Today we’ll look at the ratio & relationship between real estate listings and sales of houses and duet homes in Silicon Valley over the last eighteen months. The goal is to get a sense of the market trends in terms of the overall absorption of homes for sale.  (We’ll give a glance at condo and townhome sales but the focus is on single family homes.) How hard is it to sell a home?  The answer has to do with supply and demand – the number of listings and the number of sales.

In the graphs below, the reddish brown line represents the number of pending sales.  The blue line indicates the number of listings or homes for sale. Put simply, the closer these two lines are together, the hotter the market – that is, the more of a seller’s market it is.  When they are far apart, it’s more cold, more of a buyer’s market.  If the lines cross, it is a wild frenzy (that does happen in one case, as you will see). Below please find the graph for the homes in Santa Clara County overall (all areas).

Santa Clara County listings to sales Jan 2009 to June 2010

 You can see that these two lines pinch together in about December 2009 to January 2010.  Prices had dropped and investors were swooping in! The  market has cooled since then.

Santa Clara County condo & townhome listings to pending sales Jan 2009 to June 2010

 For condos and townhouses, all of Santa Clara County:Here the two lines  – or the market – were close together for about 3-4 months.  Buyers understood that condominiums in Silicon Valley were bargain priced, and they responded by buying.Now let’s look at various areas around the county.  We’ll take these in Alphabetical order, beginning with Almaden Valley.

Almaden Valley listings to pending sales Jan 2009 to June 2010

 As you can see, the market improved but never got as “hot” as in the county generally.  This is because it’s a more expensive area, and most of what was selling in winter consisted of entry level housing.
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A couple of days ago, I showed a home for sale along the Los Gatos border with Cambrian Park (area of San Jose) to a buyer couple.  It’s tenant occupied, was pretty much a mess  (and on top of being in disarray was dark – curains drawn, no lights on etc.) and the person who lived there walked us through the property, telling us things about the owners and the situation that really didn’t make my buyers want to purchase the home at all.  Between the condition of the property and the info-packed narrative, my clients could not wait to leave.   No sale!

If you own income property (or rental property) in Silicon Valley and want to sell it, you may be aware that a 1031 tax deferred exchange is something to consider.  What you may not remember to do is to strategize about what to do with your tenants.  How do you get them to be cooperative, responsive to showing requests and neat? And preferably, to be absent or at least quiet and out of the way when the home is shown?

When residential real estate is for sale, the occupants’ lives are turned upside down.  It’s no small amount of inconvenience and risk to them with the traffic in and out, the calls at all hours, the loss of privacy and on top of everything else, the risk of personal propertybeing stolen.  If you are a homeowner, you are motivated because you will get cash out of the deal at close of escrow.  If you are a renter and the home you’re renting or leasing suddenly goes on the market, there’s not really a “silver lining” built into the scenario most of the time.  That can set the stage for trouble and even financial loss.
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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 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.

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Often I get emails from people asking if I can help them with finding a rental property. For the most part, my practice revolves around listing and selling real estate in San Jose, Los Gatos, and Silicon Valley generally, so my best information is on what’s for sale, not what’s for rent.  Once in awhile I work on rental housing, but not normally, as rental condos or houses through an agent (if they are listed on the MLS) will usually cost you more than homes you find to rent elsewhere.

The best resources I have found for locating rental properties in Santa Clara County are these (I cannot guarantee or waranty your results, but these are starting points for you):

• Craigslist (link is to the South Bay area)
• Bay Rentals (they do charge a small fee)
• ForRent.com (search by city name or zip code)
• Once you’ve located an area you like – drive around

The last bullet point might seem silly, but some of the best apartments, townhomes etc. never get listed anywhere other than a sign in the yard.  So if you love Los Gatos, Campbell, Santa Clara or anywhere else, drive it and watch for signs!

Perhaps you want to be in a hotel or inn for awhile before deciding where to rent or buy, or while on temporary assignment at a local business or university. You don’t need me to tell you where to stay in a hotel, but if you are moving here with a pet you might want assistance finding a place which will welcome your cat or dog.  Here’s a great resource for finding pet-friendly hotels, motels and inns here: DogFriendly.com’s San Jose (and nearby) City Guide, which includes accomodations, parks, outdoor restaurants etc.

Willow Glen is one of the most charming areas of San Jose, consisting of many older homes which feature lovely, classic architecture.  Most Silicon Valley home buyers treasure the Willow Glen charm and ambiance, but many are seeking newer homes.  A fabulous option is “The Willows“.

KB Homes built “The Willows” in 1999 to 2000.  It is tucked away at the southernmost tip of Willow Glen, off of Foxworthy Avenue & close to Almaden Expressway, but only about 2.5 to 3 miles from all the action on Lincoln Avenue.

The tree-lined streets are built in something of a loop shape with Rubino Circle being the main access or loop road.  Situated on the inner part of the loop are homes with smaller lots that are a little more affordable.  The outer part of the circle is built with slightly larger homes on larger lots (but none of the lots are “big”). Sidewalks with soft curbs at the corners accompany the streets and make for a pedestrian-friendly, bike, wheelchair or stroller friendly area. Visit in the early evenings and you will see children and adults walking, strolling, taking dogs for a walk etc. – always a good sign! Because the neighborhood is a bit like an oversized cul-de-sac (no through traffic), it is very quiet in terms of traffic.  The area has large street lights, too, making for a safe feeling community.
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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.
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Luxury home sales remain sluggish in the west valley areas of Santa Clara County. Right now in Almaden Valley, Los Gatos, Monte Sereno and Saratoga, there are over 125 homes for sale listed at more than two million dollars, but in the last month only 6 have sold and closed escrow in those same areas and price ranges.

Today we’ll look at these four Silicon Valley communities and their luxury homes market to see what’s selling and where.

Almaden Valley (San Jose, 95120)

Currently in Almaden there are 11 homes for sale which are listed at or over $2,000,000.  In the last month, zero (0) sold.  That makes for an infinite number of “months of inventory”. It is an extraordinarily deep buyer’s market: great for buyers, a nightmare for sellers of high end homes there.

Will it improve? Probably not soon as there are no houses pending sale in that price range either. There are 55 pending sales in Almaden, but none listed at more than 1.6 mil and the average list price of these pending sales is under 1 mil.
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