The annual market report is out at popehandy.REReport.com and we can now learn how 2011 compared to 2010.  The median sales price for houses in Santa Clara County was off 5.3% overall.  But from one part of the valley to the next it varied wildly with 6 cities or areas finding themselves in positive territory while others were off by double digits.

In the image to the left, I’ve put into bold the cities where the median sales price of houses which sold and closed escrow in 2011 were ahead of 2010′s pricing.

What is it that makes Gilroy, Los Altos Hills, Los Gatos, Mountain View and Palo Alto “in the black”?

Most of these cities/towns are upscale, west valley communities.  But so are Saratoga, Cupertino, and Monte Sereno.

Gilroy was especially hard-hit with the housing downturn so perhaps in that case, it’s just coming back into more of a balance. (Then again, so was Morgan Hill and it’s still off by 12%.)

The LinkedIn IPO and others in the Palo Alto area drove prices up for some parts of the housing market nearby and it’s likely that this explains the positive growth for Palo Alto, Mountain View, and Los Altos Hills.  That said, it would seem that Los Altos, and perhaps even Sunnyvale would have seen stronger numbers on the same account.  Perhaps school scores are the key driver here.

Los Gatos, Saratoga and Monte Sereno often behave somewhat similarly as they are adjacent to one another and often attract similar home buyers who want good schools, a nice downtown area nearby and scenic beauty with the hills.  The annual numbers show Monte Sereno down 6.7%, Saratoga down 2% but Los Gatos up 6.4%.  With Monte Sereno, there are very few sales each month and each year (only about 4,000 residents), so there can be a wider swing without it necessarily being accurate. Saratoga and Los Gatos each have about 30,000 people who call these areas home, though, so the data is much more helpful.  Saratoga and Los Gatos both have multiple school districts, views, homes with better proximity to “downtown” and more variables – I think we’d have to dig a lot deeper to learn why these two neighboring markets are so diverse.  We might also have to look at multiple years of data to see if Saratoga spiked while LG slumped to explain the difference. (more…)

Yesterday Jim and I attended the Los Gatos Creekside Sports Park kickoff celebration (will nearly touch Vasona Lake County Park and is just off of University Avenue) and as we often do, drove east on Blossom Hill Road to get home. Straight ahead of us, hanging over south San Jose and Santa Teresa and extending north, was a huge and darkened cloud. Smoke? Smog? Rainclouds?

We drove up Harwood Road and to the top of Harwood Court to get a better view of it. It did look like it started in south San Jose or further south than that. Some hikers were trekking up the challenging hill and we asked them if they knew if it were a fire. “Can’t smell it,” one replied “so it must be smog – just awful!” Smog, though, tends to dissipate from side to side and not hang together so tightly as what we saw.

View from Harwood Court in Los Gatos of the smokey skies created by the Cal Fire "controlled burn" in south county

We flipped on KLIV, the San Jose based AM radio station (channel 1590) that best covers local news & traffic, and learned right away that it was a controlled burn. This morning I googled the fire and learned that it’s a 2 day burn at part of Henry Coe State Park, overseen by Cal Fire, with more scheduled for today.

The Morgan Hill Times reports that “The prescribed burn is part of the ‘Western Zone Complex’ controlled fire in the remote area of the park. The fire will take place on the Middle Ridge Trail off Hobbs Road, about eight miles northeast of Morgan Hill, according to Calfire fire prevention specialist Chris Morgan. “

My Sereno Group real estate colleague and friend Lorraine Combs has some extremely gorgeous land listed for sale in Morgan Hill.  Many of us have the dream about building a home somewhere in Silicon Valley and getting more space – and this south county acreage is so scenic that I really wanted to showcase it here.  It’s a nice piece of the California heritage with views of the hills, trees and water all in one place. What a great place to enjoy horses or a vineyard!

So, take a few minutes, enjoy the photos and details, and see if these riverside lots might be just the thing for you or someone you know!

Two Riverfront Morgan Hill Lots For Sale: Some General Information

These two properties were recently subdivided, so share the same address, which is 12575 Watsonville Road, Morgan Hill.  The area is close to town and also near to the wine growing region.

One of these parcels is just shy of 3 acres and the other is 3.45 acres.  They are contiguous so two lots can be purchased together if you are looking for an even larger piece of land to call your own.

Both properties front the beautiful Uvas River, which runs year round.  And both are equestrian properties, zoned for horses.

Seller financing is possible for your real estate purchase – this is an enormous plus, especially given the current lending climate!

A well is shared between the two addresses. One lot has a P, G & E pole and the other has an electric easement.

One of the parcels has an existing structure and a new house can be built on that site, which includes views of the Uvas River.  The other does not currently have a building on it but does enjoy frontage on the river (and plenty of level land upon which to build).

Please note: do not go to these listings without an appointment!  It is imperative to call and make an appointment first to view this prime land (contact info will be listed at the end of this article).

Now let’s go over each parcel individually. (more…)

The Williamson Act, also known as the California Land Conservation Act, was passed by our California Legislature in 1965 in order to encourage rural & agricultural lands to remain undeveloped longer. When land owners enter into a contract under the act, they benefit from lower property taxes, which are based on the property’s current use, rather than paying market value based tax rates.  In exchange, the property is to remain undeveloped and continue to function the same way for the duration of that contract.  The contracts run for 10 years and are automatically renewed unless the farmer or rancher cancels it.

Why does the Williamson Act matter?

According to the Committee for Green Foothills, there are 362,000 acres of land in Santa Clara County under the Williamson Act (that article appears to have been written in 2003, so the numbers may have changed a little since then).  Much of it is in the east foothills of east San Jose and the south county areas near Morgan Hill and Gilroy, but there are patches of it in Los Gatos, Saratoga, Cupertino, Almaden Valley, Blossom Valley and throughout Silicon Valley. The tax breaks make it possible for many farmers and ranchers to stay in business and not feel forced to sell their land for development.  If they were paying “market rate” taxes, it would not be long before most or all of our rural and agricultural uses gave way to housing and other development.

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What makes a Silicon Valley house a luxury home? How is high end real estate different from the rest of the market? When is a property not just a home with land, but an estate? 

In other parts of the U.S., spending $700,000 may fetch a 4000 square foot home, new construction, in an upscale gated community with country club amenities such as a golf course, tennis courts, and more. Here, that same $700,000 will procure an entry to mid-level single family home in many parts of Santa Clara County. 

Luxury connotes a combination of qualities, features, and amenities. And it includes pricing (relative to the nearby market), condition, land, design. 

Pricing Luxury Homes in Silicon Valley: What Do They Cost? 

Expensive Silicon Valley homes are not necessarily luxury homes. Depending on the city or town, the price tag could be higher or lower. For instance, a fabulous house on a large lot in Gilroy’s Eagle Ridge might sell for 1/3 as much as the identical type of home, land and neighborhood found in Saratoga, Monte Sereno, or Los Gatos, or Los Altos, if a similar home happened to be available. Generally, though, luxury homes could cost as little as $1,000,000 or so in some parts of Silicon Valley or in neighboring counties, but in most parts of Silicon Valley, a true estate type property will be valued at $2,000,000 or $3,000,000 or more.  In some areas, such as Palo Alto, that $2 million doesn’t go too far and the home you can purchase at that price tag may need major updating – or it could be “land value”.  For our purposes today, we’ll use $2 million as the bottom number for estate properties, but it may or may not be the case in some areas. 

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