real estate market
The Santa Clara County real estate market is cooling off, which is very often the case in summers here. It varies from place to place within the region, and one pricing tier to the next, but I am definitely seeing and hearing about fewer offers, more lowball offers, contingencies creeping back into sales, etc. In red hot properties with great schools, you might get a half dozen offers…and three of them may be “bad” offers from home buyers who are pessimistic on the market. They do not get the sale, of course, but it is interesting to hear about an increase in those kinds of bids.
My RE REport just came out, and here are some images and data from that for Santa Clara County. First, the market barometer. Here, you can see that sellers had stronger power in March than they do now – by quite a lot! (Click on the image to go to the report and see a clearer version of it.)
Next, the average and median sale prices and the number of units (again, click on the image to go to the report). This graphic does not look as bad or as much of a change as the one before, though you can see that since May prices have gone down a little, and sales are now tipping downward and are fewer than sales for this time last year.
Next, the sale price to list price ratio is a bit more startling. Sales are still averaging about 1-05% of list price – so that is hard for sellers to complain about – however, it is unmistakable that the climate for home selling in Silicon Valley is undergoing a change and this is literally past its peak. Buyers and sellers alike need to wonder whether it will calm down or continue at the current rate of decline. Is it a buying opportunity, or the beginning of a correction?
The numbers themselves point to a turnaround in the market. I’ll jot the median sale price for the county here – it’s a large enough pool of sales to be pretty reliable as a gauge of the real estate market in the San Jose area:
July 2018 $1,350,000
June 2018 $1,402,000
May 2018 $1,416,000
April 2018 $1,420,000
March 2018 $1,450,000 – PEAK
February 2018 $1,380,000
January 2018 $1,163,000
Between March and July, the median sale price dropped $100,000, or 6.89%. As you can see, it had also jumped considerably between January and March, and even at today’s lower median sales price, it’s still higher than January. It will be interesting to see where it ends up in January of 2019.
A quick look at the numbers for this month’s Santa Clara County RE Report:
Trends at a Glance
|Trends At a Glance||Jul 2018||Previous Month||Year-over-Year|
|Median Price||$1,350,000 (-3.7%)||$1,402,000||$1,175,000 (+14.9%)|
|Average Price||$1,624,690 (-5.1%)||$1,712,500||$1,409,380 (+15.3%)|
|No. of Sales||847 (-13.3%)||977||1,015 (-16.6%)|
|Pending||924 (-0.6%)||930||931 (-0.8%)|
|Active||1,151 (+8.0%)||1,066||816 (+41.1%)|
|Sale vs. List Price||105.6% (-2.0%)||107.8%||105.5% (+0.1%)|
|Days on Market||19 (+13.7%)||17||20 (-6.7%)|
|Days of Inventory||41 (+28.8%)||32||24 (+69.0%)|
It’s now August 10th and it’s too early to know for sure what the August numbers are doing, but normally August is a quiet month with sale prices a little off. So we’ll see. Continue reading
How’s the Cupertino real estate market?
Much of the Santa Clara County is seeing lower prices than it did back in March or April. There was a slight dip in prices in May, but it bounced right back in June. The median sale price in June for single family homes was the highest year to date in 2018. The average sale price in June was just a tad off of the highest average sale price month of the year, which oddly enough had been in January. (That said, there were only 9 closings in January – not a big pool for statistical purposes. You can see the current sold stats near the bottom of this article under the RE Report subtitle.
About this info:
The real estate market in Silicon Valley can sometimes be a little quirky, so I like to approach this question from a few angles. In this article I’ll make use of my charts from Altos Research, which uses listing data (not solds) and is automatically updated every week and also monthly reports from my RE Report subscription, which uses sold data as well as active listings data. Also I’ll periodically update it with info from the MLS that I have crunched myself or anecdotal stories from those of us “in the trenches.” The article is a bit long but I think much more comprehensive giving the multiple methods of answering the question of how the Cupertino real estate market is faring.
Cupertino median list price of houses by price quartile
Often the real estate market in any given city is very different between the most expensive homes and the most affordable ones. While many Cupertino home buyers are looking for a short commute, great public schools or strong resale value, some seek a luxury property with a view in the Cupertino hills (either off of Montevina Road by Ridge Vineyards or in other lower foothills). The more moderate pricing tiers are faring better in Cupertino and in most of the valley than those in that luxury tier (think over $3 or $4 million for luxury tier in this city).
The last few months have had some ups and downs in pricing, but most segments of the Cupertino real estate market have seen an overall uptick since last year, even after a bit of recent price cooling. The luxury market in Cupertino had a steep rise at the start of the year, but it appears to have peaked. What if we look back more than a year? Combining the quartiles, it seems that there’s been more up than down, though buyers will be happy to see the current trend is pointing down.
The real estate market in the San Jose area is softening just slightly. Today we’ll consider townhomes in one particular zip code, in west San Jose 95117, to see how this shakes out.
Because real estate market dynamics are largely about supply and demand, a good place to begin is by seeing the supply. Here, in the image below, see the inventory of available townhouses or townhomes for sale in 95117. Some statisticians including sale pending status, but I don’t think that is wise since nearly all of the pending sales do go to closing. Here, I’ve only included properties for sale without any kind of agreed upon contract between buyer and seller.
As of earlier today, there were exactly 3 properties identified as townhouses listed as available in the MLS. What makes this a little tricky is that “townhouse” is an architectural style, and “condominium” is a type of ownership. That could be the topic of a lengthy article all by itself, but some townhomes are held in condo ownership and some are not. Hence, some will be classified by the listing agents as condos and some not. (And, to murk things up even more, there are attached and detached single families homes that are also held in condo ownership – making them both houses or attached houses and condos!)
Be that as it may, as of this morning, there were three townhouses for sale in San Jose 95117. The average of the first 6 months of the year is 2.17, so yes, it’s a bit more, but nothing that I’d lose sleep over. Have a look:
Naturally, we need to see a few real estate market indicators to have a sense of what’s going on. Another good measuring stick is the average days on market, or days to sell. Here, it may be a bit more clear that the market has softened just a bit for townhomes in 95117, as the days to sell has moved to 12 from 8, which is a 50% increase. It’s also clear when viewing the same month, June, in recent years, that this is a tad higher. Alarming? Not at all. Getting a home sold in under 2 weeks would be break-neck speed anywhere else in the country. But – it could be the beginning of a trend. We’ll have to watch it to know for sure.
And, finally, the sale price to list price ratio. Here, again, it’s very plain to see that the sale price to list price ratio is lower than earlier in 2018. And at the same time, we need to appreciate that at 117.9%, it’s significantly higher than any other June since 2012 (and likely a lot longer back). Now, take a look at the other “Junes” and the months before it in various years. Most of the time, that number is lower. This suggests a seasonal trend.
With the inventory and days to sell or days on market, I don’t think it’s as clear that there is a pattern which we might attribute as seasonal. With this last one, though, it seems pretty consistent, suggesting that we should almost expect it to happen. Of course, I only went back to 2012 here, but I would say that in my experience, a little pullback from buyers at about this time of year is pretty normal – at least most years.
Like most of Santa Clara County, the wild appreciation of the last 5 to 6 years in Blossom Valley seems to now be slowing, and maybe flattening. It is possible that we have hit the “peak of the market”, but it’s also possible that this is simply a seasonal pattern. Often in late spring to early summer, we see inventory levels rise while buyers pull back. This can cause home sale prices to quite appreciating, and in some years, prices decline just a little bit. In 2017, it seemed that the normal patterns simply broke, as late in the year – November and December – buying was at a feverish pitch normally reserved for March.
About Blossom Valley
The Blossom Valley area of San Jose is on the south end of the city and covers the 95123 and 95136 zip codes. For our MLS, it’s “area 12.” A more affordable section of Silicon Valley, Blossom Valley has much to offer in addition to more reasonable housing prices. Many areas enjoy views of the Santa Teresa Foothills or the Communications Hill knolls or even the coastal foothills in the distance, as with the photo below. One corner of it sits alongside beautiful Almaden Lake, too. One corner is located at the crossroads of Highways 85 and 87, making it an easy commute destination for those working in downtown San Jose. And there’s an abundance of shopping opportunities.
Much more could be written, but let’s now instead turn to the real estate market there.
First, “live,” automatically updating Altos Charts for San Jose 95123 and 95136 and single family homes (houses and duet homes). These use list prices, not sales prices.
The median list price of both 95123 and 95136, all prices, single family homes (houses and duet homes, if there are any).
Next, the median list price for just the San Jose 95123 area of Blossom Valley, and separated by price quartile:
And next, the median list price of just San Jose 95136 by price quartile:
Silicon Valley home prices are sky high. The average price of homes selling in Santa Clara County is about 1.25 million. Cambrian offers good schools, a reasonable commute to places like Apple in Cupertino, and a nice location near Los Gatos and Campbell with lower real estate prices. For that reason, it’s become a magnet for smart home buyers over the last 20 years. If you have the budget for an average Santa Clara County home, how far would it go in Cambrian? Here’s the data, pulled this week from MLSListings, to answer that question.
Homes in 95118 tend to be younger and bigger than those in 95124, but the 95124 area is generally preferred as the schools are usually better (Union or Cambrian Elementary Districts and Campbell Union High School District vs San Jose Unified schools, though some of these are quite good, too) and 95124 is closer to Campbell and Los Gatos. However, if someone is commuting to downtown San Jose, 95118 would be more convenient. The most expensive homes tend to be in 95124 with CUHSD. One caveat to this data is the quantity of results – Cambrian in the SJUSD has far fewer sales than CUHSD, and sometimes can be so low the data is unreliable. The smallest inventory for one of these categories this week was 7 in the SJUSD 95124 area.
See what’s selling in Cambrian now on the map below:
$1,479,900 : 3959 Paladin DR, SAN JOSE3 beds, 2 baths
$1,399,000 : 15035 Stratford DR, SAN JOSE3 beds, 1 bath
$1,399,888 : 15158 Charmeran AVE, SAN JOSE3 beds, 2 baths
$1,100,000 : 5222 Adalina CT, SAN JOSE3 beds, 3 baths
$1,198,000 : 5748 Croydon AVE, SAN JOSE3 beds, 2 baths
$1,100,000 : 1458 Cresthaven LN, SAN JOSE3 beds, 2 baths
$1,099,888 : 5346 Joseph LN, SAN JOSE4 beds, 2 baths
$1,088,888 : 1528 San Andreas AVE, SAN JOSE3 beds, 1 bath
$1,399,000 : 1990 Rosswood DR, SAN JOSE4 beds, 2 baths
$1,390,000 : 14661 Charmeran AVE, SAN JOSE3 beds, 2 baths
$1,298,000 : 4979 Brewster AVE, SAN JOSE3 beds, 2 baths
$1,499,000 : 5563 Copeland PL, SAN JOSE4 beds, 3 baths
$1,150,000 : 2726 Montavo PL, CAMPBELL3 beds, 3 baths
$1,400,000 : 4429 George Oaks DR, SAN JOSE4 beds, 3 baths
$1,199,000 : 5319 Estrade DR, SAN JOSE3 beds, 2 baths
$1,298,000 : 5397 Elrose AVE, SAN JOSE4 beds, 2 baths
$1,449,990 : 1479 Blossom Hill RD, SAN JOSE3 beds, 3 baths
$1,229,000 : 4902 Anna DR, SAN JOSE3 beds, 2 baths
$1,198,000 : 1640 Willowmont AVE, SAN JOSE3 beds, 2 baths
$1,295,000 : 2163 Sufonet DR, SAN JOSE3 beds, 2 baths
See all Real estate in the Cambrian community.
(all data current as of 8/19/2018)
Listing information deemed reliable but not guaranteed. Read full disclaimer.
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:
And a look at the chart from all back in 2015…
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.
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
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:
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.):
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. Continue reading
The cooling Silicon Valley real estate market is less of a question and more of an acknowledged fact (we wondered about it in June, we are sure now). If so, how can you tell? We need to begin by talking about “the market”.
First, Silicon Valley doesn’t have ONE market. The real estate market in Palo Alto or Cupertino is going to be very different from the realty market in Los Gatos, or the various parts of San Jose, such as Almaden, Willow Glen, Cambrian, or Blossom Valley. Ditto that with price points. It’s a very different “market” for entry level houses than for luxury homes.
But if we’re going to speak in broad, sweeping terms about cooling trends, what do we SEE? What do we HEAR? What’s happening with offers and open houses? These are the ways we measure the real estate climate. Often we in the industry hear the anecdotal evidence long before it’s reported in the paper. If we hear one Realtor friend after the next report quiet open houses, or few or no offers, we know there’s a climate change afoot.
I will tell you that I am hearing these things, which hint to a softer market for home buyers:
- Houses taking longer to sell in much of Silicon Valley / Santa Clara County
- Homes selling with fewer offers than 6 or 12 months ago
- Contingencies for loan, appraisal and inspection becoming more common
- More price reductions being necessary for than a few months ago
- Fewer ALL CASH offers
- Sale price to list price coming down a little
All of these suggest a mellowing of the housing market. Do the numbers line up?
The cooling Silicon Valley real estate market: seasonal fluctuations…
Historically, we do know that the busiest time for home sales is usually February – April. Some years it’s shorter or longer. (One particularly bad year, we had exactly 3 good weeks for selling in March and nothing more.) But what do the numbers tell us?
If we view the sale price to list price ratio, we expect there to be “seasonal fluctuations”. We don’t expect a hot seller’s market in December. Therefore, what’s often most helpful is comparing the same statistics year over year. Let’s do that. The image below provides the sale price to list price ratio for houses sold in Santa Clara County from Jan 1 2012 through Aug 24, 2016 (the day I grabbed this data). This was taken from the MLSListings.com site for agents (the private MLS).
I love this kind of presentation because it’s so easy to see both month over month and year over year statistics. Take a look at August (so far) for this year compared to the prior months in 2016. At 101.5% that seems like a fantastic ratio (they would go nuts for this in most of the U.S.). Now compare it to the prior months this year and you can see it’s been coming down since March. OK, now consider prior years…it’s mostly a very similar pattern. That tells us that “spring is hotter”. We already knew that, but seeing it for most of the last few years pretty much drives the point home.
But let’s compare August 2016 to August 2012- Aug 2015. That’s a better “apples to apples” comparison. And here it’s very clear that the real estate market in Silicon Valley really IS COOLER than it was in prior years for the same month. Any doubts? Check the same info for July – yes, all hotter until you get to July 2012. Now June – same as for July. May? Yes, again, hotter for that month in 2013, 2014, and 2015 but not 2012. In retrospect, we now know that 2012 was the year the market ratcheted up for a big, long run.
Before anyone begins screaming that the sky is falling, let me stop and remind you that we are talking about a sale price to list price ratio for the entire county that is at more than 101%. This is not a buyer’s market – at least not as a county. There are hotter and cooler pockets, yes, for sure.
What we are experiencing is a return to normalcy, a flattening out, less appreciation. We are not seeing price drops at this time.
And you know what? We’ve been expecting it.
You cannot sustain double digit appreciation forever.
The reality of the cooling Silicon Valley real estate market has implications for home buyers and home sellers:
Buyers, GET OFF THE FENCE. Interest rates are good. Buying conditions are reasonable again. Yes, inventory is low, but if you know what you want, you should be able to find it in 2-3 months tops. If you can’t, then you are not being realistic with what you think you can buy for your budget.
Sellers, it’s time to be more aggressive on pricing and adjust your expectations. Yes, your neighbor got 15 offers in February, but it’s not February any more. If you get 1-3 offers, that means you did a great job of staging, pricing, and getting your home marketed. Position your home to sell, and then get it done.
Where will we be in 6 or 9 months? I don’t know. It could be better or worse after the election. My advise is to get on with your life and not try to time it too carefully, because things can happen which none of us could anticipate. If you want or need to buy or sell, make it happen.There will always be political things going on, world events taking place. There is never a perfect time to buy or sell – but there is the time you want to do it. Go ahead.
And please let me know how I can help.
If a strong public high school is at the top of your priority list, you may find yourself looking at Los Gatos, Cambrian (area of San Jose), and Almaden (also in San Jose) – scenic areas along the southwest side of Silicon Valley, all of them featuring good to excellent high schools. I would caution against only judging an area, or a school, by its scores, though – often the culture at the campus, the offerings, and many other things can vary from one school to the next. Nothing beats visiting in person and talking with students, parents, faculty and staff.
2013 Growth API Scores
Disclaimers aside, scores do matter as an important part of the overall package. How do the high schools in these areas stack up? API scores are no longer used, so the numbers below are from the 2013 Growth API scores, the most current year available.
Ranked in order of API score:
Leland High – 889 (Almaden, southern area)
Los Gatos High – 883 (Los Gatos, central + small area in Almaden)
Leigh High – 833 (Los Gatos, east & Cambrian plus little of Almaden)
Pioneer High – 822 (Almaden, northern area & Cambrian)
Branham High – 810 (Cambrian & Blossom Valley)
Westmont High – 796 (Los Gatos, western area plus parts of Campbell and Saratoga)
What is the cost of homes in these areas?
To narrow it, let’s consider the same set of criteria: houses sold in the last 180 days within 1 mile of each high school named, with 3 bedrooms, 2 bathrooms, and 1500 – 2000 SF. (I’m leaving lot sizes out because it’s already a very small pool of homes.) To make it super simple, I’ll just include the price per SF and the average sale price of these houses.
Ranked in order of affordability – average sale price:
Pioneer High – 822 API – average price per sf $549.17 average sale price $919,057 (9 houses)
Branham High – 810 API – average price per sf $588.92 average sale price $969,295 (17 houses)
Leland High – 889 API – average price per sf $616.04 average sale price $1,071,250 (4 houses)
Leigh High – 833 API – average price per sf $686.00 average sale price $1,144,100 (20 houses)
Westmont High – 796 API – average price per sf $844.00 average sale price $1,329,500 (8 houses)
Los Gatos High – 883 API – average price per sf $917.95 average sale price $1,593,556 (9 houses)
Clearly, the market dictates that there are more than high school scores impacting home values (but you already knew that!).
Homes in the Leland High School area are a very good value, if you can find one (there were only 4, so too easy to have an impossibly small pool of choices).
Market drivers – beyond school scores
Downtown Los Gatos is charming and historic (with loads of beautiful older homes and buildings), it enjoys a vibrant night life and restaurant scene. It’s interesting! It’s “walkable”! People want to live in a part of Silicon Valley that isn’t just suburban sprawl – hence downtown LG has the biggest draw of all these areas. It’s not too far from Highway 85 (think Apple) but it’s not boring, like most of San Jose can be. Many are willing to pay much more to be part of Los Gatos and Los Gatos High School. A nice townhouse in LG, or a house in Cambrian? That may be the choice.
Commute times to places like Apple matter a lot, so homes on the west end of Los Gatos, in Campbell and parts of Saratoga in the Westmont HS area see a very high average sale price, even though the API score was less than 800. Schools matter but they aren’t the only thing that matter. Many home owners believe that the most important part of the education is the parents’ involvement (at home and at school). Many also have their kids at a private high school. Continue reading
Recently I’ve expanded my subscription to Altos Research – now you can sign up for my Altos newsletter and get information on any zip code in Santa Clara County (the San Jose area) sent to you each week. Altos uses list prices.
For sold info, please see my Silicon Valley Real Estate Report, which covers the cities and towns in Santa Clara County, San Mateo County, and Santa Cruz County (and is updated once a month) at popehandy.rereport.com The RE Report also has market data for areas within some cities such as San Jose (covering Almaden, Cambrian, Evergreen, Willow Glen, etc.), Mountain View, and Palo Alto. To view the RE Report for Almaden, please click here.
Below please find the Altos Research charts for the Almaden area of San Jose, which is zip code 95120. These charts will be automatically updated weekly. If you’d like to get this and more info by email each week, please sign up for the newsletter at the bottom.
Real Estate Market Reports Real Estate Market Research
|Mary Pope-Handy’s Real-time Real Estate Market Profile|
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Find market activity in the Almaden area of San Jose in the map below:
$1,550,000 : 6001 Rocco CT, SAN JOSE4 beds, 3 baths
$2,450,000 : 6949 Elwood RD, SAN JOSE5 beds, 4 baths
$1,248,888 : 6552 Camden AVE, SAN JOSE3 beds, 2 baths
$1,520,000 : 1267 Oakglen Way, SAN JOSE5 beds, 3 baths
$1,388,000 : 1352 Via De Los Reyes, SAN JOSE4 beds, 2 baths
$1,190,000 : 1080 Big Sur DR, SAN JOSE3 beds, 3 baths
$1,798,000 : 1153 El Prado DR, SAN JOSE4 beds, 3 baths
$2,198,880 : 7053 Huntsfield, SAN JOSE5 beds, 4 baths
$1,698,000 : 1604 Guadalajara CT, SAN JOSE4 beds, 2 baths
$1,599,999 : 7188 Mckean CT, SAN JOSE3 beds, 3 baths
See all Real estate in the Almaden Valley community.
(all data current as of 8/19/2018)
Listing information deemed reliable but not guaranteed. Read full disclaimer.