Yesterday we looked at the types of home sales around Silicon Valley by price point.  Not terribly surprising, most of the short sales and bank owned homes were in the lowest price ranges.  Today we’ll look at this type of information not by pricing tier but instead by geography – in other words, by either town, city or district of San Jose (area).  This post will not cover every area but will be a sampling a few communities, mostly on the west side of the valley (since that’s primarily where I work).

By way of reminder, the small image to the left reflects Santa Clara County’s houses for sale as a whole – all areas and all price points. (You can see the full sized image by clicking on it.) The green area represents “regular home sales” and the brick red and light orange signify distressed  properties listed on the MLS for sale (red is short sales and orange is bank owned or REOs). Next let’s see a few regions within the county to see how things are faring geographically.

1. Almaden Valley area of San Jose – homes listed for sale by type – very few distressed properties on the market!

Almaden is a lovely southwest San Jose suburban community (zip code 95120) that grew up initially with the cinnabar or mercury mining activity.  Today it’s an upscale area of more expensive homes than most of the county, it enjoys really good schools and scenic views of the coastal range as well as the Santa Teresa Foothills.  Housing here is costly but residents love the quality of life. Since the cost of homes for sale here is high, it’s not super surprising, after seeing yesterday’s post, that there are very few distressed homes on the market here. Next we’ll check the other extreme…. (more…)

Silicon Valley home buyers who are looking for a good deal can’t help but notice that prices on short sales and bank owned homes are a bargain compared to regular sales in the San Jose area. But what exactly ARE they? What’s the difference between a short sale and a foreclosure? What are the risks involved in buying one of these in Santa Clara County? Today we’ll have a look at the various types of distressed properties and the risks associated with purchasing each.

What are short sales?

Short sales are when home owners need to sell their home but there’s not enough equity in the property to pay off the loans and closing costs.  So the only way they can sell is if the bank agrees to accept a “short payoff“.  The bank or banks get paid in short, hence short sale.

The Santa Teresa area of San Jose is enjoying a hopping real estate market with the number of pending sales suddenly going through the roof! (Stat below care of Altos Research, to which I have a subscription. List prices are used.)

Homes in this part of south San Jose are often selling over list price as inventory drops. The days on market appears slow, but a lot of homes that have been “just sitting” on the market are now selling.

The great rush in Santa Teresa is, of course, in response to the list prices, which have been falling steadily in most areas – and making for incredible bargains.

Here are the August sales stats for our MLS “area 2″, Santa Teresa (per the REReport, also a subscription, which uses closed sales):

With more pending sales than active ones, you can see that most houses are now selling and the pace is quickening.  A major player in the market conditions of this part of San Jose is the situation with distressed properties: foreclosures, short sales or homes sold under pressure as they’ve got a notice of default on the property.

How big an impact does the REO or short sale label have on a home’s eventual sales price? How much more or less will a home sell for based on the situation as a “regular sale” or “bank owned” or “short sale”?
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