Luxury Homes & Estate Properties in Silicon Valley
How’s the Saratoga California real estate market?
This is a fairly comprehensive article on the Saratoga real estate market that will include the live statistics from Altos Research for listed properties (not closed) in Saratoga CA 95070, the closed sale data from the RE Report for last month in Saratoga 95070, and then the numbers I crunched for Saratoga – overall, and then by price point and high school district, as Saratoga has 3 different high school districts, each with an impact on home values.
First, let’s consider the months of inventory by price point and high school district that I crunched using MLSListings.com, our local multiple listing service provider. (For comparison, please also see a similar article on the Live in Los Gatos blog for the town of Los Gatos – real estate market by price point and high school district.) The months of inventory is a reference to how fast homes would be absorbed into the market if sales continued at the same pace and no new inventory came onto the market. It’s often referred to as “the absorption rate” – and that can be months of inventory, weeks of inventory, or days of inventory. A “balanced” market is somewhere around 4-5 months for us, though the National Association of Realtors says that 6 months is balanced nationwide. Anything under 3 is a good seller’s market, and under 1 is like saying that homes are “flying off the market”.
Here’s the chart for Saratoga – all price points, all school districts. The 3.13 months of inventory looks like an average market, with cooling since last month, but comparing across school districts you can see that some areas are still in a hot sellers market while others have slowed down considerably.
And for comparison, here’s last months chart:
Luxury home sales are a little sluggish in the west valley areas of Santa Clara County. Right now in Almaden Valley, Los Gatos, Monte Sereno and Saratoga, there are 108 houses for sale listed at or more than two million dollars (just checked MLSListings.com), but in the last 30 days only 16 have sold and closed escrow in those same areas and price ranges. For the Almaden – Saratoga region generally, then, there are 6.75 months of inventory in the over two million dollar price range (108 / 16). That makes it a buyer’s market. (In the same region, there are 28 pending sales. Most of these will close escrow, so it would seem to hint at an improving market.)
Next we’ll look at these four Silicon Valley communities separately to see how the luxury market in each one is faring overall.
Almaden Valley (San Jose, 95120)
Currently in Almaden there are 4 houses for sale which are listed at or over $2,000,000. In the last 30 days, just 1 sold. That makes for four “months of inventory”. It is a seller’s market, but just barely. Five to six months is balanced and over six is a buyer’s market. Continue reading
Stunning custom Los Gatos view home, easy drive, gated property . . . a unique find & entertainer’s paradise!
Fabulous opportunity to purchase a spectacular view home with a close-in location on gated lot in Los Gatos! Ideal for entertaining with oversized rooms, most with valley views.
Unique find! Very spacious, sunny home with open floor plan on gated lot in an easy-to-access location. Nearly all rooms enjoy expansive valley views! Ideal for entertaining!
• 4 bedrooms
• 4.5 baths
• Living space approx. 5,326 SF (per county)
• Lot size approx. 41,382 SF (.95 acre, per county)
• Year built: 1991
• 3 car garage + 2 car carport
• Gently sloping lot with room for pool
Main floor includes
With fabulous views, exceptionally high ranking schools and beautiful newer construction, the Graystone and Pfeiffer Ranch neighborhoods in San Jose’s Almaden Valley are perennially desireable.
Recently I was in the neighborhood and took a photo of Mt. Umunhum from there.
The neighborhood also enjoys a park along the creek with a playground to enjoy on days with better weather.
Not sure if you’ve been to this scenic part of San Jose’s Almaden Valley? Here’s where to find it (this is where I took today’s picture):
Silicon Valley features a number of upscale communities that enjoy beautiful estate properties. These luxury homes are not simply large houses, but rather they boast qualities generally not seen in regular residential real estate.
What makes a house a “luxury home”?
A luxury property in Santa Clara County often includes a number of elements that set it apart, such as:
- price tag: these homes usually sell for more than three or five million dollars (and may be $10 or $20 million or more, though in some cases as low as $2 million – that largely depends on location)
- close to an acre or more of land
- house larger than 4000 or 5000 sf
- the inclusion of “out buildings” such as a guest cottage, gatehouse, etc.
- views (valley, hill, acreage) or special features of the land (waterfront, riverfront adjacent), a vineyard, or something else special and uniquely beautiful
- amenities such as a pool, tennis court, racquetball court, gym, sports court or facilities for enjoying other sports & exercise on site
- specialized hobby or relaxation rooms, as in a darkroom, library, workshop, conservatory, wine cellar & tasting room
- entertainment centers not commonly found in private homes, like a ballroom, dedicated home theater room for movie viewing, bowling alley, shooting range, or place to practice a golf swing; pool or billiards and “game room”, and ice cream parlor
- safety tools such as a video surveillance system, electronic gates
- neighborhood: it is very hard for an expensive house to be viewed as a luxury home if the surrounding properties are not also high end homes
The (main) house itself is qualitatively different too.
Kitchens tend to be the most important room for San Jose area home buyers of all price ranges, and this includes homes that cost upwards of ten million dollars. Usually, kitchens in these homes are designed with a very clear purpose in mind and are done beautifully, though recently in Los Gatos I saw a home listed for about ten million with a kitchen that needs to be completely remodeled. This is very unusual, though.
Most luxury homes features kitchens of one extreme or the other. On the one hand, it may be more industrial in nature if those cooking in it are primarily professional chefs, domestic employees or catering services rather than the homeowner. This is not the kitchen of glossy magazines, it’s not meant to impress anyone for all the maple cabinets, stainless steel appliances and granite countertops. This sort of kitchen is functional, not gorgeous, and it may have stainless steel countertops, for instance, alongside the giant gas range. Such a kitchen is usually separate from the living areas and the guests are not expected to visit this part of the home.
Far more commonly found in Silicon Valley is the other end of the spectrum, the kitchen where residents spend most of their time, and it’s meant to impress. Here we see high end materials and appliances in a room viewed as much as art as the meals created in it are. This type of kitchen is often the focal point of today’s upscale or luxury home. The home’s floorplan is “open” to the kitchen – often the kitchen and family room blend together as part of a Great Room. This is a kitchen designed for owners who cook, not those who have servants.
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 October 19, 2012, here are the numbers for homes over $2,000,000 in the Los Gatos area
Los Gatos, 95030 for sale (active) = 30 Sold in the last month = 1 Months of inventory = 30
Los Gatos, 95032 for sale (active) = 13 Sold in the last month = 3 Months of inventory = 4.33
LG Mtns, 95033 for sale (active) = 8 Sold in the last month =0 Months of inventory = infinite
Monte Sereno for sale (active) = 9 Sold in the last month = 1 Months of inventory = 9
For some reason, right now it seems to be easier to sell a luxury property in Los Gatos 95032 than in the more downtown area of 95032. That said, there are so few homes sold that things can fluctuate quite a bit, and also the over $2 million range is huge as some homes are offered at well past $10 million. For the absolute best information, you’d need someone to do a customized study for just your property, the one you own or the one you’d like to own.
No matter how you look at it, overall it is a buyers market in the luxury home strata in Monte Sereno, Los Gatos and the Los Gatos Mountains. It may be closed to balanced in 95032, or possibly a seller’s market even in that area, but we’d need to tease out things like school district (most of 95032 is in Union or Campbell schools, not Los Gatos schools), exact pricing tier, views, proximity to downtown etc. In general, though, it is a great time to purchase a high end house or estate in these areas.
Altos charts on the LG area
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
Today we’re looking at the real estate market for houses in some of the “west valley” communities along the base of the Santa Cruz Mountains – areas where schools are good, crime is low, residents enjoy scenic views of the hills (or of the valley from the hills, depending on the location) and overall, a highly educated population not too far from Highway 85.
Of the four municipalities, three are really very similar to each other in several regards. Cupertino has the largest population – about 58,000 people – but Los Altos, Los Gatos and Saratoga are all similarly sized, somewhere between 27,000 and 30,000 residents. The latter three also enjoy a traditional “downtown” area which is popular with pedestrians, bicyclists and motorists alike. (Monte Sereno has 4,000 residents, which is so small that the statistics are very easily thrown from month to month, so it is omitted in this quick study.) Of the four, Cupertino, then, is the least similar due to size and lack of a central downtown area.
We’ll take a quick look at these areas now in terms of the real estate market trends and statistics for each area, considering just “class 1″ (houses and duet homes). The charts used below are from Altos Research, to which I have a subscription, and they will be automatically updated each week.
(1) Median List Price (per Altos Research):
Los Altos and Saratoga are neck and neck for most expensive areas in which to purchase a house. Over the last year, though, Los Altos has seen a rise in the median list price. There has been a corresponding rise in demand with the success of several local companies in the region (Apple, Google, Microsoft, LinkedIn, Facebook), some of which have gone public and others of which are on the verge of doing so. Los Altos is more convenient to most of these.
Los Gatos, which is a little more affordable than Saratoga and Los Altos, has seen a very noticeable increase in pricing also, while Cupertino’s prices have declined a little.
(1A) Median list price of the bottom quartile of all four:
(1B) And, very interestingly, same data but for the top quartile – the luxury market:
Here we see Los Altos clearly overtaking Saratoga! And also that Cupertino’s pricing is significantly lower than Los Gatos in this tier, and also that it has lost a lot of ground in the second half of 2011. Continue reading