San Jose is the largest city in Santa Clara County (or Silicon Valley) with about one million residents.  The districts or areas within San Jose vary tremendously in many ways, including their respective real estate markets.

Today we’ll have a comparative look at the median list prices in the housing market in three areas & zip codes of San Jose: Almaden Valley (95120), Cambrian Park (95124) and Willow Glen (95125).  First, how these three areas line up against each other and against San Jose as a whole in terms of the median list prices of homes for sale in the last year.

Please note: the charts below are “live” html and the commentary is appropriate as of today, July 30, 2010.  The charts will continue to change and be updated,though, so it’s possible that a year from now the commentary may seem disjointed.  Now you’ll know why!

First, a glance at Almaden, Willow Glen, Cambrian and San Jose genererally.  Overall, it looks like the higher priced homes are having the most trouble.  A closer look, though, shows that although Almaden is pricier than Willow Glen, Willow Glen’s median list price has gone down far more than Almaden’s.  My guess is that the school districts are having a large influence here – the schools in Almaden range from good to great, whereas in Willow Glen most of the zip code has only average schools.

San Jose as a whole, by price quartile is next.

The lowest priced homes have been inching up over the year. The second price point from the bottom seems to be about even with a year ago, the second from the top is down and the most expensive homes are down by about 5%.

Next, let’s focus on the Almaden Valley area of town by price quartile also:

What a change from San Jose as a whole – all of these price points are down from a year ago. (Buyers, take note: it’s easier to buy a home when you see these conditions.)  The price points are high, so Almaden is behaving like other more expensive areas of San Jose.  Next, Cambrian Park…
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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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The sales numbers for Silicon Valley real estate in June 2010 are now out and crunched. How’s the market?  Still extremely competitive in the entry level price points – it is a seller’s market overall in Santa Clara County.  The average list price to sales price ratio continues to be at over 100% (and this is the 12th month in a row for that statistic, so it is more than a fleeting trend!).

Here are the numbers at a glance for houses in Santa Clara County:

And here are the figures for condominiums and townhouses in SCC:

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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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The condominium & townhouse market is improving dramatically now.  It is evident both in looking at the stats countywide and in my recent experiences holding open my townhouse listings in Saratoga and Sunnyvale as well as recently participating in the sale of a townhome in Almaden Valley (representing a buyer) – all different areas and price points but all very active.

Here are the numbers for May sales of condos and townhomes for all of Santa Clara  County:

As you can see, the days on market are shrinking and prices (both median and average) are rising.  A few numbers cut back slightly in May: the sale to list price ratio retreated a little to 99.9% and the pending properties went down a little too.  But the number of sales were up.

The “months of inventory” or absorption rate is a great way to know how much of a buyer’s or seller’s market it is in any given place. Six months is considered balanced, less is a seller’s market and more is a buyer’s market.  Here are the months of inventory for selected communities in the “west valley” area of Silicon Valley – they are all “seller’s markets”, but some are strong and some are approaching balanced:

Of course, this is still painting with a broad brush.  The absorption rate for any of these areas may not be accurate for the various price points or school districts that might be found there.  For instance, a large luxury townhouse in Los Gatos which is downtown might be a really different type of market than a small, entry level one bordering Campbell or Cambrian Park.

What everyone’s wondering is if this seller’s market for condominiums and townhouses will continue despite the end of the federal home buyer credit.  To utilize that credit, homes had to be in contract by April 30th.  Most of those should be closed now, or nearing that date at best.  So we’ll really know more as we move into summer. My sense, though, is that what’s driving this market is much more the affordable prices of homes and of loans. The credits are a bonus, but many in Silicon Valley make too much money to be able to use them.

For information on your particular part of the Silicon Valley condo or townhome market, please give me a call or email me!

Mount Umunhum sits high on the Santa Cruz Mountain range, and from there enjoys spectacular views. Looking inland, you can see San Jose & most of Santa Clara County, on a clear day even as far north as San Francisco from Mt. Umunhum. Turning toward the Pacific Ocean, from Mt. Umunhum’s heights you can see Santa Cruz and Monterey on a fogless day.

This magnificent land is now owned by the public, but there’s no public access yet. For some history and an explanation, take in this video from the Mid Peninsula Open Space Preserve:

Click the “more” link to continue reading…
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