Cinnabar winery sign (Big Basin Way, Saratoga)

In many communities such as Saratoga, Los Gatos, Los Altos, Willow Glen, Campbell and Palo Alto, there is a high premium placed on homes which are close to the downtown area.  Many real estate agents advertise these as “walk to town” but the idea is simple: it’s nearby, you can stroll, skate, ride or bike, wheel yourself and forget the car.

Downtown Saratoga, also called Saratoga Village, welcomes residents and visitors to a charming, scenic area with fabulous shops, spas, wine tasting venues, restaurants and more.  This part of the city boasts top scoring schools as well as lovely older and historic buildings and a gorgeous park alongside Saratoga Creek. Whether you spend an afternoon or a lifetime in Saratoga, this part of town will call you back again and again!

What do you need to know about buying a house, townhouse or condo in downtown Saratoga?

There are a few points which you are well served to know when purchasing residential real estate in this upscale community. We’ll touch on a few of them here: historic homes, traffic & noise, natural hazards, parking, and special issues with condos, townhouses and PUDs (planned unit developments).

First, this downtown Saratoga Village zone is historic; while not every property is deemed historic, many are and that means that there will be restrictions on remodeling and expansion of single family homes or houses. For instance, original glass in windows may need to remain if you’ve got a Victorian house dating from the 1890s, and expansions may need to be off the back of the home so that the facade keeps its initial look and feel (just examples).  This can be frustrating if you buy a luxury home that “needs work” and you are surprised later. If the house was built before 1950 or so, double check the rules! (more…)

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.  (more…)

What should you look for when buying a luxury home in Silicon Valley? Whether it’s a move-up purchase or a first home, there are a few tips which will be helpful for you to know going into it that will make the whole home buying experience smoother and easier.  We’ll hit on 3 areas: first geography & construction, second hyper local factors that impact market value, and finally qualities or features of the property or house itself.

It’s hard to assign an exact price tag on what constitutes an estate or luxury property, but in and near Silicon Valley, in most regions it’s the $2,000,000 and up price point (it will be less in Morgan Hill, Coyote and Gilroy – and likely more in Hillsborough).

1. Geography and Bay Area Construction: it’s different here!

The first and most important thing to understand is that real estate and housing construction vary from one region of the country (or the world) to the next.  This is true for all types of homes, actually, but perhaps more obvious in the priciest homes. Luxury real estate in Silicon Valley is a little different from similarly expensive homes in other parts of the country due to our climate, soil conditions, and natural hazards, such as earthquakes. What seems mandatory for a high end home (and might be ideal to have elsewhere) could be a problem here, so it’s helpful to literally understand the lay of the land before you get too far along the home buying path. A couple of quick examples:

• A fabulous home in Boston or anywhere in New England may be built of brick.
• Here, a brick house is seldom seen because of earthquakes – we need our houses to move and bricks are not usually too good at that!

I mention these two upfront because well intentioned friends and relatives may want to stress the importance of this or that in a property – and it may simply not apply here. (Please see article: Qualify The Advice You’ll Accept When Buying or Selling a Home in Silicon Valley)  If you are non-native to the San Francisco Bay Area, you may have assumptions about construction or architecture that may not work here. Please just be aware of that possibility.

2. Understand the importance of hyper local factors on the market value of a property

Schools can be a main driver for home values in the luxury market as all other segments.  Home buyers may not know that the town or city boundaries are usually irrelevant to school district boundaries. Here are a few examples:

• In Saratoga  there are 3 high school districts and 4 elementary school districts.  Before buying anywhere in Saratoga, then, you’ll want to know which district is which and where you’re buying.  If you want to utilize private schools, you may be delighted to find that you can buy more house for your money in one area of this lovely city than another.  Or you may want one school area over another for any number of reasons.
• In Los Gatos there are 2 high school districts and 3 elementary school districts.
• In the Almaden Valley area of San Jose, there are 3 high school districts and 3 elementary school districts

Often the lesser public school districts will have a lower lid on pricing than the very top districts or schools, so it’s important, when analyzing the pricing of an estate home, to factor in the weight of the school. (more…)

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.  Here are the quick statistics for the closed sales in August  2011 – please see my Monte Sereno Real Estate Report for more details (September’s numbers will be out in early October):

Now the trends are a little easier to spot – it is more clear that overall, Monte Sereno home prices are slipping compared to a year ago.  It is a very “cold” buyer’s market right now, especially in the more high end markets such as Monte Sereno which are not too close to the hotbed of IPO activity on The Peninsula.  (A lower average or median sales price does not always indicate that any particular property is losing value, but it does show what is selling.)  Now let’s see the graph of the “market barometer”. (more…)

How’s the market for condos and townhouses in Los Gatos and Saratoga?  This morning I ran the numbers for “area 16″ (the Los Gatos and Monte Sereno areas, which includes a tiny bit of San Jose also) and “area 17″ (the Saratoga area, also includes borderline areas of San Jose and Cupertino) in our multiple listing service.

Hottest are the distressed condominium or townhome sales – short sales and bank owned or REO properties in Los Gatos and Saratoga.  Coldest (hardest to sell) are the “regular sales”.  Buyers are going after the bargain pricing that the pre-foreclosure and foreclosure listings offer.  Have a look:

The months of inventory are longest in Saratoga, with 9 months of inventory for town houses and condos.  The ratio of pending sales to active listings is lowest there, too, a mere 11%.

The months of inventory for Los Gatos short sales is a fast paced one month and the pendings outnumber the actives four to one!

Home buyers: if you are attempting to purchase a distressed condo in either of these high-end west valley areas, be prepared to act fast and present a strong offer.  Your odds will be better with a regular sale!

Home sellers: if you are selling a non-distressed condominium or townhouse in Saratoga or Los Gatos, especially if it’s a luxury property, be prepared to make your home the best value to attract a good buyer.  As has been said elsewhere, for this segment of the real estate market “it’s a price war and a beauty contest”.  Everything has to be just right for you to enjoy a successful sale now.

Update:  SALE PENDING!

You’re invited to see this stunning young urban living condominium in Campbell close to everything featuring two bedrooms plus loft, 2 bathrooms and approximately 1610 square feet. All of this can be found in an elegant resort-like setting! New listing, open this weekend from 2-4 (Aug 13-14) so please stop by!

Urban Living in Campbell

This sleek condo, the Sapphire Penthouse floorplan (see below), is located just steps from the light rail and Los Gatos Creek Trail, shopping at Whole Foods and many other shops across Bascom, the Pruneyard a block or so away and downtown Campbell just around the corner!  A myriad of restaurants lie within a tenth of a mile.  One of my sellers told me that she had only put 1500 miles on her car in the year living there.  Imagine simply not needing your auto much at all!!  (The building does include two spots in the underground garage for your vehicle, should you still want one while living there!)

Resort Living, Contemporary Setting

Built by Pinn Brothers with great attention to detail, the Onyx offers tremendous features both in the condo itself and in the many fabulous shared areas.

Interior features include:

• open floor plan with high ceilings and dark floors
• elegant kitchen with mostly Bosch appliances (fridge is Fisher & Paykel), tremendous counter space with slab quartz countertops, recessed lights and contemporary dark cabinetry
• an abundance of natural light, loads of windows and recessed lighting
• spacious bedrooms (the master is really large!) and bathrooms
• Master bath features two sinks, large soaking tub and separate stall shower
• comfortable balcony

Community features include: (more…)

If you have just bought your first Silicon Valley home, you may feel very relieved to have survived the contracts, negotiations, the disclosures, the appraisal and the escrow and made it all the way to closing.  You are a successful home buyer!  You move in, unpack and then…. what? What do you do?

I have a few suggestions.

First, while it’s fresh in your memory, pull out the disclosures and inspection reports and (if you haven’t done this already) make a list of the items you must do and want to do.  I suggest you include at least 3 categories:

1. Health & safety items
2. Protecting the house from damage
3. Lower level items with aesthetic value (decorating and in some cases remodeling)
4. Ongoing projects you want to remember to do periodically around the house and yard such as changing the smoke detector batteries, cleaning out the rain gutters, doing a “walk around the house” to check for any issues with vent screens, roof tiles etc. (If you have bought a condo or townhouse, this is still important.)

It is too easy to focus on updating to dual pane windows (gratifying since they look nice) and ignoring foundation cracks, electrical problems and termites, so making this type of list will help you to keep on track with the better priorities (1 and 2 as opposed to 3).

Second, pull together all of the expenses you laid out in purchasing your home. Create a file with a spreadsheet of your costs and the receipts that go with it (include a copy of your HUD 1).   This will be helpful in establishing your tax basis and may protect you when you eventually sell the house from paying more taxes than you’re legally required to do.  Go over it with your CPA or Enrolled Agent or Tax Professional as some of them may be deductible on your taxes this year and some may not qualify as related to your tax basis. (more…)