Another Silicon Valley real estate market bubble? (Image of bubbles in a hot tub.)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 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

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:

2a 3 - What Does It Cost to Buy a 4 Bedroom, 2 Bath Home in Silicon Valley with Good Schools?

And a look at the chart from all back in 2015…

Homes sold 60Day 3 5Bed 2 3Bath 4 20 2015 e1493852936467 - What Does It Cost to Buy a 4 Bedroom, 2 Bath Home in Silicon Valley with Good Schools?

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.

Cost to buy a 4 bed 2 bath house in the West Valley areas of Silicon Valley

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

Severe inventory shortage

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:

2017-05-01 Santa Clara County Inventory of Single Family Homes

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.):

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 normalContinue reading

Garage photoRecently I spent about an hour on the local multiple listing service,, looking at expired or canceled listings.  Perhaps it shouldn’t have been surprising, but in many cases, the photography on the homes which failed to sell was simply ghastly.

Whether there’s a professional photographer or the real estate agent is shooting the photos himself or herself, though, you’d hope that they’d move the clutter, make sure that the seller isn’t in the picture, and that the lights are on.  Incredibly, that doesn’t always happen.  Not everyone is equally “visual”. So here are a few tips:

  • clear the driveway of garbage cans, cars, bikes, etc.
  • if the roof is covered with leaves or debris, have it cleared off
  • make sure all hoses are rolled up and there are no items which do not belong in the front yard
  • best if the exterior photos do not emphasize the garage in most cases
  • also best if the front door is visible from the main photo
  • if needed, trim bushes so that they do not obstruct windows prior to the photo shoot
  • make sure that the house is super clean
  • clear counters in kitchen and bathrooms of most everything but a tiny number of items
  • make sure that lights are on, curtains are opened, and photos taken in daytime
  • toilet lids should be closed
  • closet doors should be closed
  • beds ought to be made
  • clutter on dressers, desks, headboards, and any other surfaces should be put away for the photos

Remember, the first “open house” for a home is online, so it is extremely important that the photos make a great impression.  If buyers don’t like what they see online, they won’t bother to come see it in person.

  1. 3 beds, 4 baths
    Home size: 2,553 sq ft
    Lot size: 5,488 sqft
  2. 4 beds, 3 baths
    Home size: 1,987 sq ft
    Lot size: 5,767 sqft
  3. 3 beds, 3 baths
    Home size: 1,803 sq ft
    Lot size: 1,332 sqft
  4. 7 beds, 5 baths
    Home size: 5,394 sq ft
    Lot size: 1.50 ac
  5. 3 beds, 1 bath
    Home size: 960 sq ft
  6. 5 beds, 6 baths
    Home size: 6,900 sq ft
    Lot size: 1.37 ac
  7. 5 beds, 4 baths
    Home size: 3,450 sq ft
    Lot size: 22,986 sqft
  8. 6 beds, 3 baths
    Home size: 3,120 sq ft
    Lot size: 2.34 ac
  9. 2 beds, 1 bath
    Home size: 530 sq ft
  10. 4 beds, 3 baths
    Home size: 1,987 sq ft
    Lot size: 9,060 sqft

See all Real estate in the city of San Jose.
(all data current as of 9/19/2018)

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

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  You can find it at (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 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. 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 Continue reading

5 things yourbuyers agent can doHome 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:

    1. 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.
    2. 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.
    3. 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.)
      Continue reading
    June 20 2014 San Jose Condo Inventory

    June 20 2014 San Jose Condo Inventory

    Home prices, like anything else which is bought and sold, are subject to the pressures of supply and demand.   In recent weeks, we have seen an increase in the number of condominiums and townhomes for sale in San Jose, but a slight lessening in buyer interest.  More supply with less demand equals lower prices.  This will be a bit of a shock to most home sellers, who’d read about the madness of the market in February, March and April.  But spring is nearly always stronger than summer – and we are seeing a fairly typical calming down in the Silicon Valley real estate market as we move into that milder summer market.

    Since I mostly sell in the “west valley” areas of the Santa Clara Valley, I had a look at a few of them just to see what the trends look like. In this chart, please see the inventory of condominiums and townhomes for sale in 95120 (Almaden Valley), 95123 (Blossom Valley), 95124 (Cambrian) and 95125 (Willow Glen). Almaden seldom has many listings of townhouses or condos at all – over the last year, it looks as though it’s usually close to 5 at any given time. A slight uptick means 6 are available. The trend is much more dramatic in other parts of San Jose.

    Home sellers: where the inventory rise is the steepest, you will probably see the most impact on the odds of selling and the price for which you can sell your home.   Home buyers:  if you see that inventory is largely unchanging, as it is in the tony Almaden Valley, the odds are good that it’s still pretty competitive for home buying and you will likely need to bring your best game forward to secure your future home.

    Interested in other areas?  I work all of Santa Clara County and would be happy to help you buy or sell your condo, townhouse or single family home here.

    June 20 2014 condo inventory 95120 95123 95124 95125

    June 20 2014 condo inventory 95120 95123 95124 95125

    1. 2 beds, 1 bath
      Home size: 852 sq ft
      Lot size: 927 sqft
    2. 3 beds, 3 baths
      Home size: 1,377 sq ft
      Lot size: 1,054 sqft
    3. 2 beds, 2 baths
      Home size: 1,144 sq ft
      Lot size: 1,833 sqft
    4. 2 beds, 3 baths
      Home size: 1,264 sq ft
      Lot size: 1,271 sqft
    5. 1 bed, 1 bath
      Home size: 722 sq ft
      Lot size: 723 sqft
    6. 2 beds, 2 baths
      Home size: 1,370 sq ft
      Lot size: 2,103 sqft
    7. 2 beds, 1 bath
      Home size: 822 sq ft
      Lot size: 2,069 sqft
    8. 4 beds, 2 baths
      Home size: 1,320 sq ft
      Lot size: 1,729 sqft
    9. 3 beds, 2 baths
      Home size: 1,130 sq ft
      Lot size: 906 sqft
    10. 2 beds, 3 baths
      Home size: 1,529 sq ft
      Lot size: 1,128 sqft

    See all Real estate in the city of San Jose.
    (all data current as of 9/19/2018)

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

    Old listingsThe real estate market in the San Jose – Santa Clara County and San Mateo County areas has been brutal for folks wanting to purchase property.  With multiple offers and large numbers of cash offers or non-contingent offers being so prevalent, it can seem impossible at times.

    Discouraged home buyers should consider looking at overlooked properties, those which have been on the market for awhile and yet remain unsold. Most often, the difficulty with these Silicon Valley homes is that they are simply overpriced.  Sometimes the problem is that the showings are too severely limited, so most buyers have gone elsewhere.  It’s not unusual to see poor marketing overall, either: bad descriptions, bad photos, bad exposure. And at times there is a more significant issue at play, some sort of problem with the location or home itself.

    When houses, condos or townhomes do not sell within a month, most buyers assume that there’s something wrong with them.  The thinking is that if they were all right, it would have sold – so there must be an issue.  They are right, of course, but usually the issue is fixable!  And most of the time, in my experience, it’s not even related to the property itself, but to the marketing (which includes the price).

    Look specifically for homes that have been on the market for 30 days or more, for properties where the listing price has been decreased or should have been by now.  Research the expired, canceled and withdrawn listings too.


    Related Reading:

    Buying in a seller’s market? Do not expect a perfect house or condo!

    What If Your Silicon Valley House Doesn’t Sell?

    Let’s list high, we can always come down later

    1. 0 beds, 0 bath
      Home size: 2,120 sq ft
      Lot size: 5,662 sqft
    2. 3 beds, 4 baths
      Home size: 2,553 sq ft
      Lot size: 5,488 sqft
    3. 0 beds, 0 bath
      Home size: 2,682 sq ft
      Lot size: 1.94 ac
    4. 3 beds, 1 bath
      Home size: 2,682 sq ft
      Lot size: 1.94 ac
    5. 3 beds, 4 baths
      Home size: 5,074 sq ft
      Lot size: 5.09 ac
    6. 4 beds, 3 baths
      Home size: 2,177 sq ft
      Lot size: 5,941 sqft
    7. 5 beds, 3 baths
      Home size: 2,070 sq ft
      Lot size: 5,449 sqft
    8. 5 beds, 4 baths
      Home size: 4,672 sq ft
      Lot size: 41,817 sqft
    9. 1 bed, 1 bath
      Home size: 616 sq ft
    10. 4 beds, 3 baths
      Home size: 2,695 sq ft
      Lot size: 1.66 ac
    11. 4 beds, 3 baths
      Home size: 1,987 sq ft
      Lot size: 5,767 sqft
    12. 5 beds, 5 baths
      Home size: 3,320 sq ft
      Lot size: 5,279 sqft
    13. 5 beds, 5 baths
      Home size: 4,708 sq ft
      Lot size: 26.13 ac
    14. 3 beds, 3 baths
      Home size: 1,803 sq ft
      Lot size: 1,332 sqft
    15. 3 beds, 3 baths
      Home size: 2,359 sq ft
      Lot size: 3,166 sqft
    16. 2 beds, 2 baths
      Home size: 2,400 sq ft
      Lot size: 11.83 ac
    17. 7 beds, 5 baths
      Home size: 5,394 sq ft
      Lot size: 1.50 ac
    18. 3 beds, 2 baths
      Home size: 1,003 sq ft
      Lot size: 9,992 sqft
    19. 2 beds, 2 baths
      Home size: 1,600 sq ft
    20. 2 beds, 2 baths
      Home size: 1,354 sq ft
      Lot size: 32,713 sqft

    See all Real estate matching your search.
    (all data current as of 9/19/2018)

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

    It’s a January that feels like March, if a dry one.  The weather is clear, mild, and temps are around seventy degrees, the skies are blue and trees are beginning to blossom.  Typically, January is not a strong month for home buying in Silicon Valley.  The normal winter months are wet, “low inventory” ones, making most potential home owners put off shopping until after the Super Bowl, Valentine’s Day or some other point a little later in the calendar year, when there’s more selection and the weather is more conducive.

    But what about you – should you wait?   Let’s consider this question, as I’m being asked it in email and in person several times a week right now.

    Weather, Inventory, Interest Rates and Silicon Valley Real Estate

    First, to note the obvious: there is no weather related reason to wait. (Sellers: pay attention!)

    Second, let’s discuss selection.  Inventory is horribly low. Most people expect it to be higher in Spring.  Seasoned Realtors know that while this often happens, it doesn’t always, so we cannot count on it. (Check the Santa Clara County monthly real estate statistics here.)

    How bad is it?  I’m on the MLS right now (our multiple listing service,  For single family homes (houses and duet homes) in Santa Clara County, there are 713 for sale right this moment which are not sale pending.   This is for the whole county, where there are 1.8 million people residing.  There are a mere 346 in the City of San Jose, home to nearly one million people.  It’s always low in January, but not this bad.  Have a look at the inventory of houses for sale in San Jose in recent years (chart by Altos Research, to which I have a subscription):

    San Jose Inventory Altos Jan 22 2014

    It’s clear that this is scrapping bottom. Often Silicon Valley residents think “it will be better next month”.  Usually it’s better by March.  But sometimes it actually gets worse before it gets better.  Last year provides a good example.  Continue reading

    Have your own agentSome Silicon Valley home buyers do not want to have their own buyers agent, but instead expect that they can find properties in the San Jose area that they want to see and request that the listing agent show it to them in a private appointment.  These same potential buyers may be surprised that the listing agent may refuse to show them the listing outside of a regularly scheduled open house – that is, if the seller is permitting open houses.

    What’s going on?

    In earlier articles we’ve discussed the need for a buyer broker agreement (verbal at the least, but possibly in writing) and why you, as a buyer, ought to have your own representation at the negotiation table.  (If you missed these, see the links under “related reading” below.)   Today I want to dispel the myth that the listing agent is required to open up and show condos or houses for sale to anyone who calls and requests seeing them and explain why that’s the case.

    Showings of homes for sale are determined by the listing agreement or contract between the home seller, the listing agent or Realtor and the broker

    The most important thing for buyers to understand is that the accessibility of the home for viewings depends upon the agreement, verbally or in writing, between the owner of the property and the agent/brokerage hired to market, negotiate, and sell the real estate.   It’s not an “on demand” situation where an interested buyer can insist on seeing the property as desired. Here are some of the expected scenarios and reasons why showings are somewhat restricted most of the time: Continue reading

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    Mary Pope-Handy
    Sereno Group Real Estate
    214 Los Gatos-Saratoga Rd
    Los Gatos, CA 95030
    408 204-7673
    Mary (at)
    License# 01153805

    Selling homes in
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