city building or the horse trails!

8. Palo Alto -home to Stanford and classy luxury homes

Stately and vibrant Palo Alto is home to Stanford University (and the Lucille Packard Hospital, which is a world class facility).  Schools in this city are top-rated in Silicon Valley.  The city is beautiful and there’s lots to do.  For many reasons, then, Palo Alto is probably the most sought after address in the region, and home prices reflect its desireability. Not surprisingly, then, it’s not likely that home buyers will find many low-cost distressed properties on the market.  When they do appear, they tend to go fast.  As of this writing, there’s just one short sale and no bank owned homes available there.

9. Saratoga – great schools, scenic vista, highly regarded Silicon Valley community

Saratoga is not as costly as Palo Alto, but within Santa Clara County it’s right up there near the top for least affordable.

What I find most interesting here is not the small number of distressed properties on the MLS in Saratoga, but rather that there’s an equal number of short sales as there are REOs (bank owned).  Usually the ratio is more 2 – to – 1.  Maybe it’s a fluke? We’ll have to check and see down the road!

What we see when looking at Silicon Valley houses listed for sale by sale type is that the geographical differences largely mimic the pricing tiers.  The more expensive the area – or the home within it – the less likely you are to find that bargain priced property.

For more info on Silicon Valley Communities, please also see my website’s community information page.

A key ingredient in understanding how the Silicon Valley real estate market is faring is the ratio of regular sales to distressed properties on the market (Bank owned or REO listings and short sale listings). Today we’ll study Los Gatos and four areas or districts of San Jose: Almaden Valley, Willow Glen, Cambrian Park, and Blossom Valley.

First, let’s look at the county numbers as a general overview.  In all of Santa Clara County, there are 3537 houses, duet homes, condominiums & townhouses for sale and available (“status 1″ for my Realtor readers) on our multiple listing service. Of those, merely 1964 are “regular sales” (56%), 1105 are short sales (31%) and 375 are bank owned homes or REOs (11%).

Now let’s drill down to a few areas: Los Gatos, Almaden Valley, Willow Glen, Cambrian Park and Blossom Valley.  We’ll check out the ratio of regular sales of houses and condos in each of these areas.  How do these compare to the county average of 56%? Have a look:

This is helpful information for both home buyers & home sellers.  Home sellers need to understand the challenges that come with selling in an area with more short sales or REOs, if they are in one of those parts of the valley.  Or vice versa: if there are few distressed properties on the market, this makes it easier to sell (with less downward pressure on pricing).  Buyers need to appreciate that they will have better luck negotiating in areas where many homes are being sold under some pressure.

A quick disclaimer - if we narrowed this study by school district and even neighborhood school, we might find that these “general numbers” are actually quite different at the hyper-local level.  For example, if you visit a post of mine about the Los Gatos real estate market on my Live in Los Gatos blog, you’d find that when we separated out the various school districts, and even price points, the ratio of distressed properties and their absorption rates change very dramatically.  To see those, scroll down until you see the blue and yellow boxes.

The condo market in San Jose and nearby areas has taken a beating throughout our downturn.  Even so, condos in Los Gatos, Almaden and Willow Glen are faring pretty decently.

Now let’s hone in on each of these five areas and the two main housing types to see the ratio in each of regular sales, short sales, and REOs.
Los Gatos short sales, bank owned homes, and regular sales are next.  Green represents regular sales.  In most areas, it seems that there are about 3 times as many short sales as REOs – but not always. (Read more on the Los Gatos real estate market here.)

It is very dramatic – there are very few distressed houses for buyers to consider in Los Gatos right now: just 5 short sales and no REOs.  (The REOs do come on the market but are gobbled up quickly.)

What about condos for sale in Los Gatos?

This is still pretty healthy compared to most areas we’re considering today, but about 1/3 of the homes for sale are short sales or bank owned homes.

San Jose’s Almaden Valley is another pretty healthy market with relatively few distressed homes. Next I’ll post the graph for houses, then condos, in Almaden.

One of the driving factors for both Almaden and Los Gatos are the great schools. (More reading: check out the Almaden school district and school boundary maps & API scores for all of the Almaden Valley schools.)

Willow Glen, also part of the city of San Jose, is charming, convenient, has great community involvement – it’s always been a highly desirable place in which to live.  Next are the two graphs for Willow Glen houses and then Willow Glen condos:

Cambrian Park, also in San Jose and adjacent to all of the other areas we’re reviewing today, has become more prized over the years, first after highway 85 made it more accessible in the early 90s, and then again recently as the Union Schools began to trend up strongly in the API scores.  (Cambrian has 3 different elementary school districts, ranging from good to great. Read about the Cambrian Park real estate market in more detail here.) Most houses are still normal sales – making it a lot easier for home sellers than is the case for condo owners hoping to sell in the same neighborhoods.

Blossom Valley, yet another San Jose district, is burdened with the most distressed properties by ratio of any of these five places.  For home sellers in the 95123 and 95136 areas, it may well feel like an uphill battle to get a property sold and closed. With condominiums and townhouses especially, this is difficult for sellers there.

Earlier in this article, I gave a “quick disclaimer” about the hyper-local marke.  In Blossom Valley, Sakamoto Elementary School has fabulous API scores.  I have not pulled these numbers out, but I believe that because the school is an enormous draw, homes in that area are probably selling far better than the average in Blossom Valley (and distressed homes are probably selling far faster).

What to do with this information?  If you are buying in a part of Santa Clara County in which there are a lot of distressed homes for sale, you may get a great bargain right now. But be prepared because as more come onto the market, it may hurt your home’s market value.  Conversely, if you wish to purchase in an area with few distressed properties on the market, you may not be able to negotiate as much as you’d like – but those areas may be more insulated from further drops in value.

Downsizing? It may be a dream time for you to move from Los Gatos, Almaden Valley or Willow Glen to other areas where the market is softer.

Moving up?  That may be a little painful, especially if you’re going from an area with more short sales and REOs to another with fewer of them!

No matter what your situation, if you’re interested in buying or selling in any of these areas or nearby, please contact me for a private, confidential consultation.  I’m happy to meet with you and learn if we can work together to help you achieve your goals.

Lately I am seeing a trend with short sale listings which is anecdotal but, I think, significant.  More and more, I am seeing and hearing about lenders which are requiring an unrealistic sales price in order to approve short sales.  When I say “unrealistic”, I mean more than the market can bear in many cases.

I personally had this experience in recent months: I had a short sale listing in Sunnyvale which was priced at market value last summer.  We got three offers, all within 2-3% of each other.  This is a pretty good indicator of market value. (Had we been underpriced, the contracts would have come in higher.)  The bank wanted about 15% more – an absolutely unjustifiable figure.

What to do?  I ran the comps and submitted them.  No impact.  I then paid an agent to do a BPO (broker price opion).  That number came in about 1.5% more than my sales price.  The lender, in turn, ordered an appraisal (which we appreciated), and that came in another 1.5% higher than the BPO (or about 3% higher than the sales price my seller had accepted).  Common sense would dictate that the lender would accept as authoritative the appraisal price, right?  Not so.  They wanted another 1.5% higher still – higher than their own appraisal value, certainly higher than market value.  Needless to say, the buyer did not want to overpay for the property.  Fast forward a six months and the bank now has taken back that townhouse at foreclosure.  It could have been avoided had the lender been willing to be realistic.

As I speak to my colleagues in the real estate industry here in Silicon Valley, I am finding that my story with this one listing is not so unique. I see homes on the market in various west valley communities (Almaden, Cambrian, Los Gatos, Saratoga, Campbell and nearby San Jose areas) that are listed at a reasonable price and then speak with the Realtor and learn that the banks 10 to 15% more than the list price.  At best, this is at the high end of market value (but in many cases is higher still and completely crazy). The agents know that if the house is listed at the bank’s number, they’ll never even get an offer.

It looks as though many of the banks would rather just take the short sale properties back in foreclosure.  Why? There are incentives for them: they can write off losses, they don’t have to deal with second or third lein holders, and they may even have silent mortgage insurance, which doesn’t help if they accept a short sale – it only helps if there’s a foreclosure.

Some numbers:

Closed in the last month, just 26 short sale houses and condos and townhouses in Almaden, Cambrian, Los Gatos, Monte Sereno, Saratoga and Cupertino closed escrow.  In the same areas, there are 129 short sales on the market and available!   That’s 4.96 months of inventory….

Average days on market of these solds = 143   Average length of escrow for these solds = 110 (longest was 253!)

For non distressed listings in the same area it’s 555 available and 132 sold for 4.2 months of inventory.

The US government has tried to make short sales more appealing by offering cash incentives to lenders (and consumers), but it seems to me that right now, the banks are only appearing interested – they aren’t truly working to make short sales happen in many cases. This is not a good trend and it will hurt a lot of people.

The luxury homes market often behaves very differently than the rest of the real estate market as a whole.  If interest rates jump around, the impact is often far less since the home buyers of estate properties may not be nearly as dependent upon financing.  Many of these fine homes & estates are paid for “all cash”.  (In some cases they do this but later arrange financing, perhaps funding a “charitable remainder” trust rather than a more typical institutional loan.)

How’s the real estate market for high end homes in Los Gatos, Monte Sereno and the Los Gatos Mountain communities?  Defining “luxury homes” is a bit tricky because what constitutes luxury can vary from area to area (check out these estate homes for sale in the Buffalo NY area). For now let’s use prices of $2 million or greater as we first look at the Months of Inventory or Absorption Rate – though in fairness, the luxury price point is a little lower in the mountains.  (Six months is considered balanced by the National Association of Realtor, less is a sellers market and more is a buyers market.)

As of this writing (Jan 21, 2010) here are the numbers for homes over $2,000,000:

Los Gatos, 95030 for sale (active) = 20    Sold in the last month = 1  Months of inventory = 20

Los Gatos, 95032 for sale (active) = 14    Sold in the last month = 1  Months of inventory = 14

LG Mtns, 950303 for sale (active) = 2    Sold in the last month =0  Months of inventory = infinite

Monte Sereno   for sale (active) = 7    Sold in the last month = 0  Months of inventory = infinite

So right now, it is a deep buyers market in the luxury home strata in Monte Sereno, Los Gatos and the Los Gatos Mountains.

Next we’ll change gears and use Altos Research and quartiles to evaluate the most expensive listings.  We will look at the top quartile of list prices, the high end listings in Los Gatos (zip codes 95030 and 95032 in town), in the Los Gatos Mountains (unincorporated, 95033) and Monte Sereno (99.9% of which is in 95030 but a tiny sliver has the 95032 zip code).   The charts I’m using are live and will be continuously updated by Altos Research, to which I have a subscription.

List prices of homes for sale in the topmost price quartile in Los Gatos, Monte Sereno and the Los Gatos Mountains

The most expensive of these four areas is Monte Sereno.

Notice, for a moment, the “dip” in the last year in each area. For Monte Sereno, it came early, around April. For Los Gatos 95030 (the area closest to downtown), it came a bit later, in around June. For Los Gatos 95032 it was later still, and much milder, with the low point in about September. And the Los Gatos Mountains, which tend to move very slowly in the best of markets, had a gentle downward drop that appears to have hit bottom in November. It as if there had been a rolling wave…. Monte Sereno got hit, and then recovered, the fastest. The lower the prices, the gentler the fall and rise. Interesting!

Also of interest is that the list prices in the mountains and in Monte Sereno are as good as or better than a year ago, but not so in Los Gatos 95030 or Los Gatos 95032.

Average Days on Market for Los Gatos, Monte Sereno & the Los Gatos Mountains among the top tier of pricing in each

Over the course of the last year, it appears that homes were selling faster (or perhaps being yanked off the market faster) such that it was easier to sell last summer than it is today for luxury homes in these parts of Silicon Valley.

Let’s look at the patterns.  For the most part, these four areas all have a “V” type of movement with days on market. Visually, we again see dramatically different level of drop, though, almost exactly like we saw with the list prices. Monte Sereno sees a sharp drop – very low, very fast. Los Gatos 95030 is just behind it in terms of the type of falloff of DOM and then Los Gatos 95032 a little less. In the mountains, though, we don’t see a dramatic change at all. There’s a little dip, but nothing like what we see in Monte Sereno.

Inventory of the most expensive quartile of homes in Los Gatos, the Los Gatos Mountains and Monte Sereno

Again, we find that although these are four different (but adjacent) areas, all follow the same pattern for inventory, which was at a height last summer and is fairly low now. That seems to be somewhat seasonal, though. Let’s see how it looks over more time.

We can note that there are dips in inventory levels each winter. Even so, what we see more recently is a lot more dramatic – or volatile – than what we’ve seen prior to 2010.  Year over year, inventory is up – and that doesn’t help to sell a luxury property.

Luxury house buyers, this is a great opportunity for you to get the best home for the money!

Luxury home sellers, you need to be serious about selling if you want to be effective in this market.  There are lots of ways to get qualified traffic through the door, and just as many to make those same buyers not bother. It’s imperative to leverage everything you’ve got going for your property if you’re serious about selling.

View a Sampling Silicon Valley Luxury & Estate Homes Online Now!

Browse fine homes & estates listed for sale in Los Gatos

Showing properties 1 - 5 of 48. See more city of Los Gatos real estate.
(all data current as of 5/25/2012)

1. $19,995,000 : 16450 Aztec Ridge Dr, Los Gatos
   
   6 beds, 7 full, 2 part baths

   Home size: 11,257 sq ft

   Lot size: 50 sqft
   
2. $9,500,000 : 16721 Madrone Av, Los Gatos
   
   6 beds, 6 full baths

   Home size: 6,000 sq ft

   Lot size: 21 sqft
   
3. $9,500,000 : 285 Wooded View Dr, Los Gatos
   
   6 beds, 6 full, 1 part baths

   Home size: 7,987 sq ft

   Lot size: 6.25 ac
   
4. $8,900,000 : 16350 Matilija Dr, Los Gatos
   
   3 beds, 3 full, 1 part baths

   Home size: 7,475 sq ft

   Lot size: 1.26 ac
   
5. $8,495,000 : Shannon Rd, Los Gatos
   
   6 beds, 7 full, 2 part baths

   Home size: 6,138 sq ft

   Lot size: 31.53 ac
   

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

Browse high end properties for sale in Monte Sereno

Showing properties 1 - 5 of 6. See more city of Monte Sereno real estate.
(all data current as of 5/25/2012)

1. $4,500,000 : 16036 Greenwood Rd, Monte Sereno
   
   7 beds, 7 full, 1 part baths

   Home size: 7,336 sq ft

   Lot size: 1.17 ac
   
2. $3,999,999 : 18090 Daves Av, Monte Sereno
   
   6 beds, 6 full, 1 part baths

   Home size: 7,000 sq ft

   Lot size: 43,560 sqft
   
3. $3,795,000 : 15449 Banyan Ln, Monte Sereno
   
   5 beds, 4 full, 3 part baths

   Home size: 6,228 sq ft

   Lot size: 36,154 sqft
   
4. $3,588,000 : 16145 Greenwood Rd, Monte Sereno
   
   4 beds, 4 full baths

   Home size: 4,000 sq ft

   Lot size: 33,750 sqft
   
5. $2,295,000 : 15630 Michael Ln, Monte Sereno
   
   5 beds, 4 full, 1 part baths

   Home size: 3,924 sq ft

   Lot size: 9,583 sqft
   

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

Browse luxury houses for sale in the Los Gatos Mountains

Showing properties 1 - 5 of 5. See more city of Los Gatos Mtns real estate.
(all data current as of 5/25/2012)

1. $8,995,000 : 18550 Black Rd, Los Gatos Mtns
   
   5 beds, 8 full baths

   Home size: 18,000 sq ft

   Lot size: 11.09 ac
   
2. $2,999,000 : 18807 Bear Creek Rd, Los Gatos Mtns
   
   2 beds, 2 full baths

   Home size: 1,440 sq ft

   Lot size: 2.65 ac
   
3. $2,999,000 : 18805 Bear Creek Rd, Los Gatos Mtns
   
   4 beds, 2 full baths

   Home size: 1,440 sq ft

   Lot size: 2.65 ac
   
4. $2,280,000 : 22546 Summit Rd, Los Gatos Mtns
   
   4 beds, 4 full baths

   Home size: 2,571 sq ft

   Lot size: 43,560 sqft
   
5. $2,250,000 : 21901 Bear Creek Wy, Los Gatos Mtns
   
   4 beds, 3 full, 1 part baths

   Home size: 4,700 sq ft

   Lot size: 7 sqft
   

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

Browse estates and fine homes for sale in Saratoga, CA

Showing properties 1 - 5 of 46. See more city of Saratoga real estate.
(all data current as of 5/25/2012)

1. $17,500,000 : 22030 Mount Eden Rd, Saratoga
   
   6 beds, 6 full, 2 part baths

   Home size: 13,459 sq ft

   Lot size: 14.00 ac
   
2. $16,750,000 : 21116 Comer Dr, Saratoga
   
   6 beds, 8 full, 3 part baths

   Home size: 12,505 sq ft

   Lot size: 7.88 ac
   
3. $9,988,000 : 13388 Surrey Ln, Saratoga
   
   4 beds, 5 full, 1 part baths

   Home size: 8,500 sq ft

   Lot size: 1.05 ac
   
4. $6,988,000 : 13815 Pierce Rd, Saratoga
   
   6 beds, 5 full, 1 part baths

   Home size: 8,000 sq ft

   Lot size: 1.87 ac
   
5. $6,950,000 : 19730 Glen Una Dr, Saratoga
   
   5 beds, 4 full, 1 part baths

   Home size: 5,461 sq ft

   Lot size: 2.80 ac
   

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

Please call or email me if you’d like assistance with buying or selling high end real estate in the west valley.  I’m happy to meet with you confidentially.

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!