How can you get the most “bang for your buck” with Silicon Valley homes when schools are your top priority?

Santa Clara County Realtors know that the performance of local schools is often the leading factor which drives housing values. Different families have different wants and needs, so sometimes it’s not all (or just) about the API scores. (On a related note, consumers please note that real estate agents aren’t API experts and we will not have the exact scores of all schools memoriezed, but we do know how to obtain that information online and elsewhere.)

Because school district boundaries are not identical to city boundary lines, often times there’s confusion about which neighborhoods belong to which school. By understanding this small quirk, you may be able to save many thousands of dollars.

For instance, Cupertino Schools are very highly regarded. But you may not have to be in Cupertino to enjoy the benefits of the district! Part of San Jose (in the 95129 zip code) is part of the Lynbrook High School area. Prices are noticeably lower with the San Jose address.

Likewise with the highly esteemed Los Gatos Schools, the boundaries of the district don’t line up with the town’s boundaries. Hard to imagine, but one little corner of San Jose (in Almaden Valley, off Guadalupe Mines Road) actually belongs to the Los Gatos School district. Homes are less costly in Almaden than in Los Gatos, so this is another great bargain if schools are the most important thing to you.

There are less dramatic examples too, such as homes with a Los Gatos mailing address belonging to Saratoga schools, or Los Altos homes being in the Cupertino school area.

Experienced agents, like those of us at Luxor Real Estate Group, know about some of these “fine points” in Silicon Valley real estate and our knowledge can provide you with a distinct advantage in home buying. Please call us today for help in getting started or continuing your homebuying.

No, sorry, there aren’t a lot of distressed homes for sale in the Saratoga and Los Gatos areas.  Would be bargain hunters email me regularly, hoping to find lots and lots of short sales and bank owned (REO - real estate owned by the bank) houses for sale in high end west valley neighborhoods.

There just aren’t many of them!

As of today, in Los Gatos (95030 and 95032 zip codes) and Saratoga (95070) , there are 185 single family homes (houses, perhaps a few “duet homes”) for sale.  Of the 185, a mere 14 of them are distressed properties (6 bank owned, 8 short sale).  That is just 7.5%!  For those who want Los Gatos or Saratoga Schools (not Campbell, Union, or Cupertino), the odds are even worse.  Only two of those homes go to the Los Gatos-Saratoga High School District. (Prices of all distressed properties currently available in these areas range from $699,000 to about $3 million.)

There are some good deals to be found in addition to this very small pool of bank owned properties and short sale listings in Saratoga and Los Gatos.  Often the best deals are found among homes which have been on the market a long time but aren’t selling due to cosmetic issues.  Homes which need changes such as fresh carpet, paint, or “easy” updating and remodeling (like new countertops, light fixtures, etc.) can be the best bargains around, particularly if the seller is truly motivated.  So don’t lose heart - just broaden your strategy a little and you’ll be far more able to locate a suitable home.

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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This week one of my buyers asked me about the inventory levels in Santa Clara County (San Jose, specificially) and wondered if they’re lower than usual.  I get this question a lot lately so wanted to present the numbers to the readers of this Valley of Hearts Delight Blog. 

How low is the inventory? It’s way off from last year in most parts of the west valley. But remember, last year was unusual.  (Below are the numbers for single family homes, or houses.)

How much is this year’s inventory off from the average of the last 6 years?

Almaden: down appx 10%
Cambrian: down appx 18%
Campbell: down appx 20%
Los Gatos: up appx 6%
Saratoga: up appx 38%

Once again, “easy answers” allude us. 

If we were to push this further, we’d find that certain price points (or bands or strata) in the market are way above or below the typical numbers.  It is very hard to generalize accurately.  Anecdotally, though, it seems as though there’s very little on the market as far as my buyers are concerned (and right now, my buyers are looking at properties in Santa Clara County ranging from the 400s to between 1 and 2 million). 

For information on your particular situation, please contact me.

Now is a great time to buy a home in Silicon Valley: interest rates are incredibly low (and clearly will not stay that way forever - they never do!).  Depending on your desired or required price range and area, the market varies in terms of how much of a bargain you can get. Please understand that buyers are not 100% in charge, though, and sellers are not “giving away” their homes.

Recently I saw a buyer request for a Cambrian Park home. The buyer in question wanted a 3 bed, 2 bath home in the 95124 area with the very best schools. So far, so good. The buyer expected to pay between $200,000 and $500,000 for this home - and unfortunately, that is just not terribly realistic. What he or she wants may be close to $550,000 but if the home is on a standard lot (not a patio home) in good shape, and has no issues (no high voltage lines, no busy road, no converted garage), it wil not be less than $500,000, even if it’s a bank owned property.

In Los Gatos, it is very unlikely to get a good 3 or 4 bedroom, 2 bath home “in the schools” for less than $1,350,000 unless there are issues such as deferred maintenance, bad neighbors, weird floorplan, remodeling needed, busy road, backs to something undesireable, etc.   A really fixed up, turnkey home will probably cost close to 1.4 or 1.5  million if it’s “in the schools”.

In Saratoga, it’s unlikely to get that same home for less than $1,400,000.
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Locals to the San Jose area (Silicon Valley, Santa Clara County) know, and newcomers often do not, that we have mico-climates here. Our weather is mild everywhere, of course - we enjoy a “sub tropical climate” where citrus grows and palm trees thrive - but it varies a lot nonetheless.

What kind of variation exists in Santa Clara County’s weather?

Consider that our terrain is shaped somewhat like a funnel with the San Francisco Bay

View Larger Map

Together with our funnel shaped valley, the Pacific Ocean and the San Francisco Bay are the major influencers on our climate. The Santa Cruz Mountains are warmer and wetter than the eastern foothills. The Pacific Ocean brings in the rain, fog and winds pulling storms in from the ocean to the valley. Much of the weather stops at or near the coastal mountains, though, and the influence lessens as you go east such that the east foothills are very, very different from the Santa Cruz Mountains. The areas close to the bay get more breezes than those sheltered by smaller valleys or nooks.

Here are a few basic notes for newcomers:
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Homes in Saratoga, especially in the Saratoga or Cupertino schools areas and in the lowest price ranges, are selling at an improved clip from a year ago. 

Below please find charts indicating the overall residential real estate trends for houses on the market and sold over the last year in Saratoga, California.   Of course the “market heat” will vary from home to home and area to area due to neighborhoood quality, price point, newness of construction and condition of home, school district (especially), and acreage, among other things.  So these general comments may not apply to your unique house, but will be a good indicator of the housing market in Saratoga generally.

First, supply and demand in Saratoga over the last year.  The number of Saratoga homes on the market is up 31% year over year and the number of sold properties is up 72%.  The trend line indicates a rise in both homes on the market and those sold.  June’s inventory was a bit smaller than May’s. Will inventory continue to contract? If so, it will put pressure on home buyers because prices may begin to rise as the inventory gets better absorbed.

Please note that while the market is improving very noticeably, there are still far more homes on the market than are actually selling. Sellers, take heart that it’s improving but do not believe that the selling conditions are so changed that your home doesn’t need to be priced aggressively and staged nicely to get sold. (Even in a hot sellers market, some homes never do sell because of price and condition, primarily.)

Months Supply of Inventory (absorption rate) in Saratoga for single family homes (houses) has been declining and is down 26.2% from a year ago at this same time.

Finally, a look  at homes between one and two million dollars in Saratoga (for sale, pending and sold).  I wanted an overview of what the market is like in this fairly hot segment of the market. 

This chart is helpful as it indicates price reductions and “days on market” as well as the current or sold prices. The clusters reveal that most homes that sell are selling pretty fast.  Very few homes languish on the market more than 6 months before they are sold, removed from the market, or repriced dramatically enough to get a new MLS number and position in the market.

Homeowners: it is a better time to sell now than it’s been in recent history, and the market is moving into your favor (esp in the lowest price ranges). To maximize your home’s value when selling, it needs to be postioned to sell fast while buyers have the most interest in it.   Buyers, the “shiney pennies” are being bought fairly quickly so if you see a good home in a good area with a good price, don’t wait too long to act.  If you can buy a solid home with “good bones” that needs a little work, you’ll have far less competition then if you buy the turnkey home that everyone wants.

If you are interested in selling or buying a home in Saratoga, or anywhere in the west valley communities of Silicon Valley, please contact me for more market information that is relevant to your homebuying or homeselling needs. I would be happy to meet with you personally and discuss your needs and the current climate for buying and selling.