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 normal.  It’s not really much different now, in early February (just did a quick check on the MLS and it’s  1509 houses now – 630 have sold & closed in the last 30 days so that’s 2.4 months of inventory – a hot seller’s market).  This is what constitutes a very severe inventory shortage.

Demand hasn’t slackened, but supply has.  You know what that means – it will push prices up, it will make buyers crazy feeling.

Why is inventory so low?

A common question is this: why is inventory so low?  I believe that there are a few drivers.  First, many home owners who would like to move really need more equity to do so.  They are waiting for the market to recover.  Some may be waiting for prices to return to their previous highs (they could be waiting awhile). Others just need a little more to make the move possible at all.

Many owners of higher priced homes are holding on until the second half of 2012, when it is expected that there will be more people with buying power due to recent and upcoming IPOs.  Economists are now predicting a bit of a frenzy the second half of this year with prices in more expensive homes getting pushed up due to competition from employees of various high tech firms.  Smart buyers are trying to get in before that hits – a real challenge given the inventory situation.

Reality check: not every house is selling!

The best properties are selling well – those which are newer or nicely remodeled, in turn key condition, easy to see, great marketing with multiple photos, appropriate MLS exposure and priced aggressively.  This is what every buyer wants, the perfect house.  Most of my clients tell me that they are willing to replace carpet and repaint, but they don’t want to do anything big, such as kitchen or bathroom remodels, removing a pool, foundation or drainage repairs, etc.  No one does!

One of the easiest ways of improving your odds on being able to purchase a house is to move away from the new or fully remodeled vision of your ideal house.  Lower your budget a little, decide to prefer homes that have been sitting on the market not due to location issues, but rather to pricing or condition issues – both of which can be fixed.

For instance, many home buyers will take a pass on properties which have a pool in the backyard.  A few months back, I did some research and found that houses with pools are harder to sell right now.  Appraisers count a pool as an improvement, but many consumers view it as a liability – an ongoing monthly expense to heat and maintain and a risk if there are small children.  Many think that it will be overwhelmingly difficult to remove and relandscape a pool, so will not even consider writing an offer if the property includes an in ground pool.

Truth is, it’s not that hard to hire a company to redo a backyard; it is not invasive the way a kitchen remodel is.  You could have it done before even moving in!  The cost varies on whether you want the pool fully removed or partially as well as how to relandscape afterwards.  I have seen bids for pool demolition work under $10,000 (relandscaping extra) with more bids between $10,000 and $25,000.  Lawn and sprinklers are not so expensive to add!

The pool issue is just one example – there are many other properties for sale which are passed over due to the condition not being ideal.  Remodeling can feel a little scary but when inventory is so tight, it can be the ticket to home ownership.

Likewise with over priced properties.  Although most homes sell within a couple of percent of list price, there are exceptions.  Sometimes real estate is badly overpriced, and in those cases you may get a seller to agree to a larger price reduction – 10% may even fly.  (This is unusual, I would note. Usually if a house is not worth within 5% of list price, the seller is unreasonable and won’t accept an offer which is less. But sometimes it can work.)

Here’s to the over priced ugly duckling.  It could be your best friend when inventory is rock bottom!

Median List price for San Jose 95129

Average Days on Market for 95129

Inventory of houses for sale in San Jose 95129

How’s the Cupertino real estate market right now? Let’s start with the most basic window into conditions: supply and demand. (This graph and more info comes from my Cupertino Real Estate Report. Please click on the link for much more data and information – with statistics and trends dating back many years. Also you will find reports which are monthly, quarterly and annually generated. Finally, there’s a “property analysis” tab which enables you to check sales – and see images – around any Cupertino address. Please allow the analysis tab to do its slow load – it’s worth it – enjoy!)

Cupertino Real Estate Supply and Demand

Cupertino Real Estate Market Barometer of Supply and Demand

The realty market barometer is going through the roof!  This implies that it’s very easy for Cupertino home sellers to get their properties into contract and to the closing table, that it is a hot seller’s market in Cupertino.  Please note the darkest line reflects housing inventory – and it’s been plummeting for months.  (Look at each year for October through December and you will note that the pattern is seasonal – but the actual number of homes available does vary considerably.)  Now please note the pale gray line, which indicates the number of homes selling and closing escrow.  The bigger the gap between these lines, the more choices buyers have, and the narrower the gap, the fewer.  Right now, for the first time covered by the chart above, these lines have met, meaning that homes are selling at the same rate that they are coming on the market.  When supply matches or outpaces demand, prices nearly always rise.

But what about home prices in Cupertino?

Here’s a look at the numbers, in brief, as reported with closed sales in December 2011.  Surprisingly, although the market appears to be very hot, prices don’t seem to reflect that – perhaps “yet”.  The median sales price of houses in Cupertino are off significantly from both the month prior and the year prior, and the average sales price is down a little. The number of sales is off a little and the list price to sales price is off some too (both year over year and month over month). Meanwhile, the days on market are growing pretty steadily.

What’s happening? Why this contradiction between the market barometer and pricing?   First, the days on market reflect the inventory which recently sold, not the inventory which is available today.  This tells us that many homes that have been on the market awhile are now being purchased. (Probably others went off the market for the holidays, which is typical for the season.)

With interest rates for conforming loans dipping below 4% (I believe this is an all time historic low), many buyers are deciding it’s time to get off the fence and purchase a house at last.  But there really isn’t much inventory – it’s about 34% lower than the month before and almost 38% lower than the year before!

I think that we will see prices beginning to move upwards with January’s closings.  The market this month in the west valley areas is much, much more active than a year ago.  This is anecdotal but I have been speaking with a lot of Realtors about how busy they are and everyone seems to be on overload with new buyers trying to get a home before prices or interest rates go up.  I expect to see the prices of houses being sold in Los Gatos, Saratoga, Cupertino – at least in the more affordable price points of these areas – to tick upwards this month.  We’ll know in early February if I’m correct!

Now let’s turn to another tool to see how the Cupertino market is faring for listed properties.  For this I will use graphs from Altos Research, to which I also have a subscription. These are LIVE CHARTS and will automatically update themselves weekly – so even if the article is older, this info is now!

Cupertino Median List Prices Compared to Neighboring Saratoga, Sunnyvale and Los Altos

We know that the median sales price in Cupertino has slipped. But what of the list price, and how does it compare to other areas nearby?

Los Altos is faring the best of these 4 areas. Saratoga was dippping but now rising again. Sunnyvale has been somewhat flat recently. But Cupertino’s prices are continuing to fall. Perhaps these low prices are the drivers for the crazy hot market activity.

Cupertino median list price of houses by price quartile

Focusing just on Cupertino, let’s see how the information looks if we break it down into the pricing tier. Often the entry level houses are a very different “market” than the luxury homes segment.

The last few months have had noticeable declines for the lowest three segments, but there’s been an uptick (until recently) for the most expensive properties in this city.

What if we look back more than a year? Combining the quartiles, the trends look pretty stark:

Here’s the same data just for the top quartile, the most expensive properties in Cupertino:

For the 2nd top tier (upper middle):

3rd level or lower middle:

And most affordable Cupertino houses or lowest quartile:

Cupertino Days on Market by Price Quartile: What’s Selling Fastest

Not surprisingly, the luxury market has had a harder time selling than entry level houses in Cupertino. This is true for most of the West Valley areas of Santa Clara County. Here’s a look at the days on market (DOM) for Cupertino by price point over the last year.

Remember, all real estate is local. For information on your exact area or price point, please contact me. I work with my clients to pinpoint the pricing.

What drives the Cupertino real estate market?

The residential real estate market in Cupertino, California, is driven in large part by the extremely high quality of its local public schools.  Many in Silicon Valley would state that for San Jose area home buyers, Cupertino offers the best “bang for the buck” when one lines up the cost of purchasing a home to the schools’ API scores. (Conversely, some residents are concerned that the very top schools – including but not limited to Cupertino – are so focused on academics that there may be too much pressure on kids and may lack balance for them.)

Other drivers are, of course, the local economy (such as the initial public offerings happening with some of the Silicon Valley tech giants), the availability of more affordable financing, and how the realty market in general is performing for any particular price point or particular school area. (Even within Cupertino, some schools are much more in demand than others.)  Comments in this article refer generally to this city of about 50,000 residents – real estate is local, though, so for precise information in any given area or tier of the market, please contact me!

Houses for sale in Cupertino California

Please browse houses for sale in Cupertino, listed from the lowest prices up to the highest.

Showing properties 1 - 5 of 17. See more city of Cupertino real estate.
(all data current as of 2/11/2012)

1. $649,900 : 10160 Calvert Dr, Cupertino
   
   3 beds, 2 full baths

   Home size: 1,562 sq ft

   Lot size: 5,643 sq ft
   
2. $748,800 : 18920 Tilson Av, Cupertino
   
   3 beds, 1 full bath

   Home size: 1,039 sq ft

   Lot size: 5,400 sq ft
   
3. $749,000 : 10335 Moretti Dr, Cupertino
   
   4 beds, 3 full baths

   Home size: 1,267 sq ft

   Lot size: 4,947 sq ft
   
4. $839,000 : 10240 Yoshino Pl, Cupertino
   
   3 beds, 2 full baths

   Home size: 1,688 sq ft

   Lot size: 3,168 sq ft
   
5. $879,000 : 10285 Moretti Dr, Cupertino
   
   4 beds, 3 full baths

   Home size: 1,787 sq ft

   Lot size: 6,000 sq ft
   

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

The Silicon Valley real estate market is a mixed bag and home buyers and sellers here may read the headlines and wonder why things seem so different in the news than in their own personal reality!

Here are a few quick facts and observations about the San Jose and Santa Clara County real estate market for houses, condos and townhouses:

• It is a seller’s market for both houses and condominiums in Santa Clara County (homes are selling well and very close to list price on average)
• The average and median sales price for houses & duet homes is down month over month and year over year (properties that are selling are those which are priced lower)
• For condos and townhomes, prices are up month over month (but down year over year).  The condo market here has taken a huge beating in recent years.
• The market is not equally hot everywhere!  It’s red hot in Palo Alto, Los Altos, Cupertino, and areas nearby (Santa Clara, Sunnyvale, Mountain View).  It is also hot where there are low priced foreclosure houses which can be bought at bargain rates.  The move-up market has been tough entry level houses in the best school areas are very sought after right now.  (The market is decidedly cooler in Los Gatos and Almaden Valley.)
• Homes that are selling best are completely remodeled and have no “issues” (such as high voltage lines, poor floorplan, proximity to something undesirable etc.) and priced aggressively  OR are distressed sales with great pricing

In the best areas, or those with the hottest markets, we are seeing some multiple offers with overbidding.  At the same time, we are finding homes that look great but languish on the market due to some issue or another or pricing that’s not as competitive as it needs to be for today’s market (or both).

Sellers: if your home isn’t selling and it’s had good exposure, plenty of photos etc. and been on the market for a month or more, see if there’s an issue that you can fix or mitigate.  Obviously you cannot move high voltage lines or a freeway, but if there are odors, clutter, or landscaping issues, it would be wise to fix them.  That failing, to get your house sold it will probably require a significant price cut.  The longer it’s been on the market without a price change, probably the deeper the adjustment will need to be.

Buyers: tired of losing out on multiple offers?  That “perfect home” is the one that gets all the attention – but sometimes, just around the corner, there’s a property that with a little fixing could be just as sweet and that one can be purchased without so much competition or overbidding, so ultimately will cost you a lot less.  Every other buyer wants what you want: a turnkey home that needs nothing (inside or out).  But if you will push yourself a little and buy one which only needs one or two changes, you will find that your offer would be most welcome!

For instance, we know that right now (in these frugal times), many buyers do not want a pool – probably because of the ongoing maintenance costs.  An in-ground pool can be filled for anywhere from $8000 to $20,000 or $25,000, depending on a lot of variables.  If you want to buy a home with less competition, find the house with a pool and be willing to take on removing or filling it and re-landscaping.   This is a fixable issue!

For more reading see:

A summary of tips for multiple offer situations in Silicon Valley real estate contracts
(links to multiple posts on various aspects of competing in multiples)

Silicon Valley real estate tip: pinpoint the pricing, beware common buyer mistakes and fears

Multiple offers have returned to many segments of the Silicon Valley real estate market.  We are hearing about them in Palo Alto, Cupertino, Mountain View – areas where newly minted IPO money is having an impact – but also in more modest, middle class areas such as San Jose’s Cambrian neighborhood. The trend appears to be spreading.

What Silicon Valley home sellers need to know and do to attract multiple offers

If you’re a Silicon Valley home seller, what do you need to know to try to get multiples on your home?  What should you beware of?  In short, here’s what needs to happen if you want to attract multiple offers on your home for sale:

1. The home must be turnkey, either fully remodeled or close to it – it must look like there’s nothing or very little for a buyer to do.  In addition to being turnkey, it must be squeaky clean and well staged! It needs to be comfortable – not too hot, not too cold. You want buyers and their agent to linger longer.
   
2. The price must be at or even under market value.  That is, you must be willing to price it aggressively.  Think it’s worth $1,050,000?  You might list it at $999,999 to get in under a major price threshold and to be the very best, most attractive property for the money. Yes, it might be under priced.  Over priced listings get either one offer at best or, more likely, none at all.
3. The property must be highly accessible. If it is hard to see, you probably won’t get multiple offers (and may get none at all).  (Please see articles on accessibility and on open houses.)
4. Finally, the property must be well marketed.  This includes a wide range of factors ranging from photographs, text, fliers, signs, and even the commission rate offered to the buyer’s side.

What Silicon Valley home buyers need to know and do to compete with multiple offers

If you’re a Silicon Valley home buyer, how do you win out in multiples without giving away all of your rights or overpaying for your house/home?

Over the last few years, I’ve written a number of articles about multiple offers and tips for buyers when competing (concepts to beware of, issues around contingencies, financing and more).  This is a bit like a multi-chapter ebook on how to work with multiple offers.  I hope it’s helpful!

By way of quick summary: you must cover a few areas very, very well:

1. You must be pre-approved by a reputable lender (fully pre-approved)
2. You must have a strong down payment (20% or more)
3. You must be willing to put 3% down for your initial deposit (also called a good faith deposit)
4. You must have a good agent helping you – he or she must do a good job completing the paperwork (it needs to be thorough and without any major mistakes), must communicate well with the listing agent and represent you and himself/herself as a great team with which the listing agent and sellers will want to work
5. You must have an excellent sense of pricing.  Your Realtor should “run the comps” for you, or may even prepare a competitive or comparative market analysis on the home you wish to purchase.  Pay attention to where the value  lies – sometimes that has little to do with the list price!
6. Be prepared to balance out the price and terms offered so that you do not feel like you are giving away all your rights.  Some real estate agents may push consumers to write contracts with no contingencies for home inspection, property condition, appraisal or finance.  I believe that this is a risky and unwarranted practice – but learn about it since your competitors may be doing this.
7. Read all of the articles below – they are here to help you!

Tips for Writing a Competitive Offer  Part One

Writing an Offer in a Multiples Situation? Financing Tips Part 2

Writing Strong Offers: More Financing Tips Part 3

Tips for Home Buyers Competing Against Multiple Offers – More Financing Tips Part 4

Competing Against Multiple Offers: Contingencies and Timeframes Part 5

Real Estate Purchase Offer Terms to Consider When Competing in Multiple Offers  Part 6

Sometimes the List Price Isn’t the Expected Sales Price, So Run Comps!

The Advantages of Presenting and Receiving Offers In Person

Interested in working with an agent who’s highly experienced with multiple offers?  Call or email me today!

The Los Gatos real estate market for houses & duet homes looks pretty good at first glance, but if you scratch the surface and analyze some of the sub-markets, we see that it varies widely as to how “the” market is faring. (It’s not one market, but many smaller markets near each other.)

Yesterday I spent some time pulling apart the housing market in Los Gatos (for houses and duet homes, not condos) by school district and price point to get the months of inventory.  Here’s a brief summary:

The market gets substantially colder as you go up in price – read more and get more details on Live in Los Gatos!

More reading…

How’s the Los Gatos Real Estate Market Doing Now?
Please also view the current statistics care of Altos Research on my popehandy.com site on the Los Gatos real estate market (uses list prices rather than solds):
How’s the Real Estate Market in Los Gatos?

Often on this blog we look at specific, hyper local real estate markets in Santa Clara County (as with Saratoga, Campbell, Los Gatos, or even a larger city such as San Jose – or parts of it such as Almaden or Cambrian – or even subsets of any of those). Today, though, we’ll check in on Santa Clara County as a whole, which is home to 1.8 million people and many diverse markets.

The number of homes being sold in Silicon Valley is trending upward now. Prices, though, while higher than a month ago are down about 5.4% from a year before. Let’s see it visually:

Pricing of houses sold in Santa Clara County

Both median and average sales prices are shown in the graph below (which is from the printable version of my Santa Clara County Real Estate Report; you can also view an online version at popehandy.rereport.com). Note the trends with several “peaks and valleys” over the last five years or so.

To check on particular areas within the county, please visit my RE Report and select the city, town, or area within San Jose that you want to better understand.

Did you buy your house at the peak of the market?

Recently I met with some of my past clients, who purchased their San Jose house close to the height of the market (2005-2007).  In those days it was a hot seller’s market (not unlike many parts of the Silicon Valley real estate landscape today, actually), and buyers routinely purchased their homes “As Is“, meaning no repairs provided by the sellers.  Desperate to get in when prices were appreciating fast, it seemed that most home buyers said “we’ll take care of it after we own it“.

But they forgot.

Actually this didn’t just happen during the peak of the market here in Santa Clara County – there’s always a percentage of consumers who buy As Is to get a better price.  They have good intentions about taking care of the mold, the termites, the roof and whatever else might not be either in good working order or free of infestation.  But once they move in, the “to do list” doesn’t seem to have those items as a high priority, and over time they completely fall through the cracks.

Pull out your old file, find your inspection reports and review them, especially if you are preparing to sell your home

Today I want to encourage you to dig out your old home inspection and pest reports, dust them off, and have a look.  Did you need to address a problem with termites, electrical issues, leaks?  Is there something to take care of with the roof, gutters, dry rot or fungus?  All of those things do not self-correct, but instead grow worse over time. 

If your reports are more than three or five years old, you might consider getting new ones done since in all likelihood there’s more work, possibly in new areas, now. Just make sure you hire a reputable company which won’t gloss over problems, leaving them latent and waiting to cost you more in the end.  Don’t toss your old inspections out – have a look and see if everything that used to be called out is covered.  If you are planning to stay put, is best to correct everything so that your home is kept in good condition for the long haul. If you are planning to sell your home, it’s important to fix it up first if you want to get the most for your sale.  The market is very different from the peak, and having the home improvement work done is more important than ever now.

Are you buying a distressed property (short sale, bank owned, or pre-foreclosure) in Silicon Valley?

If you are purchasing a short sale, pre-foreclosure or bank owned home – let alone one at auction – please be aware that these properties are most often neglected and have more than a normal share of deferred maintenance.

You or your Realtor can look up the sales history for the home.  If it was purchased between 2005 and 2008, there’s a good chance that it was sold As Is and that if any repairs were needed, they weren’t done.

With pre-foreclosures or short sales, sometimes the sellers are well organized and will still have their old reports.  The agent may not be aware that these are available, but they can provide at least some information since pre-sale inspections are usually not provided with distressed sales.

For more reading on this topic:

How often should you get a termite inspection?

Would you recognize signs of subterranean termites if you saw them?

Watch for Dampwood Termites in Silicon Valley!

Almaden Valley, which primarily consists of the 95120 zip code area of San Jose, is well known for its scenic beauty, great schools and low crime.

For people working in downtown San Jose, it is also fairly convenient – it’s almost a straight shot up either Almaden Expressway or Highway 87 to get into the downtown area, often just a 20 to 30 minute commute.

Within Silicon Valley, Almaden is regarded as a high-end neighborhood and very desirable. In this post we’ll discuss the geography of the valley, the advantages and disadvantages of being in Almaden, the public schools in 95120, the market conditions for the luxury homes there and finally you’ll be able to browse a list of luxury & estate homes for sale in the Amaden area of Silicon Valley.

The geography of the valley:

There are no shortage of hillside homes in this enclave of southwest San Jose. To the west lies the Santa Cruz Mountains, with the nearby peak of Mt. Umunhum looking over the valley. To the east sits the much lower and grassier Santa Teresa Foothills.  The oldest part of Almaden, ironically called New Almaden, is at the bottom of the v-shaped valley.  Continue further through the Cinnabar Hills and drive long enough and you’ll find yourself in Morgan Hill!

Advantages and Disadvantages:

One of the big advantages of purchasing a luxury home in San Jose’s Almaden Valley is that ordinarily you can get a little more “house for the money” then if you were purchasing similar real estate in Los Gatos, Monte Sereno or Saratoga (let alone Palo Alto or Los Altos).   Often, too, the homes are a little younger (though not always). In the southernmost tip, there’s quite a bit of equestrian property, too.  San Jose is a wonderful city for children, and one of the main drivers for people and families moving there is the quality of life for kids.  That makes San Jose real estate prized everywhere, but especially in this southwestern enclave.

One of the potential disadvantages is that like any small valley, it can heat up in summer and traffic can sometimes be a little more tangled. Luckily, though, luxury homes are virtually always air conditioned and there are many alternate routes, so these are not insurmountable issues.

Schools in Almaden

The public school situation needs a little bit of explaining as it tends to confuse most newcomers.  (Please find the 2010 API scores for Santa Clara County here.)

In the 95120 zip code, there are three different school districts at play, and the schools run from good to great:

• most of Almaden belongs to the San Jose Unified School District (which includes both elementary, middle and high schools)
• some of Almaden, though, belongs to the Union School District (elementary and middle schools) and the Campbell Union High School District (Montevideo, Oak Canyon & nearby neighborhoods)
• and a tiny sliver, including just a few streets close to Hicks Road, actually belong to the Los Gatos School District and the Los Gatos-Saratoga Union High School District

Within San Jose Unified, all the local elementary and middle schools are very good.  At the high school level, though, there’s a big difference between the API scores at Pioneer (823 in 2010) versus those at Leland High School (890).  So often, home buyers of high end housing will prefer a more southern location in Almaden to secure places at Leland.

How’s the market for high end homes in San Jose’s Almaden Valley 95120? San Jose Real Estate & The Almaden Market

(Read the state of San Jose real estate in Almaden in ALL price ranges via  my REReport  Almaden stats and market trends.)

Dynamic reports – next we’ll use Altos Research charts to look at the top 50% of homes for sale (the more expensive half) next.  These charts are dynamic so will always be current.

Prices of homes for sale among the top 50% in San Jose 95120 (Almaden Valley):

First, just over the last year…

Next, going back several years….

Average Days on Market of homes for sale (most expensive half):

Inventory

Average price per square foot

Want to learn more? Please also see:
The Silicon Valley Luxury Home Market
The Luxury Real Estate Market in Almaden, Los Gatos, Monte Sereno, and Saratoga
Hacienda Cemetery and Memorial Park in New Almaden
Graystone and Pfeiffer Ranch Areas of Almaden Valley

View Almaden Valley Estates & Luxury Homes for Sale

Prices from $1,500,000 and up.

Showing properties 1 - 5 of 11. See more 95120 zip code real estate.
(all data current as of 2/11/2012)

1. $2,950,000 : 20315 Mckean Rd, San Jose
   
   6 beds, 3 full, 1 part baths

   Home size: 5,000 sq ft

   Lot size: 2.50 ac
   
2. $2,650,000 : 18680 Vista De Almaden Ct, San Jose
   
   5 beds, 5 full, 1 part baths

   Home size: 6,000 sq ft

   Lot size: 1.59 ac
   
3. $2,549,000 : 7184 Glenview Dr, San Jose
   
   5 beds, 4 full, 1 part baths

   Home size: 6,251 sq ft

   Lot size: 20,473 sq ft
   
4. $2,188,000 : 18590 Almaden Rd, San Jose
   
   4 beds, 3 full baths

   Home size: 3,471 sq ft

   Lot size: 1.32 ac
   
5. $2,100,000 : 6082 Almaden Rd, San Jose
   
   3 beds, 2 full baths

   Home size: 1,800 sq ft

   Lot size: 1.92 ac
   

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

Sometimes the differences are not what’s outside, but what’s inside.  When Silicon Valley home buyers are looking at real estate around the south bay, they tend to care a lot about the rooms which are most expensive to remodel: the kitchen and the bathrooms.

But sometimes they don’t look closely enough, or ask questions, when they ought to.

If you only look at the cabinetry from the outside, for instance, you won’t know:

• whether the cabinets have been refaced or replaced – but if you open up a door, you can tell!
• whether the vent seems to blow air back into the kitchen or if it’s more likely to vent outside
• whether the cabinet’s interiors are shelves, pullouts or include other special features such as a lazy Susan, deep pantry or spice shelves, recycling tubs, or other goodies!
• on a simple level, whether or not the drawers and cabinet doors operate smoothly or not

While it’s not OK to open up drawers of furniture (such as dresser drawers), since they don’t get sold with the house, you should inspect carefully any of the attached features which are part of the real estate transaction.

Some San Jose, Los Gatos or Saratoga kitchens and baths look good from the outside, but not so impressive if you look “under the hood” as it were.  Slow down and make sure you check these things out before you draft that offer!

Not everyone is familiar with the term “patio home” or “zero lot line” house when searching for Silicon Valley real estate.  Recently a listing agent of such a property called me for feedback and when I told her that my clients did not want a zero lot line home, she didn’t know what I was talking about. She had no idea that this term applied to her listing!

So I thought maybe this topic deserved a little more attention.

What does zero lot line mean?

With most houses, the structure is set into the lot or land such that the property boundaries are at least a few feet away on all sides – often 5 or 8 feet.  One common exception is garages in older parts of Willow Glen, Los Gatos, downtown San Jose, etc., where often these buildings were set directly against the property line on one or two sides.

When a house is right up against the property line, directly on the line, that’s referred to as a zero lot line and is usually referred to as a patio home.  To view that wall, you’d literally have to go onto your neighbor’s lot to have a look.  Although this is not terribly uncommon in dense, urban areas, it’s fairly infrequent in Silicon Valley.

Why are homes designed on zero lot line properties?  The main reason is to increase the density while providing more yard to the home owner.  Rather than having two 8′ side yards, perhaps you’ll have one much larger 16′ yard.

Interestingly, these houses do not seem to sell for less with the zero lot line – at least not that I have been able to discern. (That’s counter-intuitive….)

How can you tell if it’s a zero lot line house?

It should be disclosed in the MLS as such, but often isn’t (sometimes the listing agent doesn’t even know), so you’ll have to look carefully at the neighborhood and the property to see.  Here are some clues:

• you’re most likely to find patio homes where the houses sit on very small lots
• most of the time, there are no windows on the side built against the property boundary (though in Silver Creek there are a number of these with glass block windows put into bathrooms – so there is some light, but no opening into the neighbor’s yard)
• try to walk all the way around the property without going into a neighbor’s yard – if you can’t, that’s your red flag
• most of the time, patio homes are part of a home owner’s association and are located on private roads

Where are these patio homes located?

They are really all over Santa Clara County as a good alternative between having super small lots vs a townhouse.  We are seeing more and more of these in younger construction especially.

• in Almaden Valley, the Glencrest development (by Shapell, a great builder, with top rated schools there: Williams, Bret Harte and Leland) – very popular!
• in Silver Creek, there are condos and single family homes, but some of the houses further down into the valley are patio homes
• in Cambrian, along the Almaden border, there are patio homes in 2 of the 3 subdivisions of the Almaden Winery neighborhood (Tresor and Vineland) the Vintage subdivision is not zero lot line) (See one such home I sold on Le Fevre Drive in 2010 by clicking on the link)
• and many other places throughout the San Jose area!

One caution: sometimes there are townhome communities where a unit is sold as if it is a “duet home” or “patio home”.  Be sure to read the preliminary title report carefully to note the type of ownership in the common areas as well as the unit itself. You might be surprised!

Yesterday we looked at the types of home sales around Silicon Valley by price point.  Not terribly surprising, most of the short sales and bank owned homes were in the lowest price ranges.  Today we’ll look at this type of information not by pricing tier but instead by geography – in other words, by either town, city or district of San Jose (area).  This post will not cover every area but will be a sampling a few communities, mostly on the west side of the valley (since that’s primarily where I work).

By way of reminder, the small image to the left reflects Santa Clara County’s houses for sale as a whole – all areas and all price points. (You can see the full sized image by clicking on it.) The green area represents “regular home sales” and the brick red and light orange signify distressed  properties listed on the MLS for sale (red is short sales and orange is bank owned or REOs). Next let’s see a few regions within the county to see how things are faring geographically.

1. Almaden Valley area of San Jose – homes listed for sale by type – very few distressed properties on the market!

Almaden is a lovely southwest San Jose suburban community (zip code 95120) that grew up initially with the cinnabar or mercury mining activity.  Today it’s an upscale area of more expensive homes than most of the county, it enjoys really good schools and scenic views of the coastal range as well as the Santa Teresa Foothills.  Housing here is costly but residents love the quality of life. Since the cost of homes for sale here is high, it’s not super surprising, after seeing yesterday’s post, that there are very few distressed homes on the market here. Next we’ll check the other extreme….

2. Alum Rock area of San Jose – this is a less wealthy part of Santa Clara County and generally has been harder hit by the mortgage and housing crisis.

In this east San Jose neighborhood of Alum Rock (near beautiful Alum Rock Park), almost half the homes listed for sale are either short sales or bank owned properties.  That said, Alum Rock has some areas which are much more upscale (and elevated), some with many many acres of land and those pricier properties are not quite so badly hit with the distressed property deluge.

3. Cambrian area of San Jose – a west valley community that often closely reflects Santa Clara County as a whole

The Cambrian or Cambrian Park district of San Jose often has prices, days on market and other trends which are very similar to Santa Clara County so it’s often a good “gauge” of how the area is doing generally.  If you compare this graph to the one at the top of this post, you’ll find them very similar – about 2/3 of listed houses and duet homes for sale are “regular” or non-distressed sales.

5.  Campbell -a little more expensive, great downtown, popular area

Campbell is exceedingly popular as it’s got a charming downtown, enjoys light rail access and is part of the Los Gatos Creek Trail. It’s close to Los Gatos, but more affordable. Here about 70% of the homes listed for sale on our multiple listing service or MLS are regular sales, so a little healthier than most of Silicon Valley.

6. Los Gatos – a more expensive community, fewer distressed houses for sale

In Los Gatos, there are right now just 3 short sales on the market (for houses and duet homes) and NO bank owned homes. As you can see, it’s overwhelmingly “normal sales” and this helps a lot with home values.

A year or so ago, we had a cluster of short sales in one particular east Los Gatos neighborhood and it was really damaging the property values of the “regular sellers’” homes. It’s encouraging to see this correct a bit.

7. Monte Sereno – more expensive still – no distressed houses for sale right now!

Monte Sereno is a tiny city with 4,000 residents. It’s more expensive then neighboring Los Gatos, with whom it shares police, schools, library and more.

With no businesses or commercial buildings, Monte Sereno enjoys a quieter lifestyle.  Most of the activity is either around Daves Avenue School, the post office/city building or the horse trails!

8. Palo Alto -home to Stanford and classy luxury homes

Stately and vibrant Palo Alto is home to Stanford University (and the Lucille Packard Hospital, which is a world class facility).  Schools in this city are top-rated in Silicon Valley.  The city is beautiful and there’s lots to do.  For many reasons, then, Palo Alto is probably the most sought after address in the region, and home prices reflect its desireability. Not surprisingly, then, it’s not likely that home buyers will find many low-cost distressed properties on the market.  When they do appear, they tend to go fast.  As of this writing, there’s just one short sale and no bank owned homes available there.

9. Saratoga – great schools, scenic vista, highly regarded Silicon Valley community

Saratoga is not as costly as Palo Alto, but within Santa Clara County it’s right up there near the top for least affordable.

What I find most interesting here is not the small number of distressed properties on the MLS in Saratoga, but rather that there’s an equal number of short sales as there are REOs (bank owned).  Usually the ratio is more 2 – to – 1.  Maybe it’s a fluke? We’ll have to check and see down the road!

What we see when looking at Silicon Valley houses listed for sale by sale type is that the geographical differences largely mimic the pricing tiers.  The more expensive the area – or the home within it – the less likely you are to find that bargain priced property.

For more info on Silicon Valley Communities, please also see my website’s community information page.

Sometimes sellers want to sell their home without the representation of a licensed real estate agent.  But to try to encourage agents to show their home to a buyer, those same sellers might offer a buyer’s agent a commission (often somewhere between 2.5 and 3%, but it varies).  The sellers are surprised when they don’t get a ton of real estate professionals clamoring to see and show their properties.

What’s going on?  Why are licensed real estate sales people sometimes (or often) reluctant to show the home of an “unrepresented seller” (or “for sale by owner” seller)?

There are a couple of reasons why Realtors and other licensees may not be wildly enthusiastic about getting into a transaction with an unrepresented seller.

1. There is more liability for the licensed real estate professional
2. There is the risk of “implied agency“

Sometimes, as you know, transactions don’t go as planned and buyers or sellers are both unhappy at the end and the whole mess may end up in court.  (Knock on wood, this has not happened to me!) If it does, the judge may well look at everyone involved and find that there was one professional real estate person in the bunch.  The liability may shift greatly onto that person – even if he or she was not representing both sides (was not a dual agent) and was not compensated for the responsibility of both sides.

When both parties are working with a real estate professional (salesperson or broker), those agents will help to advise and guide their clients.  But when an agent only represents one side, it gets very very sticky.   As agents, we owe a higher duty to our clients, a fiduciary duty, but only the duty of fair and honest dealing with the other side.  So, those “FSBO” (for sale by owners) are not going to get the kind of advice and guidance they’d get from having their own agent in their corner.  But if it goes to a lawsuit, what extra burden might the court decide the one agent should have provided to both sides?

When both sides have an agent, there is peace of mind that the liability is fairly split.  If the seller is confused, it is not going to be the buyer’s agent’s fault.  But if there is no seller’s agent or listing agent, the buyer’s agent may be taking on more risk that is really necessary, or possibly wise.

Implied agency is a scary concept to me and to other real estate professionals.  The agency relationship is not based upon payment, but instead upon the buyer or seller’s reliance upon the guidance offered by the real estate licensee.

If we take on a sale where only our client is represented, there is a very big and real fear that the other side will claim that they relied upon the guidance of the one realty professional in the transaction.

When a Realtor or other real estate licensee is working for either side (or both), then there won’t be any implied agency.  But when one side is unrepresented, this is a real possibility.

So, sellers of “for sale by owner” properties, the agents are going to feel that it’s far safer to work with a seller who has representation – his or her or their own agent.  Further, their buyer clients may feel like it’s a more level playing field, and therefore also safer, if the seller is also getting professional guidance.

Selling “by owner” can sometimes work for home owners, particularly if their hosue, condo or townhouse is in a highly desireable area and especially when it’s a “hot” market.  Today’s market is more challenging, though: it’s harder for loans to go through, buyers are demanding that properties be in great shape, and the general “nervousness” of buyers can make it tougher to sell.  Offering a commission to buyer’s agents may be a huge help in getting your property sold.  But if you’re finding that agents are simply not that interested, it may be because you do not understand the risk they see in working with a seller who lacks professional representation.

One of the many reasons the Almaden Valley of San Jose is so popular is the wonderful public schools.  Almaden, like the rest of the county, does not have “easy” school district boundaries.  Instead, it’s complicated – Almaden is served by several different public school districts and various schools within one of them.  It can be very confusing for home buyers to figure out which areas belong to which elementary, middle and high schools. Today we’ll address this broad topic, looking at both the districts and the individual schools, providing links to both.  We’ll include API scores and maps of district and school boundaries too.

Disclaimers about schools of attendance:

First, schools – especially the most popular ones – are sometimes impacted, or full.  If you move into an area it is likely that you can have your students attend the neighborhood school but it is NOT GUARANTEED.  For example, if your nearest or assigned school is Williams but it’s full, your child may be assigned to Simonds or some other elementary school.  You will remain in the same district but may not have the nearest school.  This is particularly a problem when moves happen in the middle of the school year.

Second, sometimes boundaries change between schools in the same district.  This usually only happens after a lot of public debate and discussion, but it can happen. (This is also true for some designated natural hazard zones such as flood plains – those maps can and do sometimes change!)

Third, the San Jose Unified Schools in the Almaden Valley did have court-ordered busing from the mid 1980s to the mid 1990s to help with desegregation. This practice ended in 1996 and the court order was lifted in 2003.  You can read about the history of the San Jose Unified School District online.  Although it appears unlikely that busing will happen again, I cannot guarantee that it won’t.

These are the three broad regions and their schools:

1. San Jose Unified School District covers the majority of Almaden (it includes schools at all levels).
2. The Union School District and Campbell Union High School District is the next largest school district for Almaden – this is the northwest corner of Almaden
3. The Los Gatos Union School District & Los Gatos-Saratoga Joint Union High School District. This covers just a very few properties on or near Guadalupe Mines Road (Via Saronno, Via Lugano, Via Fortuna, Via Maggiore, part of Via Campagna)

The Santa Clara County Office of Education oversees all of the school districts in our county.

Public High Schools serving Almaden (you can check the API scores of these and all Santa Clara County public schools online):

1. Leland High School (SJUSD) follows Almaden Expressway and is the school for the southern part of Almaden Valley. API scores are high (890 in 2010) so many home buyers prefer to be within this area.
2. Pioneer High School (SJUSD) is not located in Almaden, but rather in Blossom Valley, but is the school for a significant number of Almaden homes east of Almaden Expressway (API 823 in 2010)
3. Leigh High School (API  817 in 2010) and Branham High School (API 781 in 2010) (CUHSD) are both options for most of the northern part of Almaden which is close to Los Gatos
4. Los Gatos High School (API 873 in 2010) (LGSUHSD) serves a tiny sliver of homes just off Guadalupe Mines Road.  It must be at least a 20 minute drive for these students to get there, but the school boundaries were drawn long before the city of San Jose and the town of Los Gatos finalized their limits.

Public Middle Schools for Almaden Valley – all of these Almaden middle schools or junior high schools exceed the county’s target number of 800, and most of them can boast API scores of over 900.

1. Bret Harte Middle School (SJUSD) – prized school with APIs over 900 (909 in 2010) – adjacent to Leland HS
2. Castillero  Middle School (SJUSD) – a good school, APIs just over 800 (806 in 2010)
3. Dartmouth Middle School (Union School District) – highly regarded with 2010 API at 900
4. Fisher Middle School (LGUSD) – highly regarded with high scores (910 in 2010)

Public Elementary Schools for Almaden Valley students: every public elementary school in Almaden has excellent API scores, all over 900

1. Williams Elementary (SJUSD)  -  incredibly high scoring with 972 API score in 2010
2. Graystone Elementary (SJUSD) – highly regarded, 958 API in 2010
3. Simonds Elementary (SJUSD) – another high powered school with 968 API in 2010
4. Los Alamitos Elementary (SJUSD) – also over 900 APIs, in 2010 it was at 916
5. Guadalupe Elementary (Union Schools) – also over 900 APIs, scored 930 in 2010
6. Blossom Hill Elementary (LGUSD) – 956 API in 2010

To which school is a particular Almaden Valley home assigned?

It can be tricky to find out which property belongs to which district or individual school.  Within the San Jose Unified School District (which covers much of San Jose and some of Santa Clara), you can use the School Finder site online to see where an address falls. For other areas, there are maps of school boundaries.

Regarding the Almaden Valley luxury home market, most are in the San Jose Unified School District and feed into Bret Harte and Leland High.

Which part of Almaden Valley has the very best schools?

If you are basing the idea of “best schools” purely on API scores, which may or may not be the best approach, the area you’ll be aiming at will include Williams Elementary as it has one of the highest scores in the state (though all elementary schools in Almaden have over 900 scoring), Bret Harte Middle and Leland High.  The next section of this post includes the maps for each of these schools.  If you are in the Williams area, it automatically continues on to Bret Harte and Leland (just remember my disclaimer, above, that if those schools are full they could, theoretically, send your student to the other nearby public schools in the district).

I. San Jose Unified School District Area Maps: maps of  each of these institutions’ coverage area

Pioneer High School – primarily the northwest part of Almaden, mostly west of Almaden Expressway

Leland High School – appears to be almost 50/50 on both sides of Almaden Expressway – includes some very nice areas east of Almaden Expressway such as the Shadowbrook area (maybe slightly more homes on the west side?)

Brett Harte Middle School – mostly southern part of Almaden

Castillero Middle School – largely northern and central Almaden

Graystone Elementary – most of the area east of Almaden Expressway as well as the far southern parts of Almaden

Los Alamitos Elementary – north central Almaden

Simonds Elementary – middle of Almaden

Williams Elementary – southwestern Almaden, 100% west of Almaden Expressway

II. Union School District & Campbell Union High School District Areas

Map for Guadalupe Elementary & Dartmouth Middle School areas – Map of Union School District with school boundaries shown. Please also see the Union School District “School Finder” online.

Leigh High School area map – much of this is a “free area” where students and their families can decide if they want to go to either Leigh or Branham – see bottom right corner of map.

III. Los Gatos Union School District & Los Gatos Saratoga Union High School District

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 3 – 6 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 as I shook them out for select West Valley Communities in the San Jose area with good schools (the first number is the average sales price per square foot, the second number is the average sales price):

The home prices tend to run with the school district API scores.  You can check the 2010 API scores in Santa Clara County for both the districts and the individual schools online here.        

As you can see, there’s quite a range of pricing for our model 4 bed, 2 bath home of about 2,000 square feet – it could run as low as about $560,000 on average (Cambrian with San Jose Unified Schools) to a high of about $1,455,500 in Palo Alto.

Please remember that these homes do not represent just the most fixed up homes in the most ideal locations, short sales, regular sales, bank owned homes etc. – it’s all types of houses, all types of sales, so average numbers.  So if you are a buyer who needs a “turnkey” home with everything remodeled or new in the best location, you might want to mentally add at least another 10% to 25% to this cost. (For example, in my experience, a really nicely remodeled home along these lines in Almaden with the best schools will run between $1 mil and $1,200,000 depending; in Los Gatos it’s about 15% – 20% more for a similar home.)

Here are a few areas in Santa Clara County which are well known for good schools:

Palo Alto Unified = 925 (includes elementary, middle and high schools)

Los Altos Elementary = 965 (includes elementary and middle schools only)
Mountain View – Los Altos Union (high schools) = 852

Saratoga Union Elementary = 965
Los Gatos Union = 921
Los Gatos – Saratoga Joint Union (high school district) = 898

Cupertino Union = 951
Fremont Union High School District (high schools serving Cupertino and nearby) = 875 (but 2 high schools are in the 9s)

Union School District (Cambrian & east Los Gatos) = 905
Cambrian School District = 878
Campbell Union High School District = 761 (highest scoring school is Leigh at 817)

San Jose Unified is enormous… In Almaden, Leland has very very high scores, as does Bret Harte Middle School, so those area are preferre (all of the elementary schools in Almaden are quite good).

But wait, there’s more!

These aren’t the only areas with great schools in Silicon Valley, of course.  West San Jose and Santa Clara have areas that share Cupertino Schools, for instance.  Monte Sereno is 99.5% in the Los Gatos School area (but there were no homes matching our outline in the last few months).  The Los Gatos Mountain communities such as Redwood Estates, Holy City, Aldercroft Heights and Chemeketa Park enjoy fabulous schools (Lakeside and Loma Prieta districts).  There are wonderful schools in the Silver Creek area of Evergreen, the Warm Springs and Mission Districts of Fremont, and the city of Pleasanton, to name a few.