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.):

2012  1,382
2011  2,007
2010  2,426
2009  4,759
2008  4,872
2007  2,698
2006  2,202
2005  1,285
2004  1,612
2003  3,119

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.  It’s not really much different now, in early February (just did a quick check on the MLS and it’s  1509 houses now – 630 have sold & closed in the last 30 days so that’s 2.4 months of inventory – a hot seller’s market).  This is what constitutes a very severe inventory shortage.

Demand hasn’t slackened, but supply has.  You know what that means – it will push prices up, it will make buyers crazy feeling.

Why is inventory so low?

A common question is this: why is inventory so low?  I believe that there are a few drivers.  First, many home owners who would like to move really need more equity to do so.  They are waiting for the market to recover.  Some may be waiting for prices to return to their previous highs (they could be waiting awhile). Others just need a little more to make the move possible at all.

Many owners of higher priced homes are holding on until the second half of 2012, when it is expected that there will be more people with buying power due to recent and upcoming IPOs.  Economists are now predicting a bit of a frenzy the second half of this year with prices in more expensive homes getting pushed up due to competition from employees of various high tech firms.  Smart buyers are trying to get in before that hits – a real challenge given the inventory situation.

Reality check: not every house is selling!

The best properties are selling well – those which are newer or nicely remodeled, in turn key condition, easy to see, great marketing with multiple photos, appropriate MLS exposure and priced aggressively.  This is what every buyer wants, the perfect house.  Most of my clients tell me that they are willing to replace carpet and repaint, but they don’t want to do anything big, such as kitchen or bathroom remodels, removing a pool, foundation or drainage repairs, etc.  No one does!

One of the easiest ways of improving your odds on being able to purchase a house is to move away from the new or fully remodeled vision of your ideal house.  Lower your budget a little, decide to prefer homes that have been sitting on the market not due to location issues, but rather to pricing or condition issues – both of which can be fixed.

For instance, many home buyers will take a pass on properties which have a pool in the backyard.  A few months back, I did some research and found that houses with pools are harder to sell right now.  Appraisers count a pool as an improvement, but many consumers view it as a liability – an ongoing monthly expense to heat and maintain and a risk if there are small children.  Many think that it will be overwhelmingly difficult to remove and relandscape a pool, so will not even consider writing an offer if the property includes an in ground pool.

Truth is, it’s not that hard to hire a company to redo a backyard; it is not invasive the way a kitchen remodel is.  You could have it done before even moving in!  The cost varies on whether you want the pool fully removed or partially as well as how to relandscape afterwards.  I have seen bids for pool demolition work under $10,000 (relandscaping extra) with more bids between $10,000 and $25,000.  Lawn and sprinklers are not so expensive to add!

The pool issue is just one example – there are many other properties for sale which are passed over due to the condition not being ideal.  Remodeling can feel a little scary but when inventory is so tight, it can be the ticket to home ownership.

Likewise with over priced properties.  Although most homes sell within a couple of percent of list price, there are exceptions.  Sometimes real estate is badly overpriced, and in those cases you may get a seller to agree to a larger price reduction – 10% may even fly.  (This is unusual, I would note. Usually if a house is not worth within 5% of list price, the seller is unreasonable and won’t accept an offer which is less. But sometimes it can work.)

Here’s to the over priced ugly duckling.  It could be your best friend when inventory is rock bottom!

How’s the Saratoga California real estate market?

Annual Saratoga CA Real Estate Update:

Saratoga’s prices slipped a bit in 2011 over 2010.  Here are the basic numbers with the stats for the annual review, including median sales price and average sales price of houses sold (see the Saratoga Real Estate Report for even more data):

Median Sale Price 2011 = $1,480,000   2010 = $1,510,000 (-2.0%)

Average Sale Price 2011 = $1,636,300   2010 = $1,657,140 (-1.3%)

For condominiums and townhouses it was stronger (finally, they’ve taken a beating!):

Median Sale Price 2011 =  $660,000     2010 =  $612,500 (+7.8%)

Average Sale Price  2011 = $684,500    2010 =  $640,895 (+6.8%)

To see much more information please visit the full annual Real Estate Report for Saratoga condos and townhomes

Monthly Real Estate Update for Saratoga:

Sales of single family homes were up but prices were down month over month – but way, way up over December 2010! It’s taking much longer to sell houses compared to a year ago too – but look at the prices from a year ago – the low price went with a very brisk sale time (average 17 days on the market).  That was nuts both for low pricing and for speed!

What about Saratoga condos for sale and sold? There are very, very few of these which sell in any given month, so the numbers can very easily jump around like crazy – and therefore aren’t terribly helpful. 

Days on market are double a year ago and triple even a month ago (this IS helpful), prices are down from last month (but again, that can mean very little since a Saratoga Oaks townhouse with a view will sell for much more than a small condo with a less desirable location).

To really understand the condo and townhouse market it’s better to see actual sales and compare them quarter by quarter, using similar units.  If you are interested in buying or selling a condo or townhouse in Saratoga, don’t go it alone or rely on online stats – give me a call and we will crunch the numbers specifically for your home and pinpoint the pricing.

Median List Prices of Saratoga Homes for Sale

First, a graph displaying the overview of the median list prices for condominiums and single family homes in Saratoga – all price quartiles combined:

In general, the seller’s market is showing itself for houses in the fact that list prices are rising.  Not so with condo and townhouse pricing. That’s a much cooler market.

Next, the median list prices for single family homes with a breakdown by price quartile. (Please note that the info would be even more precise if broken down by school district, but this particular program doesn’t yet filter by schools.)

In most price points, the list prices are now rising slightly, but most of all in entry level homes. In the last few months we’ve seen the high end home sales start to pick up in Saratoga, with a good run up in late 2010 before sliding earlier.  Starting to improve now, though.

And now, list price of condos by price quartiles.

Interestingly, the condo market is not enjoying at all the decent seller’s market seen among houses in this city.  Every price point appears to be suffering, but the high end most of all.

Inventory of both houses & condos in Saratoga

It’s seasonally typical to have more inventory in summer than other times of the year. Going back a few more years (see below), please note where the peaks are found – always sometime in summer. (Single family homes only.)

It’s less clear, but still visible, with condominiums and townhouses in Saratoga:

Average Days on Market for Saratoga Homes for Sale

Houses by quartile is not much different – DOM was rising across all price points and has been since August until spring, when the bottom and two quartiles (blue and green) reversed the trend. These are the “hotter”or improving segments of the market right now.

It is strangely disjointed in the Saratoga Condo market, though. I can’t explain why this had been so “all over the board” based on just this data. But since August, all four groups appear to be following the same general trend.

My suspicion is that the homes with the better schools are faring the best, but that’s just a hunch based on how well homes usually sell – it’s not provable with this info at hand.

If you’re interested in buying or selling a Saratoga home, please contact me. I’ll be happy to meet with you for a no obligation initial consultation.

Saratoga Real Estate Listings – Saratoga Homes for Sale – Condos, Townhouses & Houses for Sale in Saratoga

If you’d like to browse Saratoga homes for sale, I invite you to have a look here! Below please find all properties currently listed as available on our local MLS.  Please be advised that there are a number of different property types and school districts listed here.  For more precise information on houses, condos or town houses on the market, please contact me via email or complete a form at SiliconValleyHomeHunt.com or on my popehandy.com website.  Either way it will come to me and I will personally set up your search for a Saratoga property. (If you are moving to the South Bay area from far away, please also see my Silicon Valley relocation website for helpful tips.)

Showing properties 1 - 5 of 68. See more city of Saratoga real estate.
(all data current as of 2/10/2012)

1. $3,285,000 : 14982 Sobey Rd, Saratoga
   
   6 beds, 5 full, 1 part baths

   Home size: 4,895 sq ft

   Lot size: 1.04 ac
   
2. $915,000 : 18775 Mcfarland Av, Saratoga
   
   4 beds, 2 full baths

   Home size: 1,894 sq ft

   Lot size: 10,000 sq ft
   
3. $2,495,000 : 12888 Chiquita Ct, Saratoga
   
   4 beds, 3 full, 1 part baths

   Home size: 4,400 sq ft

   Lot size: 1.01 ac
   
4. $890,000 : 14451 Oak Pl, Saratoga
   
   2 beds, 2 full baths

   Home size: 913 sq ft

   Lot size: 8,925 sq ft
   
5. $625,000 : 14660 Big Basin Wy #C, Saratoga
   
   3 beds, 2 full baths

   Home size: 1,408 sq ft

   Lot size: 1,496 sq ft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Today we’re looking at the real estate market for houses in some of the “west valley” communities along the base of the Santa Cruz Mountains – areas where schools are good, crime is low, residents enjoy scenic views of the hills (or of the valley from the hills, depending on the location) and overall, a highly educated population not too far from Highway 85.

Of the four municipalities, three are really very similar to each other in several regards.  Cupertino has the largest population – about 58,000 people – but Los Altos, Los Gatos and Saratoga are all similarly sized, somewhere between 27,000 and 30,000 residents.  The latter three also enjoy a traditional “downtown” area which is popular with pedestrians, bicyclists and motorists alike. (Monte Sereno has 4,000 residents, which is so small that the statistics are very easily thrown from month to month, so it is omitted in this quick study.)  Of the four, Cupertino, then, is the least similar due to size and lack of a central downtown area.

We’ll take a quick look at these areas now in terms of the real estate market trends and statistics for each area, considering just “class 1″ (houses and duet homes).  The charts used below are from Altos Research, to which I have a subscription, and they will be automatically updated each week.

(1) Median List Price (per Altos Research):

Los Altos and Saratoga are neck and neck for most expensive areas in which to purchase a house. Over the last year, though, Los Altos has seen a rise in the median list price. There has been a corresponding rise in demand with the success of several local companies in the region (Apple, Google, Microsoft, LinkedIn, Facebook), some of which have gone public and others of which are on the verge of doing so. Los Altos is more convenient to most of these.

Los Gatos, which is a little more affordable than Saratoga and Los Altos, has seen a very noticeable increase in pricing also, while Cupertino’s prices have declined a little.

(1A) Median list price of the bottom quartile of all four:

(1B) And, very interestingly, same data but for the top quartile – the luxury market:

Here we see Los Altos clearly overtaking Saratoga! And also that Cupertino’s pricing is significantly lower than Los Gatos in this tier, and also that it has lost a lot of ground in the second half of 2011. 

(2) Inventory:

The inventory patterns are pretty consistent over the last year across all four cities and the town of LG.

(3) Average days on market:

It is really interesting to see the days on market by city or area. Los Gatos (the furthest from the high tech giants mentioned above) has had the hardest time with home sales, and Cupertino the easiest. Cupertino is not the closest to all of these firms (though its home to Apple, of course), but it is the a very good value for people who are buying homes based on school performance tests. As others have said, if you’re buying for high API scores, Cupertino offers the most “bang for the buck”.

(4) Median MAI – Market Action Index:

What’s hot?  Everything is under 30, which is the cutoff between buyers’ and sellers’ market – all of these are buyers’ markets when the areas are taken as a whole:

But tease it out by price quartile, and we can see that Cupertino was a seller’s market for the most affortable houses for awhile last summer, but it has crashed back into the buyers’ market range again:

And among the most expenses homes or luxury estates, Cupertino has the “best market” but not by a huge margin:

Right now, Los Gatos has the most inventory and is the deepest buyers’ market – making it an excellent time to purchase a home there!  Of course it always depends on the micro market – the exact neighborhood, condition of the home etc. but overall it’s a very favorable time to purchase a house in all four of these areas, but Los Gatos in particular.  Cupertino is a little more affordable and remains a great bargain in the west valley areas of Santa Clara County.  High end housing or luxury homes are the softest market of all – a tough time to sell but a great time to buy.

Interested in buying or selling a home in Silicon Valley’s west side or nearby? Please call or email me and we can discuss your plans & goals – no obligation.  mary (at) popehandy (dot) com or 408 204-7673

The Campbell, CA, real estate market for condos and townhouses has been a little up & down, but for houses it’s a stronger market.  That does not mean that prices in Campbell are where the owners or sellers would like them to be – just that residential real estate which is appropriately priced is selling pretty well.

Here’s a visual of market conditions (not prices) generally, through June 2011:

What about prices and home values?  Are they holding up?

Campbell houses for sale:  prices appear to be slipping slightly.  Some volatility is to be expected this year and next, so it’s possible to see some up and down (but probably not super dramatic unless you just barely have equity and it’s the difference between being able to sell without bringing money to the closing table or not).  Here are the figures for June – see the whole report on my R E Report site for Campbell CA houses:

The market for houses is good, but pricing is soft, as you can see in the numbers above.

What about for condos?

Condominiums and townhouses in Campbell – see the full real estate report online (updated each month around the 5th – 8th).  Isn’t it interesting that although it’s a cool or cold buyer’s market, prices there are actually inching up pretty noticeably.  That is very good news to condo and townhome owners who want to be doing a “move up”.

Next we’ll take a brief overview of the “big picture” in Campbell’s housing market by looking at statistics related to currently listed homes for both houses and condos or townhomes there. (Charts and data by Altos Research, to which I have a subscription and permission to use here.)

Median Price of condominiums and single family homes:

It’s interesting to see that there’s a rise in the median list price of houses for sale in Campbell whereas a leveling off with the condos and townhouses.

Inventory of houses and condos and townhouses in Campbell – both classes of housing are seeing a rise in inventory, but it’s more dramatic among houses:

Days on the market for homes for sale in Campbell – the two “markets” are now dialectical!

These numbers – for both houses and condos – can only give you a broad picture of what’s going on.  If there are no homes for sale in your townhome community and it’s in a great area, and you price it well etc., you should find it relatively easy to sell.  But if there is too much supply (too many similar homes on the market), it will be far more challenging to sell.

The residential real estate market, like everything else, is all about supply and demand.  For information on your specific neighborhood, please call me or email me today.

For more reading on Campbell CA real estate:

Affordable, Inexpensive Real Estate and Houses for Sale in Campbell, CA

Campbell, California: Once the Heart of the Fruit Canning Industry

Find Campbell, CA Houses for Sale:

Showing properties 1 - 5 of 30. See more city of Campbell real estate.
(all data current as of 2/10/2012)

1. $1,149,000 : 743 Virginia Av, Campbell
   
   4 beds, 4 full baths

   Home size: 2,600 sq ft

   Lot size: 11,100 sq ft
   
2. $456,000 : 1169 Longfellow Av, Campbell
   
   3 beds, 2 full baths

   Home size: 1,155 sq ft

   Lot size: 8,211 sq ft
   
3. $830,000 : 1172 Lovell Av, Campbell
   
   4 beds, 2 full baths

   Home size: 2,114 sq ft

   Lot size: 14,375 sq ft
   
4. $799,900 : 1300 Patio Dr, Campbell
   
   3 beds, 2 full, 1 part baths

   Home size: 1,842 sq ft

   Lot size: 7,194 sq ft
   
5. $835,000 : 1276 W San Tomas Aquino Rd, Campbell
   
   3 beds, 2 full baths

   Home size: 2,011 sq ft

   Lot size: 10,519 sq ft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Browse Campbell, CA Condos Listed for Sale on the MLS:

Showing properties 1 - 5 of 8. See more city of Campbell real estate.
(all data current as of 2/10/2012)

1. $246,000 : 597 Valley Forge Wy #4, Campbell
   
   2 beds, 1 full bath

   Home size: 840 sq ft

   Lot size: 1,750 sq ft
   
2. $325,000 : 67 Dot Av, Campbell
   
   2 beds, 1 full, 1 part baths

   Home size: 1,060 sq ft

   Lot size: 900 sq ft
   
3. $379,000 : 860 Apricot Av #E, Campbell
   
   2 beds, 2 full baths

   Home size: 1,065 sq ft

   Lot size: 1,306 sq ft
   
4. $270,000 : 2785 S Bascom Av #22, Campbell
   
   3 beds, 2 full, 1 part baths

   Home size: 1,262 sq ft

   Lot size: 740 sq ft
   
5. $508,000 : 912 Campisi Wy #205, Campbell
   
   2 beds, 2 full baths

   Home size: 1,485 sq ft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

View townhouses or townhomes  in Campbell, California, listed for sale on the multiple listing service (MLS):

Showing properties 1 - 5 of 12. See more city of Campbell real estate.
(all data current as of 2/10/2012)

1. $397,900 : 721 W Hacienda Av, Campbell
   
   3 beds, 2 full, 1 part baths

   Home size: 1,572 sq ft

   Lot size: 4,400 sq ft
   
2. $399,900 : 101 W Rincon Av, Campbell
   
   2 beds, 1 full, 1 part baths

   Home size: 1,141 sq ft

   Lot size: 1,168 sq ft
   
3. $510,000 : 576 W Hacienda Av, Campbell
   
   3 beds, 2 full, 1 part baths

   Home size: 1,820 sq ft

   Lot size: 2,400 sq ft
   
4. $345,100 : 236 W Rincon Av #C, Campbell
   
   2 beds, 2 full, 1 part baths

   Home size: 1,319 sq ft

   Lot size: 1,306 sq ft
   
5. $599,000 : 1967 Dry Creek Rd, Campbell
   
   3 beds, 2 full, 1 part baths

   Home size: 1,558 sq ft

   Lot size: 1,176 sq ft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

How’s the inventory?  This is key to both home buyers and sellers in Santa Clara County. Too little inventory of homes for sale pushes prices up, too much housing inventory pushes them down.  Today we’ll have a look at the county level for the general Silicon Valley trends.  Please understand that smaller areas (zip codes or even subdivisions) can be vastly different from the larger trends.

Our MLS no longer provides much historical data – it only goes back a couple or three years.  My I have a subscription to the Real Estate Report, which stretches back a decade.  The most current report covers January 2011 (February’s numbers will be there by the 10th of March) so I pulled these numbers plus those of the same month for prior years.

So what is really a “normal” level of inventory for Santa Clara County houses & duet homes on the market?  I would say that anything in the 2000 to 3000 range is fairly normal.  More than that is overheated, less than that is constricted.  (In the early 90s it was many thousands of homes – if I recall correctly, it was over 8,000.)

Right now is not an extreme market in terms of the availability of homes to purchase in the South Bay.  It feels tough because lending standards are stricter, as are appraisals, and because we are all jittery from the market crash and touch-and-go recovery. Sellers feel beat up over pricing and the new “requirement” that homes need to be about perfect to sell (or have the price slashed to an extreme, as they see it).

But the numbers are really not so bad, when you view them statistically.  The inventory is a little low, but still within fairly normal ranges, historically.

Right now in Santa Clara County (which is the bulk of the “Silicon Valley” area), there are 3392 houses available (not under contract) and there have been 853 which have closed in the last month.  That’s 3.98 months of inventory, or a seller’s market.  (There are 2668 which are under contract, but many are short sales which may never close escrow.)  Four months of inventory for the county is pretty strong overall.

For condominiums and townhouses in Santa Clara County, there are currently 1406 on the market and 289 which have sold/closed in the last month, giving us 4.87 months of inventory, which is technically a seller’s market but is very close to a balanced market. (There are 1096 pendings.)  The average “days on market” for the solds vary from about 50 days to about 115 days, depending on whether or not it’s a distressed sale.

Whether a home is in a buyer’s or seller’s market depends largely on its location, price point and sales type.  It is easiest to sell a home which is a “regular sale” situation, harder to sell a bank owned home and hardest to sell a short sale listing.  It’s easier to sell entry level priced houses, harder to sell luxury townhouses or condominiums.

For information on your part of the Silicon Valley real estate market, please email or phone me today!

How is the Saratoga real estate market? One barometer is the amount of inventory, that is the number of homes for sale. Today we’ll take a look at that, both in terms of “what’s normal” and what’s been happening in the recent past and now for Saratoga houses on the market.

First, here are the typical patterns over the last five years. As you can see, inventory is normally at its lowest point in winter, and highest point in summer. Usually inventory continues to rise from January through June or July, sometimes August, before falling again.

If we simply look at the last 12 months of Saratoga homes for sale, we’ll really appreciate how different the market was then vs now.

Is this much different from last year? Inventory of Saratoga houses for sale now versus one year ago:

Interesting to see how different the years are for actual inventory (far less available this year) but both are now following the seasonally typical pattern of increasing inventory in the new year.

The absorption rate, or months of inventory, factors together both the new sales with the inventory levels. It’s a very solid way to see how well homes are selling overall.

Six months of inventory is a balanced market. More is a buyer’s market (so January 2009 was a very deep buyer’s market!) and the fewer the months of inventory beyond 6, the more of a seller’s market it is.

What does this mean to you if you’re a Saratoga home buyer or seller?
If you’re a buyer, it means that there’s not so much to choose from (and that your better opportunity for selection was last year, when the market was softer). In the entry level homes for sale in Saratoga, prices are up substantially from a year ago. Saratoga home buyers who have been looking casually for a year or more are now kicking themselves for bein indecisive when these houses were attainable. Many homebuyers are now “priced out of the market” because they had trouble committing when it was a soft, buyer’s market.

If you’re a seller, this is mostly good news for you. If your home is well priced, in good condition and well marketed, you should be able to sell without too much difficulty (especially in the more affordable price ranges). It is not a strong seller’s market, but it’s infinitely better than 15 months ago. If you want or need to sell, don’t wait. Who knows if this favorable climate will last or not.

Of course, there are many nuances within the Saratoga real estate market. Today we’ve only really looked at one factor, inventory, and that in relation to sales, meaning the absorption rate. Other factors to consider include the days on market, the median list price, the median sales price, and much more.

For personalized help with your real estate questions, whether in Saratoga, Los Gatos, Monte Sereno, Campbell or San Jose, please contact me. I’m happy to chat with you about your real estate questions, hopes, wants and needs.

With the massive housing correction, we saw a rise in real estate inventory which has now begun to subside, and we saw a wave of short sales and bank owned properties begin to roll through Santa Clara County.  In the “West Valley” communities of Los Gatos, Saratoga, Campbell and Cambrian Park, we have seen the impact of this to varying degrees.

Today I pulled the numbers for these four areas of Silicon Valley to see this history of inventory and pending sales over the last six years to get a year-over-year view of the market.  (Status 1 = homes available, Status 2 = homes under contract with a seller’s contingency, they might be available, Status 3 = sale pending with normal contingencies on the buyer’s side for inspections, financing, and/or appraisal, and Status 4 = all contingencies have been removed.)

What do these numbers reveal to us?

As you probably realize, the larger the inventory, the more of a buyer’s market it is, meaning it is a more ideal time to buy generally.  Buyers usually do not buy in a buyer’s market, though – which is why the inventory is so large.  Most wait until it’s swung into a seller’s market, when the panic of rising prices and/or rising interest rates gets them “off the fence”.   Our now shrinking inventory tells us that the market has shifted into the sellers’ favor in many areas and price points (not all).  That doesn’t mean that prices are where sellers want them – only that buyers cannot wait to get a good home and will not get the sellers to do all the repairs, as most would have done in 2009 or 2008. Many homes are now selling strictly “as is”.

Another interesting number to track is the “status 2″ figures, which are homes under contract but with a contingency on the seller’s side.  In years gone by, this would normally reflect a “contingent offer”, meaning that the sale was subject to the buyers being able to sell their home.  You can see that usually this is a very tiny fraction of the homes which are sale pending.  In recent years, though, that number has gone through the roof.  Almost all of them now are short sales, and the seller’s contingency is for bank approval & seller’s acceptance of the bank’s terms for the short sale transaction. The seller can back out of the deal with this type of sale. 

Most of the short sales are happening in entry level priced homes, but no part of the San Jose area is now immune.  Of these four parts of the west valley, Cambrian is the most affordable – and it has the most short sales.  Saratoga is the most expensive of them – and it has the least.   Short sales are now closing more than they did in the past, but are still not something you can count on.  Short sales may take 3-6 months to close, or perhaps will not close at all.

Also noteworthy is that the pending sales in the more expensive areas of Los Gatos/Monte Sereno and Saratoga are up from last year.  These parts of the valley have been slower to get busy and it’s encouraging to see the activity finally pick up there. Part of it is no doubt due to an increase in the number of distressed sales, but also some luxury homes are selling too.

Inventory overall is about normal in Saratoga and Cambrian. Campbell and Los Gatos are a still bit high.  If you’re selling a home in Campbell or Los Gatos/Monte Sereno, pay attention to the inventory of homes similar to yours. If your home is simply priced “similarly”, it probably won’t sell. Yours needs to be a “good deal”, which is what buyers are all searching for these days, in order to sell.   Highly motivated? Make sure your property is priced aggressively enough that it’s in the bottom 20% of similar homes and that should get the attention and traffic that will lead to a sale. 

For Saratoga and Cambrian Park home sellers, you can be a little less worried but if you still want or need to sell, make sure your home is priced in the bottom half of similar homes, ideally in the bottom 30-40%. 

Home buyers, remember that while many homes in all of these areas are not selling, the well-priced ones are going fast and often getting multiple offers. 

Can you still get a “good deal”?  A normal 20% down offer will be where the balance is for most home buyers.  Most sellers will give you preference if you have more cash down, but it’s not going to be a 10% discount (probably closer to 3%).  If you are a buyer using FHA financing, please understand that most sellers will not be super excited about your offer because of this so you will probably need to pay more than someone with 20% down to get the same house.  The terms and price work together – if your terms are great, your price will be better (lower).  If your terms are not great, your price will be worse (higher).  It is crucial to factor this in realistically when bidding on homes for sale in Silicon Valley: cash is king – the more you have, the better a deal you will likely get.

This week one of my buyers asked me about the inventory levels in Santa Clara County (San Jose, specificially) and wondered if they’re lower than usual.  I get this question a lot lately so wanted to present the numbers to the readers of this Valley of Hearts Delight Blog. 

How low is the inventory? It’s way off from last year in most parts of the west valley. But remember, last year was unusual.  (Below are the numbers for single family homes, or houses.)

How much is this year’s inventory off from the average of the last 6 years?

Almaden: down appx 10%
Cambrian: down appx 18%
Campbell: down appx 20%
Los Gatos: up appx 6%
Saratoga: up appx 38%

Once again, “easy answers” allude us. 

If we were to push this further, we’d find that certain price points (or bands or strata) in the market are way above or below the typical numbers.  It is very hard to generalize accurately.  Anecdotally, though, it seems as though there’s very little on the market as far as my buyers are concerned (and right now, my buyers are looking at properties in Santa Clara County ranging from the 400s to between 1 and 2 million). 

For information on your particular situation, please contact me.

The Monte Sereno real estate market tends to be a good indicator of the high end market throughout Siicon Valley or Santa Clara County. While it may not be exactly the same in Los Altos, Los Altos Hills, Almaden or Saratoga/Los Gatos, it’s often very similar.

Homes at the high end of the price range have taken a beating in the downturn, as would-be buyers – mostly “move up” home buyers – haven’t got enough equity to purchase the next home.  Many are running into problems getting financing too. So without a large amount of money to put down, it’s very difficult for even willing buyers to make the purchase.

Prices have been dropping in Monte Sereno, as they have been dropping everywhere in the San Jose area.  Although we aren’t seeing the deep discounting here that we see in Alum Rock (where most of the houses bought are distressed properties, either short sales or bank owned homes), the rollback in pricing is still painful for home sellers, especially if they were counting on that money for retirement.

Let’s first look at the recent historical data on list prices in Monte Sereno (graphs courtesy of Altos Research, with which I have a subscription). First here’s a view of the median list price of all houses offered for sale in Monte Sereno in recent years:

Now, the asking prices in Monte Sereno in recent years broken out by quartile (each segment is 25% of the inventory):

The highest priced homes have shown the most volatility, as you can see by the swings in the top line.  That could be a statistical abberation since each quartile represents very, very few homes.

Next, a shorter time frame for a closer-in view.  Monte Sereno list prices by quartile over the last year:

Interestingly, in the above chart it appears that there’s a “levelling off” happening with pricing.  Are we at or near the bottom for those price points? Maybe so.

Now, Monte Sereno list prices with all quartiles combined and overall trend shown for last 180 days (last 6 months):

The dropoff looks like it came from the Giant Dipper roller coaster at Santa Cruz after a nearly 20% drop, but please note that at the tail end, there is an upswing. It appears that the lowest point may have been around May 1st.  Finally, the same quartile breakdown over just the most recent 90 days.

List prices among Monte Sereno houses appear to have stopped declining and are rising slightly in the lowest price ranges.  In the more expensive ranges, which really are more luxury properties than simply homes, the declines continue.

What about days on market and inventory?

A view of all Monte Sereno days on market for listed homes in recent years:

Next, just the last year of DOM among Monte Sereno houses for sale with it broken down by quartile:

The first quartile (black line) represents luxury homes. A year ago, it was difficult to sell the most expensive Monte Sereno properties, but now it is far, far worse – the days on market for luxury homes in Monte Sereno has approximately quadrupled from a year ago for these home sellers! (If you are in the market for an estate property, this is a great time to act as it is a very strong buyer’s market.)

At the other end of the spectrum, the least expensive homes in Monte Sereno also have worsened for days on market, but are selling in about 1/3 the time of the higher priced real estate.

Inventory (in MS and everywhere else in Silicon Valley) is often lowest in December and January, and a quick look at the chart below reveals that the inventory”dips” usually coincide with late December/early January.

Here’s the one-year view: in recent months, the best time to sell was in Feb-April, when there was the least amount of comptetion.

By quartile, same time frame – apparently the timing was about the same for all residential real estate in Monte Sereno – the patterns are almost identical:

It does appear that the dramatic climb in inventory that happened from March to June is levelling off, though.

Days on market are continuing to rise in this small city, but some of the lower price points are no longer dropping and the inventory is no longer rising in Monte Sereno.  The indicators are a little mixed, but in the lowest two quartiles, at least, it looks as though the worst is behind us and perhaps a recovery is underway.    This is what we are seeing in the markets across Silicon Valley, generally – the lowest priced homes are recovering the best and have stopped dropping in price, while the higher priced homes are selling more sluggishly.

It’s stil a great time to buy in all price ranges of Monte Sereno, and it’s still a challenging market to sell – it remains a buyer’s market. Even so, it does appear that things are beginning to shift.

How is the real estate market doing in the Almaden Valley area of San Jose? We can look at a few key indicators (median list price, average days on market, and inventory levels) to get a pulse on the current market in the San Jose, 95120, area. Graphs below are from Altos Research; I am a subscriber so may present these to you here. Data used is list pricing. (To see the most recent reports using closed Almaden sales numbers from November, please view my Almaden Valley Real Estate Report, which is from another provider and is another of my subscriptions to get the best data possible for my clients and readers.)

From the solds last month and in prior months, we know that overall, the Almaden real estate market has been deepening in the buyer’s favor. Prices have been slipping, days on the market are lengthening, and list price to sale price ratios have wavered a bit.

Median List Price for Almaden Valley Homes

The graph above reflects the list prices of real estate in Almaden Valley, which is an upscale district on the southestern side of the city of San Jose. Interestingly, while the list prices of single family homes is declining, the list prices of condos and townhomes has performed almost the opposite in the last twelve months and now appears to be level.

Among houses, is it any different from one price point to another?

 
The main difference in pricing by Almaden quartile appears to be one of degree. The highest priced homes appear to be coming down the most, and more affordable or entry-level houses in Almaden are slipping very slightly by comparison.

For Almaden condominiums and townhomes, prices appear to be far more chaotic, with much more volatility in the highest price Almaden townhomes and condos:

Average Days on Market for Almaden Valley Homes 

First we’ll have an overview of the houses and condos in the San Jose, 95120 zip code (Almaden Valley) and their average days on Market.

The condos and single family homes for sale in Almaden have followed mostly similar patterns over the last twelve months and now are both rising. This indicates that it is more difficult to sell a home. Single family homes remain on the market for an average of about 110 days, close to four months. Most of these are not selling, but are either taken off the market, or put back on with a new price and new MLS number.

Next let’s have a look at each class of property by quartile to see if it’s varied or similar.

Single Family Homes

The four quartiles or ranges of prices in Almaden are all fairly similar in how they’ve been behaving except for the lowest price point among single family homes, which appears to have had a nearly steady incread of days on the market over the last year while higher priced points all had a dip (or a rally) over either the spring or summer).  Now, though, homes in the lowest two quartiles have levelled off, while it continues to worsen in the two upper price ranges. Hardest to sell are the highest priced houses in Almaden.

Condos and Townhomes in Almaden

While the list prices for Almaden townhouses and condos showed different patterns, the average days on the market for condos by quartile is simply a wild ride. Twelve months ago, the DOM for most price quartiles was close to 60 except for entry level condos, which were half as many days. In successive months, though, each price point behaved very independently of the others.

The two top quartiles are now selling faster then a year ago, but the entry level condos of the first two quartiles are now staying on the market far longer (and they are the bulk of the condo market).  Why? The condo market in Silicon Valley as a whole has been taking a beating while consumers choose foreclosure houses rather than condos.  Perhaps those living in upscale condos are not there because they can’t afford a house, but prefer the lifestyle that condo or townhouse living provides. Unfortunately, we don’t have that data to offer a definitive explanation.

Almaden Valley Inventory of Homes for Sale

Inventory is another key indicator on market performance.

The graph for inventory is less worrisome then days on the market. Inventory levels are close to flat among townhouses and condominums in Almaden Valley, while the numbers are clearly declining among houses there.

Again, let’s see if it’s the same in all price ranges or if there’s fluctuation. First, among Almaden houses for sale:

I redid this chart a few times to make sure there was not an error. It is oddly uniform across all price points.

And for townhomes and condos in Almaden:

Even within the otherwise somewhat disparate Almaden condo market, the inventory patterns are similar.

Overall, it remains a buyer’s market in Almaden Valley, and this is true for condos and houses and it is true in all price ranges.  Prices run from flat to falling, inventory is dropping (which may just be a seasonal fluctuation), days on market are lengthening.

Sellers need to make their home as perfect as possible. Buyers have never been pickier and the vast majority of buyers today do not want to buy a home and fix at all. Homes that need updating or remodeling either won’t sell or will sell for far less than you might expect. The greatest demand is for turnkey (read: perfect) homes with no issues (read: no busy roads, no high voltage power lines, nothing objectionable nearby).

Buyers, if you are one of the rare few who will buy and fix, the market is at your feet in many cases. Your main challenge will be in selling your current home, if you are a move-up buyer, or in securing financing if you do not have a large downpayment. The best bargains will come to those willing to buy and fix and to those with large cash downpayments where financing becomes much easier.

All of this market information is general. Your home may be unique due to things like views, construction, proximity to schools or golf courses, or any other number of factors. Please contact me for specific information relating to your home or one that you would like to purchase.