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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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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A plat map comes with your preliminary title report (provided by your title company when you purchase or sell a home in California), tucked away at the back and somewhat mysterious with lots of numbers in small print.  It holds quite a bit of helpful information if you know what it is you’re seeing.  Today we’ll view a sample of one of these – breaking down the plat map shown as a small thumbnail image on the right to more readable parts so that you can learn how to “read” or understand a plat map.  By the way, this example we’re using is for a lovely San Jose neighborhood in the Cambrian Park district which borders Los Gatos and is near Carlton Avenue, Los Gatos-Almaden Road and Union Avenue.

First have a quick look at the thumbnail image on the right.  You can tell it’s some sort of map with official looking writing in the lower corners.  Perhaps most salient even in the smallest image, one important feature of the plat map is that it provides the orientation of the properties (north/south/east/west).  That info is now readily findable online, but this used to be the easiest way (and most accurate) to answer the question “which way does the home face?” Look at the map, find the parcel and you’ll know its orientation.

The plat map also provides the Tract Number (and often the name given by the builder for the subdivision – in this case, Carlton Terrace). Along the right side, you can see the source of this information: the office of the county assessor for Santa Clara County.
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How’s the market in Saratoga?  Your view of the market will be influenced by whether you’re looking at the homes that have sold, the ones on the market, or the ones that are sitting and not selling. 

Here’s a look at the numbers from my Real Estate Report for single family homes: 

Among the sold homes, the median price has been slipping.  This is an “overall” number though, not reflecting price points, location, or school districts.

Here’s the same info for condos and townhomes in Saratoga:

As you can see there were no sales of condos in Saratoga in November – hence all the zeros.   What is managing to sell are the very least expensive homes – not the luxury condos.

Now let’s turn our attention to what’s happening now amoung the active or for sale homes in Saratoga (using Altos Research, to which I have a subscription).

Here’s a graph displaying the overview of list prices for condos and single family homes in Saratoga:

Oddly, list prices appear to be up even though the median sales price is clearly down.  Are sellers out of touch, or what’s happening?  We’ll need more data to answer that.

Here’s a similar graph but just of the single family homes, and this time 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.)

Interestingly, the middle quartiles showed upward movement in pricing over the last 12 months. I have buyers in the lower 3 quartile and it seems that there’s not much inventory among thouse in Saratoga or Cupertino Schools, and when the home is nicely fixed up and has no issues (problems), prices seem to be inching up. 
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