The Cambrian Park Real Estate Market Update
With so much dire news abounding, it’s easy to believe that there’s no good news in Silicon Valley real estate. That just isn’t the case, though. Every market is an opportunity for someone. It’s always better for one side (buyer/seller) and worse for the other. Right now, values are slipping, especially in the condo market, and people who own homes generally feel glum about that. But for those wanting to buy, this is a glimmer of hope that maybe they can buy a home in San Jose - maybe a condo or a house, here rather than in the Central Valley. And with gas at $4 per gallon, living close to work is highly prized.
I. The Data for Sold Single Family Homes in Cambrian Park
But back to the local market in San Jose’s Cambrian Park district. What’s happening now in the housing market? Here are a few facts about the solds in Cambrian for single family homes in August 2008 (charts care of my Real Estate Report, a subscription):
- Cambrian Park short sales are not rising dramatically - in fact, they seem to have leveled off or perhaps even reduced in number
- sales prices in Cambrian are down 2-4% from July to August (that said, August is often one of the softest months of the year)
- the median Cambrian Park sales price was down 7.2% in August from a year ago
- the average Cambrian sale price was down 12% in August from a year ago
- the Cambrian Park list price to sales price ratio in August was a healthy 98.2%, improved from July’s 97.7% but worse than a year ago’s 99.4%
- days on market in Cambrian was slightly improved with 45 in August, 46 in July but 27 a year ago
Let’s now have a look at some of these Cambrian Park single family home real estate facts in graphs that include not just this year, but recent history as well. First, the ratio between the list price and sales price. In a seller’s market, homes often sell at or over 100% of the asking price. Here you can see that the last time there was this type of peak in Cambrian Park was in about May of 2007. The ratio slipped consistently until February of this year, when it rose again until about May before beginning a decline. This type of slippage is not uncommon from sometime in spring through at least the end of the summer.
Next let’s review the prices and number of sales in Cambrian Park. The actual number of sales in July was 47 single family homes and it was 54 in August - and a year ago that number was 51! So this is good news for sellers. The chart below uses a 3-month moving average, so it does not show these numbers so specifically but it is apparent that the number of sales have been growing and recently they are higher also on a year-over-year basis. There’s no “falling off a cliff” here with pricing. It’s not an easy market for selling in Cambrian, but it’s not impossible, either!
The number of sales year to date in Cambrian Park are clearly way down, and this has been the trend for a number of years. This next graph does not cover volume (the total dollars involved), simply the number of houses sold. This combined with the falling sales prices makes it easy to understand why so many elements in our economy are hurting, from real estate agents and lenders to title company employees, home inspectors, people working for pest control companies, appraisers, and so many more. There’s a lot of “underemployment” associated with this trend too.
For home sellers, this bar chart conveys the challenge of trying to sell a home now. Most people tend to think that in a seller’s market, every home sells. That’s actually not the case - it just means that it’s easier to sell and the odds are improved. Even in a seller’s market, a percentage of homes never sell. But now, it’s only a small percentage of homes that do sell. As a seller, this graph should make you ask: “What do I have to do to make sure that my home is one of the few that does sell?”
One of the most useful tools for evaluating the Cambrian Park real estate market is the absorption rate or days (or weeks or months) of inventory. This graph helps us to understand how saturated the market is by dividing the number of sales into the active inventory to see how long it would take for the market to absorb this inventory if homes continued to sell at this rate. Of all the numbers we consider (days on market, list price to sales price ratio, etc), this one seems to be the best indicator of market health and I find it the most important one to watch.
For Cambrian Park home sellers, the lower the days of inventory, the better. For home buyers, obviously the larger number of days is better as it means that the buyer has more clout. (That said, most buyers are nervous buying in a buyers market and most wait until it’s a seller’s market to jump in.)
The chart below indicates that the worst of the market in recent months was in the October to April range, and things have been moving toward a more balanced market ever since.
II. The Data for the Cambrian Park Active Listings Information
Next we’ll view the days on market for Cambrian by zip code. Most of Cambrian Park is in the 95124 area, some is in 95118 (and a small area is in 95008, which is mostly Campbell so it is not included here). Generally, the 95124 area sells for more, has older homes and is in Cambrian or Union School District. The 95118 area tends to have slightly newer housing that’s a little more affordable and has San Jose Unified Schools. The 95124 area is usually considered more desireable as it’s closer to freeways and to Los Gatos. Teh 95118 area was greatly helped by the building of highway 85 but many perceive it as a bit remote from commute roads. For these reasons, it is not surprising that the 95124 area has had a lower average amount of days on the market. What is really intriuging is the fact that now they are nearly identical. (Charts below care of another subscription I have, Altos Research.)
The Cambrian Park single family homes for sale, or inventory, is charted below, again by zip code. Because the majority of Cambrian Homes are in the 95124 zip code, I am not concerned about the difference in numbers between the two parts of this district. What is interesting, though, is the fact that it the rise of inventory began to level off much more in the 95118 area than it has in the 95124 area.
(In other posts elsewhere, I have noted that the Los Gatos real estate market has been suffering more than many areas. The 95124 part of Cambrian borders Los Gatos so I’m wondering if those are related? See How’s The Los Gatos Real Estate Market Doing Now? for more on the single family home market in Los Gatos, or see How Is the Condo and Townhome Market Doing in Los Gatos? for the state of the real estate market with townhouses and condominiums in Los Gatos)
Next, let’s see how sellers and listing agents are responding to the market conditions in the two zip codes in Cambrian in terms of pricing. Below please find the median list prices in the 95118 and 95124. Interestingly, the 95118 prices have been adjusting with a sharper drop than those in 95124. Perhaps this explains the chart above with the inventory of actively marketed homes? That is, perhaps by dropping their prices faster, the homesellers in the 95118 zip code of Cambrian Park are causing their inventory to level off - to be absorbed faster and to create a healthier market overall.
Finally, Altos Research does a “Market Action Index” that factors in the key elements to provide a “sense of the market” overall by zip code. Here we can see that the 95124 zip code has taken a much bigger tumble than the 95118 area in regard to how it’s faring right now, and they have ended up in about the same place on the chart. Usually, the 95124 area is a bit more desireable. Whether it is because of the fact that homes tend to be newer, or homes have been priced more aggressively, or some other factor, by this chart we’d have to say that the two parts of Cambrian Park now appear to be on about a level footing as they compete for the same homebuyers.
This overview of the Cambrian Park real estate market looked only at single family homes and did not dissect this market by subgroups such as price quartiles, types of housing, age, location, amenities, lot size, house size, or any of these other very important issues. For information pertaining to your particular needs as a buyer or seller, please contact me. We can set up a time to meet and go over your situation and your home specifically. I provide an initial no cost 30 minute consultation to people considering buying or selling a home, and I would be happy to arrange to do that with you as well, and at the same time, give you a copy of my book, “Get The Best Deal When Selling Your Home In Silicon Valley“.
Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, RECS, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: “Get The Best Deal When Selling Your Home In Silicon Valley”
Keller Williams, Cupertino, CA (Silicon Valley)
877 397-5391 (Direct/Toll-Free/Fax); 408 204-7673 (Cell)
www.DelightHomes.com (PopeHandy.com)
emailto: Mary@PopeHandy.com
Blog: www.LiveInLosGatos.com & www.ValleyOfHeartsDelight.com
Tags: Absorption Rate, Cambrian Park Real Estate, days of inventory, days on the market, Market Reports, san jose