How is the Campbell condo and townhouse market?  The answer may well depend on both what part of that market we’re discussing and which data we’re focusing on.

The absorption rate, or months of inventory, indicates that it’s a seller’s market:

The hottest segment is the bank owned or REO part of the Campbell condominium or townhouse realty market, and the slowest segment is the short sale section (which is about 20% of the available inventory). That’s very typical of other nearby areas: the hardest homes to sell are the short sales.  As a side note: there are 39 condos available and 29 which are sale pending. That is a high ratio, which also points to a seller’s market.

How does this compare to a year ago?  It’s completely different!

A year ago, the months of inventory was a whopping 72% higher at 8.8 for May 2009 vs 2.5 for May 2010. Solds are up 42% from 12 months ago.  Pending sales are up 200% from a year ago also.  So from every vantage, it’s much, much better than a year ago.

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Next week I’ll be putting a Willow Glen house on the market so have been paying attention to the trends & statistics for this charming part of San Jose.  Here’s a look at the absorption rate for Willow Glen houses and duet homes (numbers run yesterday) by price band.

Willow Glen Months of Inventory June 17 2010

My Real Estate Report provides numbers (which I don’t have to crunch!) on a monthly basis for all of Santa Clara County, including the Willow Glen (area 10, mostly 95125) part of San Jose.  It’s a good, broad view of the Willow Glen market overall.  Here’s the summary for the  May 2010 Real Estate Report for Willow Glen – June’s info will be out sometime in early July. Click on the link to get all the data rather than just this quick view.

The Willow Glen real estate market trends are up month over month for the median & average sales prices, but the average sales price is still down year over year.  Pendings are down compared to April (possibly a reaction to the federal home buyer tax credit?) and year over year.  The list price to sales price ratio is up, though, and the days on market are shorter.

Looking at both sets of numbers, mine and the REReport’s, it is clear that the homes priced up to about $900,000 are the ones leading the recovery, and that the most expensive homes are not selling well at all.  When we began to see improvement in the market, it was first entry level houses that were selling well.  Eventually it spread to the move-up market, both here and throughout Silicon Valley.  Will it continue?  The very high end homes in Santa Clara County are selling much better than they were a year ago, but as you can see, there’s still loads of room for improvement for the luxury homes market.

In Almaden Valley, like in other parts of San Jose and Silicon Valley, some parts of “the market” are hotter than  others.  The real estate sweet spot appears to be homes priced in either the entry level or move-up markets – but things cool considerably as the homes become more elegant, grand and luxurious.  (This appears to be true across all of Santa Clara County: the most affordable homes are still the hottest segment of the realty market.)

Months of Inventory in Almaden Valley

Here’s how the current inventory and sales breaks down, together with the months of inventory, for the Almaden Valley part of San Jose (95120 zip code). Info from MLS Listings deemed accurate but not guaranteed. The “closed” column represents homes closed (houses & duet homes) in the last month.

As you can see, up to about $1,200,000 it’s a very strong seller’s market with less than 2 months of inventory. But beyond that price point, it’s suddenly a completely different market and is instead a very strong buyer’s market.

What about distressed property sales in Almaden?

There are almost no bank owned properties currently for sale or recently closed in Almaden – just 1 in the entry level price band which is currently listed for sale.

There are not many short sales in Almaden: right now just 5 for sale: 3 in the lowest of these five price groups, 1 in the 2nd lowest and one in the highest. Closings among short sales are also few in number: 2 in the lowest price point and one in the second lowest.  The absorption rate or months of inventory among short sales was 1.5 in the lowest price point and 1 month in the second lowest. No closings among higher priced homes that were also short sales in the last month.
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The condominium & townhouse market is improving dramatically now.  It is evident both in looking at the stats countywide and in my recent experiences holding open my townhouse listings in Saratoga and Sunnyvale as well as recently participating in the sale of a townhome in Almaden Valley (representing a buyer) – all different areas and price points but all very active.

Here are the numbers for May sales of condos and townhomes for all of Santa Clara  County:

As you can see, the days on market are shrinking and prices (both median and average) are rising.  A few numbers cut back slightly in May: the sale to list price ratio retreated a little to 99.9% and the pending properties went down a little too.  But the number of sales were up.

The “months of inventory” or absorption rate is a great way to know how much of a buyer’s or seller’s market it is in any given place. Six months is considered balanced, less is a seller’s market and more is a buyer’s market.  Here are the months of inventory for selected communities in the “west valley” area of Silicon Valley – they are all “seller’s markets”, but some are strong and some are approaching balanced:

Of course, this is still painting with a broad brush.  The absorption rate for any of these areas may not be accurate for the various price points or school districts that might be found there.  For instance, a large luxury townhouse in Los Gatos which is downtown might be a really different type of market than a small, entry level one bordering Campbell or Cambrian Park.

What everyone’s wondering is if this seller’s market for condominiums and townhouses will continue despite the end of the federal home buyer credit.  To utilize that credit, homes had to be in contract by April 30th.  Most of those should be closed now, or nearing that date at best.  So we’ll really know more as we move into summer. My sense, though, is that what’s driving this market is much more the affordable prices of homes and of loans. The credits are a bonus, but many in Silicon Valley make too much money to be able to use them.

For information on your particular part of the Silicon Valley condo or townhome market, please give me a call or email me!

Cambrian Park is a district of San Jose which borders Los Gatos, Campbell, Almaden Valley and Willow Glen (the last two are also part of the city of San Jose).  It’s got a population of about 77,000 between the two main zip codes, 95214 (about 45,000) and 95118 (about 32,000 residents).  (There’s also a little sliver of 95008, but most of that area is covered by Campbell.) The 95124 area tends to be a little more expensive and a ittle less densely populated (7075 people per square mile in 95124 vs 7595 per sq. mile in 95118).

How’s the Cambrian real estate market?  Right now, it is a strong seller’s market.  This doesn’t mean that all homes are selling or that prices have returned to their peak, but in general, homes are selling briskly, much faster than a few months ago. As you can see from the Altos chart below, the average “days on market” has been falling over the last 90 days.  It is interesting to note that in the last 90 days, the more expensive area of Cambrian (95124) is selling a bit better than the more affordable.  This is a switch from the not so distant past, as you will see in the chart following this first one. (Charts below from Altos Research, to which I have a subscription.)

Average Days on Market for Cambrian Park homes for sale(San Jose zip codes 95124 and 95118)

We can look back further and see that the market does seem to have changed in recent months from the trends of the last few years. The longer time frame below also visually accentuates the change in the DOM. (Please note that from about 2007 to 2008 the 95118 area was selling faster – then the two areas were in a dead heat – and now 95124 is selling quicker.)

Average Days on Market for Cambrian Park, San Jose houses over last 3 years

Cambrian home buyers will tell you that homes are selling a lot faster than they used to, but also that prices are rising, especially among entry level priced homes. It is getting harder and harder, especially for first time home buyers, to get their foot in the door in Cambrian.

Cambrian Park, San Jose (95124, 95118) average list prices last 90 days

For those actively involved in the Cambrian Park real estate market, it’s no surprise that the sellers are now in the stronger position – especially if their homes are in good shape and well priced.

Perhaps the very best tool for understanding the realty market, though, is not a chart showing pricing or inventory or sales, but rather is the  absorption rate. This number factors the available homes or inventory to those which have closed in a recent period of time (it can be by days, weeks or months).

Next we’ll focus on the Cambrian absorption rate, particularly the “months of inventory“.  According to the National Association of Realtors, 6 months of inventory is a balanced market, less is a seller’s market and more is a buyer’s market. Today I ran the numbers from MLSListings.com using the sales recorded in the last 30 days to bring you current info on the Cambrian market and those are the figures we’ll use next. (“Sold” refers to homes which have closed escrow.)

For our MLS area 14, which corresponds to Cambrian Park, right now there are a mere 2 months of inventory for houses & duet homes.  By itself, this means that it’s a strong seller’s market in Cambrian.  That doesn’t tell the whole story, though.  If we break it down to “type of sale” (regular, short sale, bank owned) we get even better information. Here’s how these categories line up for the absorption rates or months of inventory:

As you can see, it’s twice as hard to get a “short sale listing” sold vs a regular sale type of property in Cambrian – regular sales are at 1.9 months of inventory while short sales are 3.8 months.  But the hottest segment of the market is bank owned homes, which are flying off the market (thanks to their bargain basement prices) at 1.1 months of inventory.

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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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