Some first time home buyers in the San Jose or Silicon Valley area get confused by the “assessed property value” of houses, condos, or townhouses: they mistakenly think that this number has some bearing on the real estate market value.  It doesn’t.  The assessed value is used only for determining the amount of property tax being paid.

Residential real estate in California is reassessed upon transfer of title, or change of ownership, in most cases (there are some exemptions). From there, the assessed value can only go up 2% per year at most (thanks to the passage of Proposition 13 in the 1970s).  When property values decline, as they have recently, owners of properties with higher than market value assessments can appeal and get a temporary rollback in valuation for the purposes of having property taxes lowered.  This is very very common (and even so, the assessed value is usually still off as it’s based loosely on the January values of that year – the values are often higher than market value for these petitioned properties).  The tax assessor’s office has a lot of latitude in determining the assessed values; it is nothing at all like an appraisal, which should use strict comparisons.

Let’s look at a few hypothetical examples, taking tract housing with the same square footage, layout etc:

1 – If a couple purchased a Cambrian Park house in 1960 to 1970 and paid $20,000 for that property, but today’s value is approximately $500,000, the property tax being paid will reflect the long term ownership and won’t be based on the current market value.  That couple might be paying $600 to $800 per year in property taxes with a corresponding “assessed value” of about $52,000. (more…)

Sometimes the list price on a Silicon Valley home for sale isn’t at all what the listing agent or the seller is expecting in terms of a sales price.

Sometimes it’s closer to a lost leader – that is, it’s really only intended to get home buyers into the door. Lots of them. The idea is to create excitement, and hopefully a feeding frenzy with multiple offers.

Other times, of course, a house or condo in the San Jose area may be an overpriced listing. In those cases, it’s more like a “fishing expedition”. More like, “let’s see if anyone bites”. There are always a percentage of these on the market. When you see homes listed for 60, 90 or more days on the valley floor, most often the culprit is an inappropriately high price – and most buyers aren’t biting at that bait.

Right now, it’s a mixed market in Santa Clara County real estate. If you find a home you like, the next question is this: what’s it worth? And finally, what’s it worth to you? Many times, the best advice is to ignore the list price, if it’s a new home, and just do your homework on what the current competition is and what’s been selling.

You may find that the home you love is priced high, on the mark, a little low, or crazy low.

While it’s helpful to know what the average ratio is between list prices and sales price, that information can never substitute for market knowledge.  The most powerful figure to understand is the absorption rate or months of inventory (or days or weeks of inventory).  Six months of inventory is considered a balanced market.  The smaller the months of inventory is, the quicker the pace of the market, and the bigger a frenzy there is over good inventory. 
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What’s the Silicon Valley real estate market doing? Silicon Valley is composed of many micro markets, and they may all behave independently of one another, but we are seeing some general trends. First, there are now rising numbers of sales. This is the 2nd month in a row and it comes on the heels of 43 months of declining sales – so it is an extremely welcome turnaround.real estate report, is particularly weak.

The other main trend is declining prices – in most (but not all) of the San Jose area. Median prices for single family, resale homes are now down 8.7% from July countywide. Year over year, the median price for single family homes in Santa Clara County is down between 20-25% depending on the location, price point, and condition of the home, with notable exceptions in Palo Alto, Cupertino, Saratoga, and a few other high-end spots, plus the Santa Cruz Mountains. Sellers in most of Santa Clara County are hurting. The condo market in Santa Clara County, which can be viewed in detail online at my

There are lots of numbers and data points to pay attention to in analyzing the Silicon Valley or San Jose area real estate market, such as the average and median sales prices, the days on market, the absorption rate, and the number of sales. Let’s look at a key point, though, the median price for single family, resale homes in a few cities and towns in Silicon Valley, as compared to a year ago.http://popehandy.rereport.com/. And also, please find a 4 page pdf with more articles:
http://rereport.com/scc/print/MaryPopeHandySCC.pdf.

Campbell – up 4%
Cupertino – up 2%
Gilroy – down 37.3%
Los Altos – up 8.4%
Los Altos Hills – down .3%
Los Gatos – down 22.6%
Los Gatos Mountains – up 6.4%
Milpitas – down 17.4%
Monte Sereno – up 85.7% (but only 2 sales, so not enough data)
Morgan Hill – down 1.2%
Mountain View – down 18.7%
Palo Alto – down 10.2%
San Jose – down 25.3%
Santa Clara – down 21.6%
Saratoga – down 12.1%

Every market is good for someone. Right now, it’s good for buyers. Many continue to wait, but the trend may not be reversing as we see sales increasing. If that continues, it could swing things the other way (and we could be at the bottom of the market now).

More details can be researched for both houses and condominums or townhomes online here:

For detailed information on the Los Gatos Real Estate Market, please see my post on another site of mine, Live in Los Gatos: How’s The Los Gatos Real Estate Market Doing Now?

Please call or email me for a confidential meeting regarding your real estate needs and how the current market impacts you and your plans, and how to make the most of it at this time.

Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, RECS, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: “Get The Best Deal When Selling Your Home In Silicon Valley”
Keller Williams, Cupertino, CA (Silicon Valley)
877 397-5391 (Direct/Toll-Free/Fax); 408 204-7673 (Cell)
www.PopeHandy.com & www.ValleyOfHeartsDelight.com
emailto: Mary@PopeHandy.com
Blog: www.LiveInLosGatos.com