How’s the Almaden Valley real estate market?   Prices appear to  have been rising, but slipped some this last month. There’s not much inventory in this part of the valley so it remains a seller’s market, incredibly. A  fairly nice 4 bed, 2 bath house in most parts of the San Jose 95120 zip code will still cost about a million dollars (more if it’s in the best areas with best schools and best condition).  A smaller 3-4 bedroom townhouse with good schools will be about half that much unless it’s really young and highly upgraded.

Average Days on Market  & Sale to List Price Ratio for Almaden Valley (San Jose, CA 95120) houses in 2011:

Number of Homes For Sale vs Sold for Almaden Houses on the Market

Date is between Jan 2011 and Dec 2011

Property Sub Class is ‘Single Family Residential’

Area AreaIdName is ’13 Almaden Valley’

Results calculated from approximately 570 listings

Listings by Price Range

Date is between Feb 2011 and Jan 2012

Property Sub Class is ‘Single Family Residential’

Area AreaIdName is ’13 Almaden Valley’

Results calculated from approximately 470 listings

Sales by price range

Date is between Jan 2011 and Dec 2011

Property Sub Class is ‘Single Family Residential’

Area AreaIdName is ’13 Almaden Valley’

Results calculated from approximately 320 listings

For more info please see my Almaden Valley real estate report.

Houses, sales, pendings, prices in San Jose 95120 for November 2011 – note that they are down month over month and year over year BUT if you go back to October, they were way, way up (double digit). It’s helpful to have the “big picture” and not focus on just a small amount of data. Reviewing several months in a row we see some ups, some down – mostly down (in single or double digits) but when up, it was way up (20-40%). No easy answers here.

Trends At a Glance	Nov 2011	Previous Month	Year-over Year
Median Price	$935,000	$1,075,000 (-13.0%)	$950,000 (-1.6%)
Average Price	$1,007,750	$1,144,880 (-12.0%)	$1,123,800 (-10.3%)
No. of Sales	19	27 (-29.6%)	21 (-9.5%)
Pending Properties	31	35 (-11.4%)	45 (-31.1%)
Active	55	68 (-19.1%)	93 (-40.9%)
Sale vs. List Price	98.8%	97.0% (+1.9%)	97.5% (+1.3%)
Days on Market	47	52 (-8.7%)	40 (+18.2%)

Numbers for October – notice the big jump from September in pricing!

Trends At a Glance	Oct 2011	Previous Month	Year-over Year
Median Price	$1,075,000	$822,000 (+30.8%)	$885,000 (+21.5%)
Average Price	$1,144,880	$815,646 (+40.4%)	$910,012 (+25.8%)
No. of Sales	27	24 (+12.5%)	22 (+22.7%)
Pending Properties	35	42 (-16.7%)	41 (-14.6%)
Active	68	67 (+1.5%)	111 (-38.7%)
Sale vs. List Price	97.0%	95.6% (+1.4%)	97.4% (-0.5%)
Days on Market	52	46 (+13.6%)	36 (+42.2%)

The list price to sales price ratio moved up but days on market and number of pendings were off from the month prior – though not year over year. Compared to a year ago, prices are up and all is rosier except the days on market. Buyers may be having trouble adjusting to the rising prices in Almaden.

Trends At a Glance	Sep 2011	Previous Month	Year-over Year
Median Price	$822,000	$835,000 (-1.6%)	$931,000 (-11.7%)
Average Price	$815,646	$868,909 (-6.1%)	$967,599 (-15.7%)
No. of Sales	24	39 (-38.5%)	27 (-11.1%)
Pending Properties	42	37 (+13.5%)	34 (+23.5%)
Active	67	83 (-19.3%)	124 (-46.0%)
Sale vs. List Price	95.6%	97.1% (-1.6%)	98.3% (-2.8%)
Days on Market	46	62 (-26.4%)	37 (+24.1%)

And August:

Trends At a Glance	Aug 2011	Previous Month	Year-over Year
Median Price	$835,000	$926,000 (-9.8%)	$932,500 (-10.5%)
Average Price	$868,909	$1,038,120 (-16.3%)	$997,688 (-12.9%)
No. of Sales	39	20 (+95.0%)	32 (+21.9%)
Pending Properties	37	53 (-30.2%)	46 (-19.6%)
Active	83	93 (-10.8%)	121 (-31.4%)
Sale vs. List Price	97.1%	97.0% (+0.2%)	99.0% (-1.9%)
Days on Market	62	65 (-5.7%)	36 (+70.9%)

CONDOS

Next the Almaden Valley condo market.  It’s improved over last month!  Some quick stats:
Sales fell 0.0% from the month before, and were up 200.0% year-over-year.  Prices improved in Sep 2011 with the median price climbing 11.6% from the previous month, down 23% compared to last year. The average price rose 22.9%, a yearly loss of 15.7%.  Inventory fell 0.0% from last month, and was down 23.8% year-over-year.

Trends At a Glance	Nov 2011	Previous Month	Year-over Year
Median Price	$577,000	$495,000 (+16.6%)	$620,000 (-6.9%)
Average Price	$577,000	$498,333 (+15.8%)	$620,000 (-6.9%)
No. of Sales	2	3 (-33.3%)	2 (0.0%)
Pending Properties	3	3 (0.0%)	3 (0.0%)
Active	11	11 (0.0%)	16 (-31.3%)
Sale vs. List Price	97.5%	98.4% (-1.0%)	95.6% (+1.9%)
Days on Market	118	93 (+25.9%)	34 (+250.8%)

October:

Trends At a Glance	Oct 2011	Previous Month	Year-over Year
Median Price	$495,000	$512,000 (-3.3%)	$683,000 (-27.5%)
Average Price	$498,333	$560,667 (-11.1%)	$715,250 (-30.3%)
No. of Sales	3	3 (0.0%)	4 (-25.0%)
Pending Properties	3	4 (-25.0%)	2 (+50.0%)
Active	11	12 (-8.3%)	15 (-26.7%)
Sale vs. List Price	98.4%	98.0% (+0.4%)	95.4% (+3.2%)
Days on Market	93	67 (+40.0%)	40 (+134.8%)

September:

Trends At a Glance	Sep 2011	Previous Month	Year-over Year
Median Price	$512,000	$458,900 (+11.6%)	$665,000 (-23.0%)
Average Price	$560,667	$456,300 (+22.9%)	$665,000 (-15.7%)
No. of Sales	3	3 (0.0%)	1 (+200.0%)
Pending Properties	4	5 (-20.0%)	7 (-42.9%)
Active	12	11 (+9.1%)	14 (-14.3%)
Sale vs. List Price	98.0%	97.3% (+0.7%)	95.3% (+2.8%)
Days on Market	67	91 (-27.0%)	25 (+166.7%)

And for August:

Trends At a Glance	Aug 2011	Previous Month	Year-over Year
Median Price	$458,900	$565,000 (-18.8%)	$635,000 (-27.7%)
Average Price	$456,300	$555,200 (-17.8%)	$635,000 (-28.1%)
No. of Sales	3	5 (-40.0%)	2 (+50.0%)
Pending Properties	5	5 (0.0%)	3 (+66.7%)
Active	11	13 (-15.4%)	16 (-31.3%)
Sale vs. List Price	97.3%	98.1% (-0.9%)	98.4% (-1.1%)
Days on Market	91	103 (-11.7%)	7 (+1,121.0%)

Next let’s have a multi year look at the Almaden Valley real estate market.  Below please notice the supply & demand graph going back to late 2007. Although it’s been a “wild ride”, you can see a very clear pattern emerge that around December or January of eacy year, inventory falls (the dark gray line) and relative to the months just before or after, these tend to be “better” for sellers. What’s happening?  The available supply of homes tends to diminish over the holidays.  Prices are perhaps softer than at other times of the year.  Buyers who need to buy, do buy.  The odds of selling are actually higher, in many cases, during this time of year than others!

Here are a few quick stats from Altos Research (which will be automatically updated weekly and to which I have a subscription) – these are based on the list price of townhouses, condominiums and houses for sale in San Jose’s Almaden Valley 95120 area:

90-day stats for Single Family properties in SAN JOSE, CA95120 as of October 7, 2011
Median List Price:	$927,953	Average List Price:	$1,056,795
Total Inventory:	129	Price per Square Foot:	$405
Average Home Size:	2,414	Median Lot Size:	8,580
Average # Beds:	4.04	Average # Baths:	2.72
Homes Absorbed:	11	Newly Listed:	8
Days on Market:	113	Average Age:	36

90-day stats for Condo properties in SAN JOSE, CA95120 as of October 7, 2011
Median List Price:	$606,104	Average List Price:	$637,011
Total Inventory:	17	Price per Square Foot:	$365
Average Home Size:	1,674	Median Lot Size:	n/a
Average # Beds:	2.79	Average # Baths:	2.34
Homes Absorbed:	1	Newly Listed:	1
Days on Market:	178	Average Age:	26

The residential real estate market in San Jose’s Almaden Valley area was a “hot seller’s market” early this year due to more demand than supply but it is cooling slightly now, which will be a great relief to frustrated home buyers, but it has not been giving them the big influx of inventory they’d like to see.

Every couple of weeks I update this post to bring fresh news and data on the Cambrian Park real estate market. On Dec 9th  I went onto the MLS and ran the “months of inventory” or absorption rate of houses and duet homes (what our MLS calls “class 1″)  in “area 14″ or Cambrian area of San Jose. This time I broke it down into price points as well as the type of sale (regular, short sale, bank owned)  so you can pinpoint the pricing for the various segments of the Cambrian market. (Reminder: months of inventory reflects how long it will take to sell a property if sales continue at the current rate. Six months or so is considered “balanced”. More is a buyer’s market and less is a seller’s.)

**please note – typo below – numbers were crunched December 9th, 2011, not December 10th.

Cambrian Park (San Jose) Months of Inventory by sale type & price point Dec 9, 2011

What’s selling? “Regular sales” – non distressed. Not faring so well? Short sales.  In many price points, although many are under contract or pending, FEW – sometimes none – are making it to the closing table.  We are hearing a lot about the streamlined processes for short sales, but these numbers hint at a different reality, namely that Silicon Valley and Cambrian short sales sell but often don’t close escrow.

What is the typical kind of home and price for these neighborhoods?  Of the homes which transferred ownership in the last 30 days, a typical house cost about $600,000, has about 1600 square feet and sits on a lot of around 6700 square feet (and is “partially updated”, not fully remodeled).  The price per square foot averaged $376 but ran from $205 (distressed and on a hugely busy road) to $513 (close to the hills near Almaden and Los Gatos).  If the home you want to buy or sell needs remodeling or is “all original” it’s probably going to sell for less. If it’s in a great area, is a regular sale and absolutely turnkey and fully remodeled, it’ll sell for more.  A beautifully remodeled Cambrian house with 3 bed, 2 bath and 1200 square feet can easily run $600,000 or more if it’s a regular sale and in a good area with no “issues” (high voltage lines, backing to busy road or school etc.).

What about the pending sales?

As of this morning, there are 95 houses & duet homes which are sale pending.  Of those, 39 are regular sales (a mere 41%!), 48 are short sales and 8 are bank owned properties (REOs).  How do the pendings compare to the homes sold?  Here’s a quick breakdown for all price ranges in “area 14″ of San Jose:

ALL types Pending – 95   Sold in last 30 days – 37
Regular sales – 39   Sold in last 30 days – 32
Short sales -  48   Sold in last 30 days – 1
Bank owned sales – 8   Sold in last 30 days – 2

This underlines the fact that the short sales are getting into contract…but just not getting to the closing table! Bank owned homes are better, but the ratio of pendings to closings is much, much better with regular sales.  This explains why the regular sales are the hottest ticket in Cambrian Park right now: buyers don’t want to just buy, they want to close!

Some sellers are borderline on being able to sell without either having to bring cash to the closing table or having to attempt a short sale.  What do these numbers suggest?  That if you really want to sell and can do it – you may be best off doing a regular sale, even if you need to bring money to the title company to make it work.   (This is general advice only, your own situation may be different – please consult with your Realtor, lawyer and tax advisor before deciding to do, or not to do, a short sale.)

Here’s a snapshot view what was happening in the 95124 and 95118 areas of San Jose as of December 2nd, 2011. (My last update for this part of San Jose -  a mini update.)

Cambrian Park (San Jose) quick real estate stats for houses Dec 2, 2011

Interestingly, the hottest segment of this market is not the distressed sales, but regular ones, which are being absorbed three times as fast as the short sales or bank owned homes on the market. And it’s understandable: REOs don’t provide any disclosures and may contain surprises after close of escrow, and short sales may never close.  Just look at the huge number of pendings as opposed to the short sales which actually become a finalized transaction!  We hear that the odds are improving on short sales closing, but this graph doesn’t validate that impression at all.

Cambrian San Jose Real Estate Trends & Statistics for Sold Homes

It’s been a “hot sellers market” in the Cambrian district of San Jose for many months now with most homes that sell going fairly close to list price (1-2% off on average).  That doesn’t mean that the best idea is to always offer less than list price, though, as many homes are selling at or above list price.

If we took a close look at what’s selling and closed recently, we would find that some Cambrian houses are selling for more than list price, some right at list price and others below or well under the offered price.  Some Cambrian real estate is listed strategically low in order to get multiple offers and drive the price up.  Some are overpriced and others are priced “right on the money”.

Data on real estate solds in Cambrian area of San Jose, for November, October, September and August 2011 among houses from my Real Estate Report:

Next, October:

September:

Next, August (note that prices were higher, pending prices were higher in August as opposed to September).

Inventory is down about 32% from a year ago.  Prices are down, too, both year over year and month over month. Even so, the Cambrian real estate market is fairly hot, a good strong seller’s market as long as homes are priced well, staged well, and marketed well.  That doesn’t mean that every home is selling, but those which are nicely staged and marketed and correctly priced are selling at a good pace – and many of them get multiple offers, as the overbids attest.

Just now I checked what has closed in the Cambrian area in the last 30 days. There were 36 houses that closed. Of them 9 sold over list price, a few sold right at list price but most sold under list (and a very few sold grossly lower).

Now let’s work with Altos Research’s graphs and get a feel for the Cambrian realty market in “real time”.  These use list prices, whereas my REReport uses sold data.

First, the statistics by quartile for houses in San Jose 95118:

Next, the stats and trends by price quartile for houses in San Jose 95124:

Median list price of homes for sale in 95124 and 95118:

Very interesting that the 95124 pricing appears to be swinging upward while the 95118 pricing continues to go down.  I believe that this is mainly because the schools in 95124 have been trending upward strongly with the API scores.  Prices are also at a higher level, and those are less impacted by short sales and REOs countywide.  So it may be the result of multiple factors.  (95124 is about 2/3 of the Cambrian real estate market.)

Inventory in Cambrian area of San Jose 95124, 95118:

Surprising, isn’t it, to see how differently these two San Jose zip codes are behaving from each other?

Average days on Market in San Jose’s Cambrian area

And again, really different trends on these neighboring zips, both in Cambrian!

Another anecdotal story to share: Recently I closed the sale on my listing at 5114 Nerissa Way in Cambrian with Union Schools and Alta Vista in particular. We were listed at $579,000 and received 4 offers and sold at $585,000. Interestingly, we received 2 nearly identical “best” offers, both at $585,000. One was completely As Is and the other was almost As Is (they wanted a fumigation and pest clearance provided).  That is usually a pretty good affirmation of market value, and the property did appraise at the sales price.  The other two offers we got were below list price.  One was all cash and it was extremely low.  Buyers who are purchasing without financing sometimes misunderstand the type of discount that their all-cash status will get for them, so sometimes the worst offers are all cash and that was the case this time.

Want more info on your neighborhood, your house, or your target home to buy? Please call me!

Showing properties 1 - 5 of 61. See more 95124 zip code real estate.
(all data current as of 2/11/2012)

1. $685,000 : 1671 Zinnia Ln, San Jose
   
   3 beds, 2 full baths

   Home size: 1,410 sq ft

   Lot size: 6,240 sq ft
   
2. $549,900 : 2423 Loment Pl, San Jose
   
   3 beds, 2 full baths

   Home size: 1,539 sq ft

   Lot size: 4,232 sq ft
   
3. $639,000 : 1695 Merrill Dr, San Jose
   
   4 beds, 2 full baths

   Home size: 1,396 sq ft

   Lot size: 7,200 sq ft
   
4. $748,000 : 1830 Curtner Av, San Jose
   
   5 beds, 2 full, 1 part baths

   Home size: 2,191 sq ft

   Lot size: 6,000 sq ft
   
5. $574,980 : 5003 Phileo Ct, San Jose
   
   3 beds, 2 full, 1 part baths

   Home size: 1,644 sq ft

   Lot size: 2,854 sq ft
   

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

Showing properties 1 - 5 of 29. See more 95118 zip code real estate.
(all data current as of 2/11/2012)

1. $829,000 : 5530 Le Franc Dr,
   
   4 beds, 3 full baths

   Home size: 2,020 sq ft

   Lot size: 3,356 sq ft
   
2. $575,000 : 3213 Gardendale Dr, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 1,800 sq ft

   Lot size: 6,313 sq ft
   
3. $489,900 : 1349 Lyonsville Ln, San Jose
   
   4 beds, 2 full baths

   Home size: 1,692 sq ft

   Lot size: 9,583 sq ft
   
4. $499,000 : 3119 Santa Margarita Av, San Jose
   
   3 beds, 1 full bath

   Home size: 1,071 sq ft

   Lot size: 7,840 sq ft
   
5. $430,000 : 1560 Hillsdale Av, San Jose
   
   4 beds, 2 full, 1 part baths

   Home size: 1,654 sq ft

   Lot size: 6,890 sq ft
   

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

Browse lists of Cambrian & Cambrian Park homes for sale:
Houses for sale in the 95118 part of Cambrian
Cambrian Park Houses for Sale in 95124

Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: “Get The Best Deal When Selling Your Home In Silicon Valley”
408 204-7673 (Cell)
emailto: Mary (at) PopeHandy.com
Blog: www.LiveInLosGatos.com & www.ValleyOfHeartsDelight.com

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

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

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

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

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

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

Buyers are voting with their wallets. Uncertainty causes buyers to be unwilling to pay top dollar. In some cases, the bottom of the heap is short sales – because the condition is less known (there are no pre-sale inspections) and even more, because the time in which the bank eventually responds, if ever, is likewise unknown. In other cases, REOs sell for the lowest amount because the condition of the home may be especially poor. Some REOs are “stripped”, with whole kitchens missing, trim missing etc. I recently visited a Willow Glen REO that even had a missing shower head in addition to the water heater, kitchen appliances, and windowsill.

Regular sales DO sell for more. How much more? Here are the numbers, which may surprise you. I looked at both 95119 (which is most of “Santa Teresa”) but also our MLS “area 2″, looked at pendings (which reflect list prices), solds in the last month and solds in the last 3 months.

Most regular sales are not only unpressured, but there are pre-sale inspections and often work done to put the home into good shape for the sale. So buyers know that they are getting a solid house with a regular sale.  They know that they will get disclosures completed by the sellers.

The numbers above display a wide range of prices per square foot, but in all cases, the distressed properties are selling for less than regular homes.  In some cases the difference in the average price per SF of the solds is double digits.  Among the pending sales, the list price is 10 – 18% less than amoung short sales or bank owned homes.

The widest gap for the average sales price is about 20%, but if we looked at individual sales we’d find some lower and some higher than that. The worst ones will be abused houses, and the best ones will appear almost like a normal sale, but perhaps a bit dirty.  One of the problems with the “auto comp” sites is that they don’t factor in these conditions, which have such a giant impact on a property’s value.

What is a home really worth? Usually it’s what an informed buyer will pay for it.  In Santa Teresa, as in other parts of San Jose, informed buyers are scooping up bank owned homes and short sales, but only if they’re getting a sizeable discount.  Aggressively priced, well staged and marketing “regular sales” are getting top dollar here and throughout Silicon Valley.

“How long will it take to sell my home?” This is a perenial question among home sellers in Silicon Valley. Real estate professionals can look at the statistics and, when experienced and active in your local market, tell you what they believe will happen based on the absorption rate and days on market numbers.

We know that the national average is that for approximately every ten showings, a home should get an offer. It may or may not be an offer that results in a sale. Today’s market in the San Jose area is more sluggish than usual, but homes are still selling in many areas within a month if all is right when it’s offered for sale. One thing is for certain, though, and that’s that sellers have to see offers to be able to sell a home, and there are no offers if there’s no qualified traffic.

What kind of traffic is good enough? Three showings a week is decent after the initial flurry of a new listing. There will be more visitors to your property in the first week or two, both in regular showings and in open house visitors who are serious about buying. If you are not getting three showings a week (and it’s not a major holiday, a heat wave, or something along those lines), you have a problem. There are three most likely culprits to the problem: price, conditon, and marketing.

The feedback from showings and open house visitors is of key importance and will help you and your agent to understand the public’s reaction to your price and condition. Agents can ask (without being pushy) questions about how the buyers think or feel about the home. Or ask their agents. (I use a system called HomeFeedback.com that requests feedback by email with a very short 5 question survey. Normally I get about a 65% response rate from agents.) When most of the consumers or agents tell us “the home is dated” or “it needs too much work”, we know it’s an issue. Or perhaps the home is turnkey, but is priced 10% too high. Sometimes the condition issue is fixable but sometimes the only way to address it is in lower, more attractive pricing (when huge renovations appear to be necessary or there’s a time or money issue for the seller).

A very clear indicator of a problem, besides lack of showings, is when there are drive bys with no stopping – not even to get a flyer out of the box. A lot of those indicate an issue with either condition or price or both. A good place to begin addressing this is curb appeal, in that case. If the home isn’t sharp looking from the street, those buyers may never go in at all!

To uncover marketing issues, use your computer, not the newspaper (print ads have a very very low rate of actually helping to sell a property). Start with the multiple listing, because it is the MOST IMPORTANT. What does the MLS printout look like? What do the comments say? Is the buyer’s agent offered a competitive commission? (I once saw $1 – one dollar – offered.) Are there plenty of photos? How about a virtual tour or video?

Beyond the MLS, where is your home being advertised online? What happens if you Google your home’s address? Right now I have a listing in Los Gatos which is a pending sale. When I go to Google and type into the search bar “120 Magneson Terrace”, I see that there are 120 results. One of the best things about this listing of mine is that it’s a short distance to schools and shops. Again at Google, if I type in “Los Gatos close to schools” (but no quotation marks), 3 of the results on page 1 of Google are for this listing of mine (I have several sites).

If your home is being aggressively marketed and the condition is great, there’s only one thing left to blame for a home not selling, and that’s price. Every location and market is a little different from each other. Silicon Valley is composed of many micro-markets. Even within San Jose’s beautiful Almaden Valley, there are smaller markets. The Oak Canyon neighborhood may be performing very differently from the Graystone community, and they are likely to be extremely different than the rural and sometimes remote communities closer to Mt Umunhum. So when analyzing price, be sure to look at recent, local data of homes most similar to yours. Looking at sales from more than 3 months ago will not be helpful now – the market in Santa Clara County has changed since then.

What if prices are dropping? In places where values are falling, which is most of Silicon Valley, it is important to get ahead of the curve if you’re trying to sell your home now. Let’s say you have a home worth $700,000 and in your exact part of San Jose, prices are falling at the rate of 2% per month, more or less. In areas where this is happening, there are many more sellers than buyers. Perhaps only 8% of all homes are going to sell at all (this is just a fictitious example). How do you get your home into that 8%? First of all, you have to be priced in the bottom tier of available inventory. You have to be priced lower than most of your competition. If only 8% are selling, it would be wise to price your home in the bottom 5, 10, or 20% (depending on your home’s condition and other factors that cannot be generalized here). To price your home in the top half of the market is very likely not a good idea.

So back to our example of the $700,000 San Jose house. If it stays on the market for 6 months, at the end of that time, assuming that prices continue falling at 2% per month, where would the value be? It would be about $620,000. Obviously that would be a very expensive mistake to make, allowing the home to take 6 months to sell. But if you get ahead of the curve and market your home for 30 or more days from now’s price – put it at 2-4% less than today’s perceived value – you are more likely to sell now and not be part of the 92% of all homes that aren’t selling but simply continue to decline in value. It’s a matter of “cutting your losses” as it were.

In summary, if your home will go on the market soon and you are concerned that it won’t sell OR if your home is on the market and is not selling, there are a few key things to consider. Here are some questions to use in studying your situation.

(1) First, how is your home’s local market? – that is, what is happening in your neighborhood, your price point, your type of home? The luxury homes in Monte Sereno, Los Gatos, Almaden or Saratoga will not really be the same “market” as a condo in those areas, so it’s more than just geography. A modest but remodeled ranch style home that’s a few blocks from schools may be an entirely different “market” than the very unique home in the same pricepoint. If you have a view home high on a hill with acreage, don’t use recent sales activity in the flatlands as any kind of comparison, even if the home’s square footage and price point are similar.

Are there really no “comps” for your type of home? Hire an appraiser, especially if you have a luxury home or something which makes your home very unique, whether in terms of architecture, location, history, or amenities.

(2) What kind of traffic are you getting or seeing in similar homes? Where is it coming from? It is important to understand what buyers are considering your home so that you can learn if there’s a need to work that segment more or if perhaps there are groups that are just not aware of your home, but should be. How can your home appeal to a wider pool of potential buyers?

Some sellers of townhomes or condos are paying for a year’s worth of HOA dues to make it financially easier for the buyers to get their foot in the door. Some sellers are doing “carrybacks” with the financing – perhaps letting the buyers pay back 5% or 10% over a period of years to the seller rather than getting all of their financing through a lender.

(3) What is the feedback from the agents and the consumers about your property’s condition and pricing? In a sellers’ market, you can “tell” the agents and the buyers what price you want. But in today’s market, sellers need to listen. The home is only worth what the buyer will pay for it. If the agents think your home needs work or is overpriced, you’re going to need to “sell” your home to them first. Saavy buyers do not buy homes when the agents suggest otherwise.

If your home is vacant and stark, professional staging with furniture can help. Even adding colorful or attractive curtains to bare windows can be a huge help. Sometimes small tweaks can make a huge difference. Is your home priced at $1,025,000 and not moving? Perhaps getting it just under the price point, setting it at $998,000, will do the trick. Getting drive bys? Maybe your home needs fresh landscaping and a new driveway, or perhaps a new roof. A home that’s gorgeous inside will never be seen if the outside puts the buyers off. Ask for the feedback, and act on it.

The last alternative, of course, is to just wait out the market, if you are a seller and you don’t really need to sell now. The market is always changing and eventually it will be a sellers market again. No matter when you sell your home, though, real estate homebuyers will always look critically at your property’s condition and pricing, and the traffic to your home will still be impacted by marketing, so these three crucial areas will be important to you no matter when you sell or how the real estate market is performing. And this is true whether you are in Silicon Valley or anywhere in California or the U.S.

Broderick Perkins of Deadline News lays out what is going on with our split Silicon Valley Market in his article Silicon Valley Haves-Have-Nots Rift Widens.

The article matches my experience that the wealthier areas of the valley (mostly in the west side communities of Los Gatos, Saratoga, Cupertino, Sunnyvale etc.) have low inventory and multiple offers and prices are rising, wheras lower priced housing on the eastside is much more of a buyer’s market.