The Los Gatos real estate market appears to remain a ” buyer’s market”, but it entirely depends on which part of the Los Gatos market you’re discussing.

This post will cover:

• single family homes (99% houses, but a few duet homes)
• 95030 and 95032 zip codes
• Two high school districts:
  • Los Gatos Saratoga High School District (meaning Los Gatos High School)
  • Campbell Union High School District (meaning Westmont or Leigh High Schools)
• varying price points in all of the above

General comments:
Most of 95030 is in the Los Gatos Saratoga High School District, but there is a very, very tiny portion of it which belongs to the Campbell Union High School District.  The percentage is so small as to be statistically insignificant, but I wanted to mention it here for the sake of accuracy and I will include it below.  The numbers below are from our MLS provider, MLSListings.com, with the numbers crunched by me, Mary Pope-Handy.  While I have made every effort to be 100% accurate, I do not guarantee it (don’t sure me if there’s a typo or other error!).

Overview of the basic numbers and months of inventory for the housing market in the town of Los Gatos overall  - homes for sale, pending sales, and closed sales within the last month:

It appears to be a buyer’s market, which is true for much of the town, but not all of it.  There is variation to a phenomenal degree depending on price point, zip code, and school district.  Below we’ll look at all of it and see market conditions for each segment.
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It is a strong seller’s market in the Alum Rock area of San Jose right now: inventory is shrinking and prices are rising after hitting bottom a few months ago. Prices are still way off year over year, but for the last 4 months or so, prices have been rising in this part of Silicon Valley, and it’s quite dramatic.

As of a few days ago in this area of San Jose, there were 203 single family homes for sale and there were 114 that sold/closed in the last month. To get the “months of inventory” or absorption rate we just divide the 203 by the 114 and we get about 1.8 months of inventory, which makes it a very strong sellers market. 

(Because it’s so affordable, first time homebuyers are flocking to Alum Rock in droves. Unfortunately, they are sometimes outbid by all-cash investors and left frustrated as homes get multiple offers and prices skyrocket out of reach.)

The absorption rate can be measured in days, weeks, months (or years) of inventory.  Below is a chart reflecting the days of inventory relative to the last 18 months or so.  As you can see, the absorption rate has been shrinking very, very dramatically (as prices have fallen through the floor).

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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.

We may be in a recession with 11% local unemployment, but affordable homes are getting scooped up with multiple offers and in many areas, inventory is shrinking.

Today we’ll look at five areas of San Jose which offer at least some, if not mostly, entry level housing: Blossom Valley, Cambrian Park, Evergreen, Santa Teresa and South San Jose.

Evergreen does have some high-end housing in Silver Creek and elsewhere, but it also provides some very affordable homes for first time home buyers.  Cambrian Park is mostly middle class but it, too, has some McMansions (original Cambrian Park tract with large lots and very old homes that are not infrequently bulldozed) and some homes with views (Vista Loop area, bordering Los Gatos and Almaden Valley).  Blossom Valley has some beautiful properties and many close to thecenics Santa Teresa Foothills.  Overall, though, these homes represent affordable or mid-range houses for sale in Silicon Valley.  When we look at them as a group, it gives a strong sense of what the market is doing generally.

The months of inventory reflect how long it would take the current inventory to be absorbed (or sold off) if no new inventory came on the market and sales continued at the current pace.  Six months is a balanced market.  Fewer represents a seller’s market and more reflects a buyer’s market.  As you can see, April shows a push in all five districts of San Jose into seller’s territory:

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What happened to the strong buyer’s market, where bargain hunters could scoop up great deals at ridiculously low prices?

Many buyers have waited to “find the bottom of the market”. Now’s the time to get off the fence; the market’s turning and is headed into seller’s market territory (at least in some areas and price points).

One of the best ways to understand the real estate market conditions is to track the absorption rate or months of inventory. Approximately 6 months of inventory is a balanced market. Five or less is a seller’s market and seven or more months is a buyer’s market.

Here’s a view of what’s happening among single family homes in Santa Clara County (about 60% of the county is represented by the City of San Jose):

Inventory is down, sales volume is up, the median sales price is up (it had been holding steady at appx $450,000 for the last three months - this is the first uptick we’ve seen this year). The days on market are holding steady at close to 100 and the percent of list price is hovering at around 97%, where it’s been throughout 2009.  No real signs of slippage here, but there are signs that inventory is being absorbed.

Once inventory starts declining, there will be pressure on prices to go up.  (It is supply and demand driven, of course.)

On the flip side, the foreclosure moratorium will be ending shortly and there may be an increase of inventory.  If that happens, it will stem the tide and it will revert into buyer territory.  Until and unless that happens, though, it looks like Silicon Valley real estate is generally turning back to the seller’s favor after three long, difficult years of buyer gains.

The Campbell real estate market is levelling out and even improving in many regards but it does remain a buyers market there now. In this look at the real estate market in the city of Campbell, we’ll use tools and data provided by two subscription services I have, Altos Research and The Real Estate Report, and also I have crunched some numbers from our MLS myself. We will review both the situation for buyers and sellers of houses as well as condos and townhomes.

How is the Campbell housing market? Data from Altos Research.

Altos Research analyses the Campbell real estate market as a whole using list prices (not sold prices - I will use sold prices further on in this post). To get an overview of how the market’s doing, Altos created the “median market action index”. This is an overview of how Altos perceives that the real estate market is doing, factoring in prices, days on market, etc. Below is the median market action index for Campbell (the 95008 zip code).

Altos states that “A value above 30 indicates demand is relatively robust, we call that a Seller’s Market. Below 30 is a Buyer’s Market.” So we can understand that the condo market seems to be improving now and fthe single family home market has been bouncing up and down within a small range since July or so. (Tthe chart below should report whatever is most current, thanks to my having used a little html magic.)

Inventory in Campbell had been rising, but recently is leveling off:

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Ths San Jose real estate market conditions vary wildly from one part of this sprawling city to the next. The high-end neighborhoods of Silver Creek, Almaden Valley, as well as parts of the Rosegarden and some hilly locations with views are all very different real estate markets then downtown San Jose, the Santa Teresa area, Burbank, or east San Jose. Even within each district, there are many smaller markets. Today we’ll have a look at the Cambrian Park real estate market.

How’s the real estate market in Cambrian Park?

There are some plusses for Cambrian Park, being up against some well-to-do areas (Los Gatos and Almaden Valley). The area is a middle-class to upper-middle class area and homes are generally well kept and schools range from good to great. All of these help keep values fairly strong in Cambrian.

Even so, prices are down and sales are down, just like the rest of Silicon Valley. However, it’s not as bad here as in many parts of Santa Clara County.

Houses in Cambrian Park have mostly enjoyed a good absorption rate of under 6 months for most of this year. It’s been a little rougher on the Cambrian condo market though. As with the rest of Silicon Valley condos, they just are not selling as well as houses, most likely because single family homes have come down so much in price that they are more affordable.

Overall, it is currently very close to a “balanced market” in Cambrian Park. That means it’s a reasonable time for both buyers and sellers right now.

Next let’s have a look at the data, statistics and trends for the housing market in Cambrian Park. How are realty values holding up?
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