Sorting out the local Los Gatos real estate market can be a bit tricky, but one of the best instruments for measuring performance is the months of inventory (MOI, or absorption rate). In this article we’ll consider the MOI houses in Los Gatos 95030 and 95032 by high school district and price point, since I believe those are the two main drivers of our residential real estate market. (Explanation of the MOI is at the end of this post.) Also, this time I’m adding in the pending sales as an indicator of where the market is going, too – just to cover the bases! Finally, since I did a similar study the first week in November, but without the pendings, I’ll keep those below the current tables for the sake of comparison.
Overall, right now we have a brisk 2 months of inventory for houses in Los Gatos. But homes in the lowest price point are selling far faster – at about 10 days of inventory!! The MOI increases very clearly with higher price points, where it becomes increasingly challenging to sell.
About six weeks earlier, it looked like this chart below -the MOI is now a lot faster (4.19 then to 2.04 now) as inventory has shrunk by about a third and sales have increased (21 to 28 now). Perhaps most striking is the change in the luxury or high end market over the last six weeks. It seems far harder to sell a luxury home now as opposed to then.
Next up – homes “in the schools” with Los Gatos High School, then those in the Leigh HS and Westmont HS attendance areas. How will these numbers stack up compared to the town as a whole?
Months of inventory for homes with Los Gatos Schools: Los Gatos Saratoga Joint Union High School District (Los Gatos High School)
Surprisingly, in general the market for this subset in town is a little bit cooler than for the town as a whole (the town = 2.04 MOI, in the schools – 2.28 MOI). We tend to think of homes with Los Gatos schools as selling better, but often the overall real estate market has a higher months of inventory than the town generally. Why is that? Let’s have a look. (The 1st column is listings, 2nd is sold in last 30 days, 3rd is MOI and last column is pending sales.)
The most expensive properties are just not selling at all – they have infinite months of inventory. The trend is completely plain: the more expensive the house, the harder it is to sell and the lower the odds are of selling at all.
Below is the MOI in early November 2013, for comparison purposes. The market has improved a LOT for this area overall, rising from 5.15 MOI to 2.28. Inventory has shrunk fro 67 houses then to just 41 now, but home sales are up from 13 to 18. But – and this is a big caveat – it is now harder for the luxury market!
The trouble is primarily in the highest priced homes, but also the $2 mil to appx $2.5 million range isn’t exactly flying off the shelves. Are things better in far east and west Los Gatos, with different schools?
Months of inventory in Los Gatos with the Campbell Union High School District (Westmont and Leigh High Schools)
In the Campbell Union HSD, the market is a little brisker overall, with the MOI at 1.6 (improved from 2.6 a few weeks back). In fact, it is exceedingly strong right up to $2 million. But after that, it’s the opposite – pretty much impossible, nothing has sold and nothing is pending except for one house in the luxury range.
(The 1st column is listings, 2nd is sold in last 30 days, 3rd is MOI and last column is pending sales.)
And from early November 2013 again:
If you are thinking of selling a high end property in Los Gatos, it’s important to be aware of what is and what isn’t selling. Over $3 million in the Los Gatos schools area is a real uphill battle. But the threshold is even lower in the Campbell Union High School District section of town – there it seems to be at $2 million. If you don’t have to part with a luxury property right now, it might be best to wait a bit.
On the other hand, homes up to about $2 million anywhere in Los Gatos are pretty much flying off the market.
Why the absolute line in the sand for the market? I wish I knew. Perhaps it has to do with investors, or people wanting to spend less on a personal residence and more on other things. I have been seeing a trend of simplifying and downsizing by home buyers who are capable of spending much more but are shunning opulence. I would not be surprised if this were not just my anecdotal observation.
As for home buyers, if you are in the highest pricing tier, you are in luck – there’s not so much competition! But under $2 million you may need to come in with more cash and fewer contingencies if there are multiple offers.
Interested in buying or selling a Los Gatos house, townhouse or condo? Please contact me, Mary Pope-Handy, for a confidential, no obligation meeting to discuss your plans and needs: 408 204-7673 or email me at mary (at) popehandy.com
What is the MOI? The months of inventory, or MOI, is simple math: divide the active listings by those which sold & closed in the last 30 days for the absorption rate. Another way of viewing it is this: if no new inventory came onto the market, and closings continued at the same rate, how many months would it take for all available inventory to sell off? A balanced market is somewhere around 5 – 6 months. Less is a seller’s market. More is a buyer’s market. When no homes close at all, the market timeframe becomes “infinite” – in other words, a very very cold seller’s market.
The Los Gatos Real Estate Report, updated monthly with closed sales data (one of my subscriptions)
What does it cost to buy a home with Los Gatos schools? (from my Live in Los Gatos blog)
$1,549,000 : 16759 Frank AVE, LOS GATOS3 beds, 2 baths
$1,400,000 : 158 Lester LN, LOS GATOS4 beds, 3 baths
$3,695,000 : 221 Highland TER, LOS GATOS3 beds, 3 baths
$1,149,000 : 231 Casitas Bulevar, LOS GATOS3 beds, 3 baths
$1,550,000 : 26183 Loma Prieta WAY, LOS GATOS4 beds, 3 baths
$1,295,000 : 18086 Reed Knoll RD, LOS GATOS3 beds, 2 baths
$4,990,000 : 15685 Gum Tree LN, LOS GATOS5 beds, 6 baths
$1,349,000 : 212 Beethoven LN, LOS GATOS4 beds, 3 baths
$1,200,000 : 0 Old Santa Cruz Hwy, LOS GATOS2 beds, 2 baths
$2,995,000 : 193 La Montagne CT, LOS GATOS5 beds, 5 baths
See all Real estate in the city of Los Gatos.
(all data current as of 9/18/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.