How’s the Saratoga California real estate market?
This is a fairly comprehensive article on the Saratoga real estate market that will include the live statistics from Altos Research for listed properties (not closed) in Saratoga CA 95070, the closed sale data from the RE Report for last month in Saratoga 95070, and the numbers I crunched for Saratoga – overall and by price point and high school district, since Saratoga has 3 different high school districts, each with an impact on home values.
First, let’s consider the months of inventory by price point and high school district that I crunched using MLSListings.com, our local multiple listing service provider.
The months of inventory is a reference to how fast homes would be absorbed into the market if sales continued at the same pace and no new inventory came onto the market. It’s often referred to as “the absorption rate” – and that can be months of inventory, weeks of inventory, or days of inventory. A “balanced” market is somewhere around 4-5 months for us, though the National Association of Realtors says that 6 months is balanced nationwide. Anything under 3 is a good seller’s market, and under 1 is like saying that homes are “flying off the market.”
(For comparison, please also see a similar article on the Live in Los Gatos blog for the town of Los Gatos – real estate market by price point and high school district.)
Here’s the chart for Saratoga – all price points, all school districts.
And for comparison, here’s the chart from last month:
This month shows a very stable market with minute warming since last month. The overall 1.48 MOI is a hot sellers market showing active Summer conditions. By comparing across school districts you can see how different each area’s individual market can be. The overall MOI for different schools this month ranges from 0.25 to 1.875. Small levels of inventory can create big data swings and can make for less accurate charts. Nonetheless, we can still spot market trends if we know where to look.
How is the Monte Sereno real estate market? Because the city is small, with just about 4000 residents, there usually are few homes listed for sale or selling, and with small numbers we can get seeming volatility. Last month, for instance, there were only four homes sold!
There are no condominiums or townhomes in Monte Sereno at present. One of the major challenges for this city is to ensure that at least some housing units are deemed “affordable.” You can find the city’s housing plan here (a pdf online):
Recently closed home sales in Monte Sereno
Here are the quick statistics for the closed sales in the last complete month to give a sense of how things are going with the Monte Sereno real estate market. Sales data comes from my Monte Sereno Real Estate Report. Given that the supply of homes to study is tiny, what can we tell from this data?
It’s true that an average Monte Sereno house is about $3 million, and often higher in the current market – a little steep for most folks! With only 4 sold and 4 pending in August, the data won’t always be the most accurate. During times like this, it’s more important to look at the trends over multiple months than to base your understanding of the market off a single month, and to compare with similar, nearby markets like Los Gatos.
Below are the charts from the last two months.
|Trends At a Glance||Aug 2017||Previous Month||Year-over-Year|
|Median Price||$3,562,500 (+20.8%)||$2,950,000||$4,000,000 (-10.9%)|
|Average Price||$3,755,000 (+11.3%)||$3,373,000||$4,322,670 (-13.1%)|
|No. of Sales||4 (-33.3%)||6||3 (+33.3%)|
|Pending||4 (0.0%)||4||2 (+100.0%)|
|Active||5 (-44.4%)||9||12 (-58.3%)|
|Sale vs. List Price||97.2% (-4.1%)||101.4%||98.2% (-1.0%)|
|Days on Market||82 (+17.7%)||70||76 (+8.4%)|
|Days of Inventory||38 (-16.7%)||45||120 (-68.8%)|
And a look at the data from the previous month for the Monte Sereno real estate market:
|Trends At a Glance||Jul 2017||Previous Month||Year-over-Year|
|Median Price||$2,950,000 (+8.3%)||$2,725,000||$1,435,000 (+105.6%)|
|Average Price||$3,373,000 (+17.6%)||$2,867,500||$1,720,000 (+96.1%)|
|No. of Sales||6 (-25.0%)||8||3 (+100.0%)|
|Pending||4 (0.0%)||4||3 (+33.3%)|
|Active||9 (-25.0%)||12||14 (-35.7%)|
|Sale vs. List Price||101.4% (+2.2%)||99.2%||96.3% (+5.3%)|
|Days on Market||70 (+84.5%)||38||24 (+194.4%)|
|Days of Inventory||45 (+3.4%)||44||140 (-67.9%)|
Because so few houses sell per month, pricing appears to jump around when that’s not actually the case. I suggest that readers also check the real estate market for Los Gatos to see a larger amount of data. The Monte Sereno home prices tend to be a little higher but generally follow the Los Gatos trends, so it’s worth while to view this info also to get a more balanced sense of how things are for real estate in Monte Sereno. Also, for those considering buying or selling, it’s important to look at the actual listings for each and every sale with similar features, size, amenities to get a sense of your home’s particular subset of the market.
Continue reading to view live Altos Research charts for the real estate market in Monte Sereno, including by pricing quartile. Continue reading
Hearing the real estate market “war stories” about dozens of offers on Silicon Valley properties and overbids ranging from 20 – 55% had convinced me that we were in a Silicon Valley real estate market bubble back in early 2013. At least, this is what a bubble looks like, sounds like, feels like, and acts like. At the time I thought, “how much longer could this continue?” Four years and counting – that is the answer.
I tell my family and friends that we are in “crazyland” as buyers purchase homes with no contingencies of any kind, houses sell in 10 days or less (if everything is right, which seems to be the case 75% of the time), and those same properties are selling at well over list price and with much more than 20% down.
The absorption rate, or months of inventory: it is a Silicon Valley real estate market bubble?
What do the numbers say? I just logged into MLSListings.com and see that right now, in all of Santa Clara County there are 817 single family homes (houses + duet or attached single family homes). The pending and contingent homes measure 1074, far more! That ratio alone suggests that the market is in overdrive. In the last 30 days, 950 single family homes have sold & closed escrow. So the months of inventory is 817 divided by 950 = .86 of a month of inventory, so about 3.5 weeks of inventory. (When I originally blogged about the potential bubble, it was 1.8 months of inventory.)
In other words, things are flying off the shelves. And they have been, with only a few minor blips here and there, since early 2012. Does that sound like a Silicon Valley real estate market bubble to you – a crazy strong seller’s market lasting 4.5 years? I could be wrong, but I think of bubbles as being something fairly swift, not a multi year trend.
Homes are selling faster than new ones are coming onto the market!
It’s one thing to say that one city, town, or school district has a very low months of inventory (or high absorption rate). It is another altogether to say an entire county is that low. This is a major trend, not a tiny blip in the statistics.
How soon we forget that after the outrageously deep seller’s market in 2000, we had a steep drop in 2001. Or that all the crazy buying in the San Jose area (and other places) in 2005-06, combined with bad financial regulations, lead to the crash of 2007-2009. But perhaps that enormous “correction”, in which Santa Clara County lost about 50% of its value on average, had more room to recover than we initially realized. Jobs keep flowing in, and housing starts are not keeping up. Supply and demand – the age old equation. That would seem to refute the idea that this is a Silicon Valley real estate market bubble. Perhaps low inventory and strong demand are what we should be expecting going forward. Continue reading
How are the key housing indicators in the Almaden Valley area of San Jose? At the moment it’s said to be a hot “seller’s market” overall. But look closer and you can see there are clear market micro-climates. Prices are better for sellers, while buyers struggle with higher prices and less homes to choose from.
Almaden Valley Inventory of Houses for Sale
Right now I have a few Almaden Valley home buyers and they have all been disappointed at the lack of inventory. What’s happening?
First, let’s see what “usually” happens in the 95120 zip code in terms of the number of houses for sale. Here’s a look at the last 10 years (all available history), care of Altos Research:
Here you can see that inventory has regular peaks and dips. Inventory tends to rise early each year and peak in mid to late summer. After the peak is a decline through autumn and winter with the lowest point in the coldest part of the year before turning around again before spring.
Now let’s look up close at just the last 3 years.
As usual, our inventory bottoms out in winter and then rises beginning sometime after the Super Bowl or perhaps a little later – at least, that happened until 2017. This year, inventory stayed up longer than usual, not going as low in winter as expected, but instead fell later, when the market is usually heating up! Rather than rising to a peak again in summer, it looks like inventory is continuing to drop or at least remain extraordinarily low. We have hit the bottom (hopefully), but inventory won’t necessarily increase as the year progresses, if seasonal trends are followed. Perhaps the whole cycle is running a little late.
One question I get a lot is this: what does it cost to buy a 4 bedroom, 2 bath house of about 2000 square feet?
So to answer this question, let’s see what houses like this are selling for (4 bed, 2 bath, appx 2000 SF or 185 square meters) and see how the cost looks in one Santa Clara Count y / Silicon Valley area versus another.
Today I compared several areas and cities using this criteria: single family homes of 1800 – 2200 SF, 3-5 bedrooms, 2-3 bathrooms, on lot sizes of 6000 SF to 10,000 SF. Normally I would chart this over the last 2 months, or 60 days, but because of the low inventory causing the sellers market I have expanded the search to the last 3 months, or 90 days, for a better range. As of this writing, Saratoga only had one sale over the last 90 days, so data for that segment may or may not be a good average.
Here’s how it shakes out in the “west valley areas” along the Highway 85 corridor, most of which are known to have good to great public schools. What areas are most affordable? One way of analyzing this is the “price per square foot” figure. Whenever I update the chart, I re-arrange the order of the cities from high to low based on the price per square foot, although there’s usually minimal movement.
To compare, here are the numbers from the this past January 26, 2017. There were fewer sales, so the search range was bumped up to 120 days instead of 90 days (and Los Altos was so low, it was individually searched at 180 days). You might notice price per square foot appears lower across the board in January compared to July. This is most likely because the market has heated up over spring and summer, which you can also see in the DOM.
Below are my results from the same search back in September 18, 2015. By comparison, you can tell that Santa Clara’s average Price has increased, pushing it above Almaden and Campbell.
How competitive is the market? Have a look at the DOM or “Days on Market” figure. All of these days on market are short, but they range from low to heart-skippingly fast.
In most cases, the priciest and most desirable places have either the best schools or shortest commute location or both (Palo Alto and Cupertino have both). Had I ranked these for school scores, you’d find that Cambrian is fairly high up and a good “bang for the buck” location – though not a super short commute for folks who work in Mountain View (though not so bad for people working in Cupertino). Almaden, too, offers a good value for the quality of the schools, homes, and neighborhoods, though the commute is longer. None of these is especially close to North San Jose (where a major employer is Cisco).
It should also be noted that in some of the smaller communities with less on the market these numbers may not be as stable as others with more data – for instance, Los Altos only had four homes sold, the second lowest, matching this criteria within the 90 days of collected data, and therefore may not be as accurate as others, such as the Blossom Valley area of San Jose with the most data at 38 homes sold. For these smaller communities with less data, it is beneficial to look at them more closely – Saratoga, for instance, has 3 different high school districts which have an impact the real estate prices. This chart is really just a snapshot to give a general sense of the relative affordability of these markets to one another. Continue reading
Often I have clients who are interested in purchasing a 4 bedroom, 2 bath home in a good school district in Silicon Valley, particularly in the South Bay and West Valley areas. Tonight I did a study on the MLS of homes that have sold and closed escrow in the last 4 months with these characteristics:
- single family home (house)
- 4 bedrooms
- 2 bathrooms
- 1800 to 2200 square feet of living space
- 6000 to 10,000 sf lot
Disclaimers aside, here are the numbers for select West Valley Communities in the West/South Bay area with good schools. The first number is the average sales price per square foot, the second number is the average sales price:
And a look at the chart from all back in 2015…
And all the way back in 2011. What’s changed? A lot! The order has shifted some, showing where demand has increased or decreased. Most noticeably, the prices are significantly lower in 2011 than they are now. The 2015 chart shows prices somewhere in-between the 2011 and 2017 levels. Palo Alto and Los Altos remain consistently in the top two positions.
The home prices tend to run with the school district API scores. You can check the 2013, three year average, API scores in Santa Clara County for both the districts and the individual schools online here. Continue reading
Why is it so hard to buy a home in Silicon Valley? Most of it has to do with our ongoing and severe inventory shortage.
I initially wrote the article below on Feb 9, 2012. I thought it was bad then – and I suppose that relatively speaking, it was. But it’s much worse now!
Today is May 1, 2017, and I ran the numbers of available single family homes in Santa Clara County in a chart comparing since January of 2012. Have a look, and please note the year over year numbers:
The situation has only intensified since I first wrote this article in early 2012. There are many reasons for the problem: older people won’t sell for tax reasons (mostly capital gains). move up buyers who elect to stay and add on rather than deal with hugely increased property taxes. In general, home owners are opting to “buy and hold”.
Is it hard to buy a house in the San Jose area? You bet. And unfortunately, I don’t see an end in sight anytime soon.
Original article: Feb 9, 2012
Right now I’m working with a number of very frustrated home buyers. Silicon Valley real estate inventory is painfully low, and in the lower price ranges especially, that means multiple offers are fairly common. FHA home buyers, in particular, are getting out bid and out negotiated by all cash buyers, many of whom are investors.
How low is the inventory? Let’s have a look at January’s inventory for houses & duet homes (“class 1” or single family homes) over the last ten years in Santa Clara County (San Jose, Los Gatos, Campbell, etc.):
The average January inventory of available houses over the last 10 years is 2,636. At 1,382, January 2012’s available inventory of houses for sale in the San Jose area was just 52% of normal. Continue reading
Today consumers have a lot of choices as to where to search for properties for sale in Silicon Valley (the South Bay area, Santa Clara County, San Jose, Los Gatos, Almaden etc.). But not all “find a home” sites are equally accurate. Some websites display listings that are sale pending, sold & closed or even withdrawn.
The very best, most accurate and most often updated site is the public branch of our agent-supported Multiple Listing Service or MLS, which is MLSListings.com. You can find it at www.MLSListings.com. (If sending your own agent info a house, it is helpful if you provide both the street address and the MLS #. By the way, the first few digits of the number imply the year that the listing was put into the system. 811 = 2011. 810 = 2010.)
Why is MLSListings.com the best source for finding Silicon Valley homes for sale?
It is updated constantly. Within a few minutes of whenever a real estate agent or broker changes the listing status, comments, photos, showing instructions, open house information,etc., the new information is displayed on MLSListings. While it’s not instantaneous, most changes appear within 5-10 minutes (photos being the slowest to load).
MLSListings is syndicated out to some other sites, but some don’t update often (or at all). Other sites rely upon the listing agent to go to that one site and update the status. Realtors and other licensees get busy and this task may slip through the cracks, making you believe that a home is available when it’s not. MLSListings.com is the source.
You don’t have to register. Some of the portals that you might consider visiting to view the MLS info may not include the virtual tour or all pics – or might show them to you only if you register. You do not need to register to view houses, condos, townhouses, multi units etc. on MLSListings.com. Continue reading
It’s possible to live in Silicon Valley and have no idea that there are still some original adobe houses to be found right here in the San Jose area. Today, though, I hope to help some of our residents discover the past which is lurking right in front of us!
The historic Adobe Woman’s Club is just a block or two off the campus of Santa Clara University, tucked away on a side street now that The Alameda is re-routed as The El Camino. Address: 3260 The Alameda, Santa Clara. According to the state’s historical preservation site, this state landmark # 249 is one of the oldest in the Santa Clara Valley, was built between 1792 and 1800 and was one of many row houses built for the native Americans who worked at Mission Santa Clara. Please note that this is private property and you may not enter without permission, but the adobe abode is very visible from the sidewalk.
Today the beautifully preserved adobe house functions as a nonprofit group with these objectives: “to promote educational, moral, social welfare, cultural, civic and community service. Anyone who supports these objectives is welcome.” This scenic place can also be rented out for private events. The garden is quite lovely and the interior appears to be very modern. You can see photos of the inside of the house at the club’s website: The Santa Clara Woman’s Club.
Home buyers in Silicon Valley are getting frustrated, discouraged and disheartened as they write offer after offer, only to lose out in multiple bid situations. It’s not just the poor FHA home buyer either – this is happening to those with 20% down and more too. Yesterday I had about a dozen and a half offers on my cute listing in Santa Teresa, and had the unhappy task of telling all but one of those Realtors that their buyers did not get the house.
What can be done to improve the odds of success?
Usually losing out is a simple case of the best price and terms winning out. (I wrote a series of articles on how to compete in multiple offers that you can find here.) At times, though, there’s a bit more nuance, especially if there are two or more bids which are “neck and neck” or nearly tied. Sometimes the buyer’s agent either does or doesn’t do certain things which can impact how your real estate purchase offer is viewed by the listing agent and seller(s). Here are 5 important things that the buyer’s Realtor or sales person can do which will help the odds of success:
- The agent should read the MLS printout carefully to see if there are any instructions regarding offers. This one may seem obvious. but too many buyer’s agents just draft the offer and send it in, ignoring information that will probably be useful (such as offer deadline, preferred form – CAR or PRDS contracts, availability of disclosures, the request to call before writing the contract etc.). Ignoring clear instructions will usually result in creating bad feelings between the parties, and lessen the odds of success.
- The buyer’s agent should call or email the listing agent before writing the offer (and after reading the MLS!). Sometimes there are requirements or just preferences that won’t be known unless contact is made. Additionally, though, the listing agent will simply want to know about the level of interest and not have any surprises – it’s a courtesy call. If the relationship between real estate agents is improved, so are the odds of success.
- The agent should ask if it is possible to present the offer in person… and be willing to do it, of course. Many seller’s agents won’t want a live presentation (most would email), however the fact that your agent is willing to spend the time and make the effort to present in person usually speaks volumes about his or her professionalism. It’s also a hint that the agent is a cut above most. In my real estate practice, several times I beat out other offers by asking if I could meet with the listing agent and sellers to discuss my clients’ offer, and then doing it. (With my multiple offer situation yesterday, only 3 agents requested to present to me live. One of them had the winning contract. Of course, the rest of the package was also super strong – but this one step is a clue to the whole offer strength and commitment.)