Today we’ll look at the ratio & relationship between real estate listings and sales of houses and duet homes in Silicon Valley over the last eighteen months. The goal is to get a sense of the market trends in terms of the overall absorption of homes for sale.  (We’ll give a glance at condo and townhome sales but the focus is on single family homes.) How hard is it to sell a home?  The answer has to do with supply and demand – the number of listings and the number of sales.

In the graphs below, the reddish brown line represents the number of pending sales.  The blue line indicates the number of listings or homes for sale. Put simply, the closer these two lines are together, the hotter the market – that is, the more of a seller’s market it is.  When they are far apart, it’s more cold, more of a buyer’s market.  If the lines cross, it is a wild frenzy (that does happen in one case, as you will see). Below please find the graph for the homes in Santa Clara County overall (all areas).

Santa Clara County listings to sales Jan 2009 to June 2010

 You can see that these two lines pinch together in about December 2009 to January 2010.  Prices had dropped and investors were swooping in! The  market has cooled since then.

Santa Clara County condo & townhome listings to pending sales Jan 2009 to June 2010

 For condos and townhouses, all of Santa Clara County:Here the two lines  – or the market – were close together for about 3-4 months.  Buyers understood that condominiums in Silicon Valley were bargain priced, and they responded by buying.Now let’s look at various areas around the county.  We’ll take these in Alphabetical order, beginning with Almaden Valley.

Almaden Valley listings to pending sales Jan 2009 to June 2010

 As you can see, the market improved but never got as “hot” as in the county generally.  This is because it’s a more expensive area, and most of what was selling in winter consisted of entry level housing.
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Luxury home sales remain sluggish in the west valley areas of Santa Clara County. Right now in Almaden Valley, Los Gatos, Monte Sereno and Saratoga, there are over 125 homes for sale listed at more than two million dollars, but in the last month only 6 have sold and closed escrow in those same areas and price ranges.

Today we’ll look at these four Silicon Valley communities and their luxury homes market to see what’s selling and where.

Almaden Valley (San Jose, 95120)

Currently in Almaden there are 11 homes for sale which are listed at or over $2,000,000.  In the last month, zero (0) sold.  That makes for an infinite number of “months of inventory”. It is an extraordinarily deep buyer’s market: great for buyers, a nightmare for sellers of high end homes there.

Will it improve? Probably not soon as there are no houses pending sale in that price range either. There are 55 pending sales in Almaden, but none listed at more than 1.6 mil and the average list price of these pending sales is under 1 mil.
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The Garden Conservancy hosts annual garden tours throughout the US, including here in Silicon Valley.  Tomorrow there will be a (self-guided) tour in Saratoga, Los Gatos and Monte Sereno featuring the beautiful landscaping of four homes plus an Italianate Garden at Villa Montalvo, also in Saratoga.

Tickets cost  $5 per garden per person (kids under 12 are free).  Or, become a member of the Garden Conservancy and enjoy discounted ticket prices. They also offer a directory, which can be purchased, of all the tours nationwide.  Great idea fodder!

How many of the Silicon Valley homes for sale are listed as short sales? How many are bank owned properties? This morning I did some time pulling the numbers out for my readers so that you can see the actual real estate figures.

What’s being counted below are homes for sale, including houses, duet homes, condominiums and townhouses (or townhomes) in the various areas of Santa Clara County listed below.

As was the case a year or two ago, most of the short sale activity is taking place in the most affordable price ranges. The higher priced areas are not immune, though – but because there are fewer distressed properties to choose from, they get purchased rather quickly, so we’d see a higher percentage of them among the pending sales rather than the available listings.

Today I did a post on this subject focusing specifically on the Los Gatos real estate market in terms of short sales today vs the last couple of years (and the question of whether or not the trend is to rising numbers of short sales available). To learn more, visit the article on my Live in Los Gatos blog.

For bargain hunting buyers of high end properties, then, it’s slim pickings!  In the entry level areas, there’s much more selection but also lots of competition.  Last week I was involved with some buyers in a bidding frenzy in a terribly underpriced Cambrian short sale: it got 43 offers!  (So please remember that the list price may be completely unrelated to the sales price.)

If you’re looking to buy or sell a home in Silicon Valley, it helps to have the assistance of a Realtor with a pulse on the market.  Please contact me for a confidential & no-obligation meeting today!

Are real estate prices rising in Silicon Valley? In many places and certainly in the lowest price ranges, housing prices are going up. I see this especially in entry level homes for sale but also in the most affordable homes in expensive areas too.

In Monte Sereno, Los Gatos, and in the Los Gatos mountain communities it’s often a little different than the rest of the valley, so rather than generalize, let’s see for ourselves. Today I’ll use the charts from Altos Research (by permission – I have a subscription) to illustrate the pricing situation in these areas over the last 90 days among single family homes (houses rather than condos or townhouses). This post will include a series of graphs. The first chart does a great job of indicating affordability - that is, which areas/zips are more easy or difficult to afford.

Here are two snapshots of the median list price of Monte Sereno 95030, Los Gatos 95030, Los Gatos 95032, and Los Gatos mountains 95033. First, one with the 3 LG zip codes combined:

Then with them separated out by zip:

The most expensive homes in Monte Sereno appear to be the softest part of the market.

A quick word about how “mild” the changes may seem, whether up or down – this is purely a function of the graph having a very broad price range. If we separate it out to just Monte Sereno or Los Gatos alone, it looks more startling:

If we do JUST Los Gatos 95030:
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Silicon Valley features a number of upscale communities that enjoy beautiful estate properties. These luxury homes are not simply large houses, but rather they boast qualities generally not seen in regular residential real estate.

What makes a house a “luxury home”?

A luxury property in Santa Clara County often includes a number of elements that set it apart, such as:

• price tag: these homes usually sell for more than three or five million dollars (and may be $10 or $20 million or more)
• more than an acre or two of land
• house larger than 4000 or 5000 sf
• the inclusion of “out buildings” such as a guest cottage, gatehouse, etc.
• views (valley, hill, acreage) or special features of the land (waterfront, riverfront adjacent), a vineyard, or something else special and uniquely beautiful
• amenities such as a pool, tennis court, racquetball court, gym, sports court or facilities for enjoying other sports & exercise on site
• specialized hobby or relaxation rooms, as in a darkroom, library, workshop, conservatory
• entertainment centers not commonly found in private homes, like a ballroom, dedicated home theater room for movie viewing, pool or billiards and “game room”, and ice cream parlor
• safety tools such as a video survelliance system, electronic gates

The (main) house itself is qualitatively different too.

Kitchens tend to be the most important room for San Jose area home buyers of all price ranges, and this includes homes that cost upwards of ten million dollars. Usually, kitchens in these homes are designed with a very clear purpose in mind and are done beautifully, though recently in Los Gatos I saw a home listed for about ten million with a kitchen that needs to be completely remodeled. This is very unusual, though.

Most luxury homes features kitchens of one extreme or the other. On the one hand, it may be more industrial in nature if those cooking in it are primarily professional chefs, domestic employees or catering services rather than the homeowner. This is not the kitchen of glossy magazines, it’s not meant to impress anyone for all the maple cabinets, stainless steel appliances and granite countertops. This sort of kitchen is functional, not gorgeous, and it may have stainless steel countertops, for instance, alongside the giant gas range. Such a kitchen is usually separate from the living areas and the guests are not expected to visit this part of the home.

Far more commonly found in Silicon Valley is the other end of the spectrum, the kitchen where residents spend most of their time, and it’s meant to impress. Here we see high end materials and appliances in a room viewed as much as art as the meals created in it are. This type of kitchen is often the focal point of today’s upscale or luxury home. The home’s floorplan is “open” to the kitchen – often the kitchen and family room blend together as part of a Great Room. This is a kitchen designed for owners who cook, not those who have servants.
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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.
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