Silicon Valley real estateThis month I’ve celebrated my 20th year in real estate.  When I began, in Feb 1993, it was a slow time, a buyer’s market.  Realtors used to say “keep it alive until ’95“, when they expected it to recover.  And recover it did – by the end of the decade, we saw another extremely limited inventory with intense buyer interest and once again (just like the late 80s), a price run up.  It was crazy.  Some homes were getting lots of offers – 5 or 6 at a time, sometimes even more!  In 2000 and 2002 it was crazy.  I remember getting 15 offers on one house in Cupertino.

Huge numbers of multiple offers in Silicon Valley real estate sales today

Last year, though, was another one of those wild markets but much  worse.  One of my listings in Santa Clara last year got 20 offers, and another one in Blossom Valley got 22 – and they were not under priced!

In the last week, I’ve heard of more than 70 disclosure packages going out on one Cambrian house (it got 32 offers), and another one in South San Jose / Santa Teresa selling 55% over list price.  Not to mention the fact that many offers are all cash and a whole lot of them, whether cash or financed, are without contingencies of any kind – no inspection, loan or appraisal contingencies included.

These numbers are mind boggling.  We used to have rules of thumb – 1% per offer or $10,000 per offer over list price.  But when you’re talking about dozens of offers, those old rules of thumb don’t work so well.  (They work better in single digits.)

In many cases, approximately half of the number of disclosures pulled will become offers.  That ratio is higher, perhaps 2/3, when the property is turn key, and it’s lower if it’s a fixer. A property that has scary repairs needed (foundation, drainage, big structural items) may get 25% or fewer offers per disclosures reviewed. If a house has 100 disclosure packages taken out, we might think of it as 50 offers – but it could be 25 or it could be 75 offers. No one knows until they are turned in. (Back in the days of small numbers of multiples, there were times when 4 agents said they were going to bring offers and I got zero, and others were 4 said they were writing and I got 8.)

Home prices are rising, so don’t rely only on the comps

But we do know that right now, prices are going up, and in general it’s STEEP price increases that we are seeing.  The comps are yesterday’s news.  Many homes, maybe most, will not appraise in this overheated market.  If you want to buy or sell a house, it’s important to also project forward where prices are going.

Below, please find a chart of the annual average price per square foot for a neighborhood along the Los Gatos and San Jose (Cambrian Park) border near Alta Vista School where many of the street names begin with “Blossom”.  Some homes are in Los Gatos 95032 but most in San Jose 95124.  In recent years there were a few short sales or REOs which pulled prices down.  But overall, from the late 90s to today, there’s a general upward thrust in pricing.  It looks to meas though 2013 will very likely bring sales prices back to the peak of the market. In fact, things are coming up faster now that the red line would indicate because the Silicon Valley real estate market is so overheated and we are seeing not just multiple offers, but crazy high numbers of them.   Anyway, as a buyer, you need to see where that red line is going – not just where it’s been.  Where it’s been (the comps) is yesterday’s news.  The market is a good 30-45 days ahead of that.

Alta Vista Blossom Streets Appreciation

Alta Vista Blossom Streets Appreciation

This is a tough time for buyers.  Many homes won’t appraise, so to be successful you need more than 20% down to buy a home and be able to close on it in most cases.  It’s not a happy thought that the appraisal value is going to be less than the purchase price.  And it’s maddening to know that if you are to be the successful bidder on a condo, townhouse or house, you have to practically give away all of your rights to be selected by the sellers as the buyers who can purchase the home.

If you want to buy and sell a couple of years later, this is not the market for you.  A lot of people are paying too much, but that’s the only way to buy at all right now.  The market is cyclical, though.  Will we have another downturn in the market? You better believe it.  Let’s hope it’s not too soon.

  1. 3 beds, 2 baths
    Home size: 1,726 sq ft
    Lot size: 6,534 sqft
  2. 2 beds, 2 baths
    Home size: 1,154 sq ft
    Lot size: 1,054 sqft
  3. 3 beds, 2 baths
    Home size: 1,442 sq ft
    Lot size: 9,073 sqft
  4. 5 beds, 3 baths
    Home size: 2,582 sq ft
    Lot size: 7,527 sqft
  5. 3 beds, 4 baths
    Home size: 2,647 sq ft
    Lot size: 3,175 sqft
  6. 0 beds, 0 bath
    Home size: 3,280 sq ft
    Lot size: 9,330 sqft
  7. 4 beds, 3 baths
    Home size: 2,119 sq ft
    Lot size: 7,487 sqft
  8. 5 beds, 4 baths
    Home size: 4,531 sq ft
    Lot size: 9,374 sqft
  9. 4 beds, 4 baths
    Home size: 2,002 sq ft
    Lot size: 2,178 sqft
  10. 1 bed, 1 bath
    Home size: 1,106 sq ft
    Lot size: 1,298 sqft

See all Real estate in the city of Cupertino.
(all data current as of 11/18/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

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Mary Pope-Handy
Realtor
ABR, CIPS, CRS, SRES
Sereno Group Real Estate
214 Los Gatos-Saratoga Rd
Los Gatos, CA 95030
408 204-7673
Mary (at) PopeHandy.com
License# 01153805


Selling homes in
Silicon Valley:
Santa Clara County,
San Mateo County, and
Santa Cruz County.
:
Special focus on:
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Saratoga, Campbell,
Almaden Valley,
Cambrian Park.
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Santa Clara County Real Estate,
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2016: Personal Income's list of top 25 real estate blogs.


Best Realtor blog award
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The 2009 Sellsius list of top 12 women real estate bloggers
2009: Sellsius list of top
12 women real estate bloggers


Mary Pope-Handy's Live in Los Gatos blog won the 2007 Project Blogger contest, sponsored by Inman News and Active Rain

2007: Mary Pope-Handy and Frances Flynn Thorsen win the Project Blogger Contest for Mary's Live in Los Gatos blog. The contest was sponsored by
Active Rain and Inman News.


Non blog award


Best real estate agent in Silicon Valley from the San Jose Mercury News poll of readers in 2011
"Best real estate agent
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2011 readers' poll,
San Jose Mercury News

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