Often I have clients who are interested in purchasing a 4 bedroom, 2 bath home in a good school district in Silicon Valley, particularly in the South Bay and West Valley areas.    Tonight I did a study on the MLS of homes that have sold and closed escrow in the last 3 – 6 months with these characteristics:

• single family home (house)
• 4 bedrooms
• 2 bathrooms
• 1800 to 2200 square feet of living space
• 6000 to 10,000 sf lot

Disclaimers aside, here are the numbers as I shook them out for select West Valley Communities in the San Jose area with good schools (the first number is the average sales price per square foot, the second number is the average sales price):

The home prices tend to run with the school district API scores.  You can check the 2010 API scores in Santa Clara County for both the districts and the individual schools online here.         (more…)

You’ve heard that prices are a little high in Silicon Valley.  Even with the recession and the “rollback”, this is still true.  So what can you buy for a million dollars here?

In Santa Clara County (which is most of “Silicon Valley”), in the last 3 months there were about 50 -75 homes that sold very close to $1 million.  They were spread throughout the county.  Here’s a snapshot of what a million dollar home in Silicon Valley looks like.

Depending on where you live, you can get more or less for your money.  In some areas, a million dollar price tag will get you a townhouse rather than a house, too. In some areas, it’s a luxury home, but in many it’s simply a nice, middle-class home.

In some parts of Silicon Valley, by crossing a particular road or driving a few feet, the whole look, feel and pricing of an area can change.

Bel Estos Drive near Rosswood Drive in San Jose

This is true for Rosswood Drive at Union Avenue in Cambrian Park.  On both sides of the intersection, there are many homes of 1200 to 1400 square feet (some larger too) all built around the same time.  Both are San Jose 95124 addresses.  Both are good areas – but the 2000 and 2100 blocks are  nicer than the 1800 & 1900 blocks of Rosswood and those homes sell for more. Why? What makes one area sell for more than another?

In the case of Rosswood Drive, part of it has to do with the beautiful canopy of trees that line the two thousand block of Rosswood and the adjoining streets (Bel Escou, Bel Canto, Bel Estos, Esther, etc.). Part of it is just that the homes are a little better maintained.  Historically, Union used to divide the schools too, and that used to be part of the higher prices – but that’s not really the case now.  (A similar jump happens along Los Gatos-Almaden Road by Harwood too – same builder, Leep, but prices nudge up just a little for homes closer to Blossom Hill Road.)

How can you tell, from looking at a neighborhood, how it compares with nearby streets in the same part of town generally?  Sometimes you cannot know from looking alone (for example a flood plain, earthquake fault or school boundary won’t show), but I’ll give you some cues as to what makes areas more or less desireabile visually.

These are some things I teach my San Jose area buyers to watch out for (lower values) in terms of appearance and sounds:
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Sereno Group Real Estate just released its annual real estate market trends report for Santa Clara County, San Mateo County and Santa Cruz County.(The link will take you to a pdf of the report, which is a 1.6 MB file so allow a little time for downloading.)

The study covers nearly two years in these three Bay Area Counties: January 2008 to December 2009.

The report is free and does not require registration to be viewed.

We hope that you find the report informative and helpful.

Beautiful Willow Glen is one of San Jose’s many districts, but it once was a separate town until less than a hundred years ago, when the need for a better sewage system nudged the townfolk to vote in favor of annexation to San Jose.  It maintains a strong & independent identity.

To speak of “the Willow Glen real estate market” is to try to include divergent neighborhoods, school districts, architecture, price points and locations. Below please find a general overview of the market for Willow Glen houses & duet homes as of March 20, 2010. (Numbers from MLSListings.com, crunched by Mary Pope-Handy. Homes listed as “sold” were closed within the last 30 days – as of today.)

The months of inventory indicates that it is a seller’s market in Willow Glen (less than 6 months is the tipping point) overall.  Please note that there’s some variation, though, from one school district to the next.  You’ll also find variation between price points, whether or not the home is distressed, etc.

Schools:  most of Willow Glen belongs to the San Jose Unified School District.  A small section of Willow Glen is a part of the Campbell Union High School District.  (CUHSD has pretty good schools so this area is often prized for that reason.) And a tiny little sliver actually belongs to the East Side Union High School District – very few homes fall into this section so it’s not addressed specifically.

Areas: Willow Glen has many neighborhoods within it, ranging from Palm Haven and north Willow Glen to the Birdlands and the Willows at another and many others inbetween.  There are some areas more prized than others, of course.  Being close to the downtown area (and away from freeways, for instance) can dramatically increase the sales price and marketability of the home.   Certain neighborhoods have more charming architecture, larger trees along the street, wider roads or other plusses that drive their value up.

Price points and selling conditions:  In addition to these factors, we also must consider the price point of the home as well as whether a home is being sold without undue pressure or if it is a distressed sale, that is, a bank owned or short sale.  Regular sales usually sell for more (and buyers know that normally they will be given both disclosures and presale inspections prior to drafting their purchase offer).

In most of Silicon Valley, the “hottest” segment of the market is the most affordable.  For a closer look at this subset of the San Jose real estate market, I have broken it down into major groups, the first one being homes priced below $729,000 (which is close to the “conforming jumbo” loan cutoff).  Below, please notice that there is a significant difference between the months of inventory from one school district to the next as well as one sale type to the next.  In Willow Glen right now, the sweet spot of the market are homes priced under $729,000 and located in the Campbell Union High School District (not San Jose Unified). 

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A lot of angst is caused by computer generated estimates of home values. Most buyers realize that “auto comps” are seriously flawed. Some sellers worry a great deal about the impact that one of these sites might have on their home’s chances of selling at a fair price.

What is the difficulty with these sites (such as Zillow)? Why are they unreliable?

Real estate professionals know that a great many area-related things can impact home values, such as school districts, city boundaries, zip codes, or even being on one side or another of a somewhat main road. Most often, the computer generated estimations of value do not factor these things in.

Additionally, these automated systems rely on county records, which are often incorrect. They don’t “see” remodels, they don’t “compute” deferred maintenance! They cannot factor in a view – good or bad.

To ascertain a home’s probable market value, it’s best to find recently sold homes (pendings and closed sales) that are related to the subject property as follows: within a mile, within 10-15% of the size of the home, similar lot size, similar age, similar condition, and close proximity of time (preferably within the last couple of months). Additionally, the “comps” should be in the same school district and have the same city or town name and have the same zip code.

Many things can “throw” value: odors in the home, high voltage power lines, an overcrowded or unkempt street, noisy neighbors & dogs which bark too much, having apartments too close, being adjacent to freeway walls, train tracks etc.

If you view these types of market analysis sites online and get a “value” provided, please remember that these sites are extremely limited. Please understand that the number you see could be far higher or lower than market value. It is not uncommon, in my experience, to have them off as much as 20%.

What’s the solution? If you read these online valuations, do so with a large “grain of salt”. A better approach is to contact your Realtor and ask for recent comps and if you need to know the precise valuation, ask for that. Your real estate professional can help you to get a handle on your home’s current value, whether it’s to petition for lower property taxes or to decide if you can refinance or sell.

Economists are mixed on what will happen in 2010 and beyond, but many think that this year will be better than last, and 2011 will be a “hot” market again as prices are largely undervalued right now.