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 and dining 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:
My Cambrian area of San Jose Real Estate Report was recently published with the updated numbers from the closed sales last month for this part of San Jose (95124 and 95118 with a little of 95008 too). Please click on the link above to see much more information there. Those charts are below.
First, though, I want to share some info that I pulled from the MLS last night. It does appear that Cambrian home prices have come down quite a bit since the peak of pricing in March. For home sellers wondering why their properties aren’t selling as quickly, this may be helpful. Also it’s good info for those thinking of selling their houses or condos in this second half of 2018.
The very best way to know what the market is doing is to track the same house as it sells and re-sells. However, most home owners don’t move often, so that is not helpful to us. The next best method is to find very similar properties and track them. That would be such as all condos in a large development with approximately the same floor plan / size.
Cambrian often mimics the valley as a whole pretty well, so I thought I would pull up a representative sample from a hot segment of the market to get my own sense of how things are going. I pulled starter homes with Campbell Union High School District, zip code 95124, with 1000 – 1500 SF, 3-4 bedrooms and 2+ baths.
Here are the averages from March to today (updated Sept 7, 2018):
March 2018 (10 sales) average price per SF $1,100.53 average sale price $1,429,612
April 2018 (15 sales) average price per SF $1,138.75 average sale price $1,417,000
May 2018 (14 sales) average price per SF $1,076.54 average sale price $1,375,643
June 2018 (10 sales) average price per SF $980.64 average sale price $1,258,550 (steepest drop from the month before)
July 2018 (12 sales) average price per SF $974.35 average sale price $1,232,958
August 2018 (9 sales) average price per SF $899.29 average sale price $1,176,522
That is a drop in the average sale price of $253,090 over 5 months for this group, or about $50,618 per month on average (though some months it is more or less). The data here uses a fairly small pool, so it may not be accurate for all parts of Cambrian, but it is an indicator of what the market is doing overall since this is a very in-demand segment of Cambrian.
If we input this into excel and ask it to generate a forecast through December (which assumes the same rate of change, which may NOT be true), it looks like this – sellers please note, THIS IS WHAT BUYERS ARE THINKING AS THEY WAIT TO BID:
When I plunked the data into excel, it gave a range of possible values…and of course the actual range is myriad! Where do YOU think these values will be with December’s closings (revealed in January)? As low as $871k? As high as $1 million?
Now I need to remind everyone that the market is often not a straight line. Let’s stop and take a look at the county’s sales (average and median prices) to get a sense of that. Although the general trend for the last few years has been upward, please see that there are MANY drops, particularly in the second half of each year.
As is evident, seasonally, the market does often flatten or decline somewhat in the second half of each year. The peak is most often in spring sometime. Very often, the peak is in March (again, that means sales the month before, which is February, and that means getting your house all ready in January). So let’s say that the market does drop at the current rate, in January 2019, this hypothetical Cambrian home would be selling at about $886,000, prior to the possible spring surge in pricing. To get the lowest price means buying in December, not buying in January, most likely. But – December also typically has the lowest inventory, so not much selection. For that reason, if you like a home now, I would suggest buying that home now. Buying a home for yourself and your family is not like buying a stock. You are going to live in it, so you will want to like it. I have seen many buyers try to time the market and end up going through December since they hated what was available, and then they got caught buying in the spring madness, and they paid more.
But who knows if prices will rebound in early 2019 or not. Who knows if prices will continue dropping this year. Some years, we have seen drops followed by rapid appreciation. Last year, prices rose through December, confusing everyone. This could be the beginning of a correction, or it could be a seasonal cool down – a gift for wearing Cambrian home buyers.
If it’s the beginning of a correction, buying now does not make sense unless you plan to be in your home for 10 years or so. If it is a seasonal experience, or a blip, then buying this fall is a good idea, since the new year is very likely to see prices move back up.
Which is it? I do not know for sure. The CEO of my company thinks that prices will trail off for the rest of this year, and then return to their upward march in the spring of 2019 (think Feb – April). When I see the hiring, the Google expansion, I know that people have to live somewhere. It may be a standoff between sellers and buyers on price. My usual advice is simple: if you are ready to get on with your life, and you’re going to stay there 5 or 10 years, buying now most likely makes sense.
Cambrian single family homes trends at a glance – numbers from the RE Report
Sales and turnover are fast and steady, and the sales to list price has remained high, over 110% for many months now. Prices have been slipping fairly steadily since March / April. Usually I only show this month and the one before, but I’ll display 3 months’ of data this time so it’s more clear. Interesting, though, that the sale price to list price ratio is still so high. These numbers reflect all of MLS “area 14”, which includes virtually all of 95124 (some of that is Willow Glen) and 95118 (some of that is Blossom Valley) and a sliver of 95008.
Most of Cambrian did not get the same appreciation as our hottest segment, above, so the general area stats will be a bit different.
Trends at a Glance
|Trends At a Glance||Aug 2018||Previous Month||Year-over-Year|
|Median Price||$1,297,500 (+3.0%)||$1,260,000||$1,152,000 (+12.6%)|
|Average Price||$1,315,560 (+0.3%)||$1,311,880||$1,182,770 (+11.2%)|
|No. of Sales||52 (-8.8%)||57||75 (-30.7%)|
|Pending||50 (-3.8%)||52||47 (+6.4%)|
|Active||75 (+7.1%)||70||25 (+200.0%)|
|Sale vs. List Price||103.4% (-1.6%)||105.1%||108.2% (-4.5%)|
|Days on Market||26 (+52.7%)||17||12 (+117.1%)|
|Days of Inventory||43 (+17.4%)||37||10 (+332.7%)|
And the month before:
|Trends At a Glance||Jul 2018||Previous Month||Year-over-Year|
|Median Price||$1,260,000 (-4.0%)||$1,312,500||$1,140,000 (+10.5%)|
|Average Price||$1,311,880 (-5.3%)||$1,385,810||$1,178,450 (+11.3%)|
|No. of Sales||57 (-1.7%)||58||77 (-26.0%)|
|Pending||52 (0.0%)||52||61 (-14.8%)|
|Active||70 (+42.9%)||49||22 (+218.2%)|
|Sale vs. List Price||105.1% (-5.5%)||111.2%||107.9% (-2.6%)|
|Days on Market||17 (+39.4%)||12||19 (-11.0%)|
|Days of Inventory||37 (+50.4%)||25||9 (+329.8%)|
Willow Glen is perhaps the most charming residential area of the city of San Jose with its old style architecture, tree lined streets and quaint downtown area on Lincoln Avenue and nearby. For folks working in downtown San Jose, the Willow Glen area (roughly the same as 95125 zip code, though a bit of 95124 is included also) is extremely convenient.
The real estate market in Willow Glen is declining slightly from the peaks earlier this year, but values are up year over year, just like the most of the valley. My sense is that this is a seasonal fluctuation combined with “buyer fatigue”. Last year, the housing market did not follow the regular pattern – but this year, perhaps we are settling back into exactly that.
Click for the complete Willow Glen real estate report with all of the numbers, stats and trends from the closed sales of houses for last month. Further down in this article you’ll find the Altos Research charts as well.
Willow Glen Market Trends
|Trends At a Glance||Aug 2018||Previous Month||Year-over-Year|
|Median Price||$1,435,000 (-1.9%)||$1,462,500||$1,391,000 (+3.2%)|
|Average Price||$1,560,210 (+3.0%)||$1,515,270||$1,486,540 (+5.0%)|
|No. of Sales||40 (-13.0%)||46||55 (-27.3%)|
|Pending||49 (+6.5%)||46||54 (-9.3%)|
|Active||58 (-17.1%)||70||27 (+114.8%)|
|Sale vs. List Price||103.5% (0.0%)||103.5%||104.1% (-0.6%)|
|Days on Market||23 (+47.3%)||15||22 (+1.3%)|
|Days of Inventory||44 (-4.7%)||46||15 (+195.4%)|
And the month before:
|Trends At a Glance||Jul 2018||Previous Month||Year-over-Year|
|Median Price||$1,462,500 (-0.1%)||$1,464,500||$1,309,380 (+11.7%)|
|Average Price||$1,515,270 (-3.2%)||$1,565,640||$1,391,670 (+8.9%)|
|No. of Sales||46 (-14.8%)||54||50 (-8.0%)|
|Pending||46 (0.0%)||46||46 (0.0%)|
|Active||70 (+22.8%)||57||39 (+79.5%)|
|Sale vs. List Price||103.5% (-1.4%)||105.0%||102.8% (+0.7%)|
|Days on Market||15 (+6.9%)||14||20 (-22.3%)|
|Days of Inventory||46 (+49.1%)||31||23 (+95.1%)|
And next, of Willow Glen condos:
Cambrian Park, or more broadly, Cambrian, is a west San Jose neighborhood or district and is one of the more affordable, high-value areas in Silicon Valley. The schools are good, the crime is low, and the commute is not too bad. For people relocating to Santa Clara County, this is a place to know about since quality education and affordability are often high priorities! Most Silicon Valley home buyers would say that Cambrian Park real estate offers a very good value.
What’s the compromise for the more reasonable prices of homes for sale? Well, Cambrian doesn’t have an interesting, upscale downtown area like Campbell, Los Gatos, Saratoga, or Willow Glen.
But it does have tons of shopping & restaurants and even a Farmer’s Market. It also enjoys a top notch hospital (Good Samaritan) and plenty of parks as well as a fantastic rec center with a large park adjacent to it, the Camden Community Center, which has tons of programs (including an after school program for youth), classes, and a fabulous pool. (My family and I lived in Cambrian in the “Cambrian Gardens” neighborhood for 10 years and loved it – our kids made great use of the community center too.)
Altogether, there are about 75,000 to 80,000 residents in Cambrian, spread throughout the three zip codes of 95124, 95118 and a little tiny bit of 95008.
If there is a “central Cambrian Park”, it would have to be near the original Cambrian Park Shopping Center, which was the first actual mall in San Jose! That area is sometimes known as Cambrian Village. People sometimes use the three names interchangeably: Cambrian, Cambrian Park, Cambrian Village.:
Where is Cambrian Park? Map of approximate Cambrian Boundaries:
View Cambrian Area of San Jose in a larger map
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.
Home seller temptation # 1: overconfidence on the market
Because folks read about the dozens of offers on some homes, by extension, it’s easy to believe that every home sells, for top dollar, with no effort or planning on the part of the seller. This is a huge mistake. Perhaps we should even call it a myth since it may be commonly believed.
In today’s wildly hot market, there are still some homes that DO NOT SELL.
What are the odds that your home won’t sell?
I just pulled some numbers from the MLS today, July 23, 2018. You may find them surprising!
- In Santa Clara County, there are currently 1274 single family homes on the market
- 490 of them have been on the market at least 30 days – 38% are not moving quickly & likely need a price reduction, if it hasn’t already been done
- 211 of the 1274 have been for sale for at least 60 days – 17% have had 2 months worth of open houses, keeping the home spotless, etc.
- 107 of the 1274 have a “days on market” of 90 days or more – 8% have serious market rejection
- These are not all luxury homes!
- 9 are listed at under $1 million
- 13 are offered between $1 million and $1,499,999 (“normal” houses in our area)
- 9 are on the market between $1.5 mil and $1,999,999
- 14 are listed at $2 million to $2,499,999 (these are still not luxury homes in most cases)
- 11 are priced between $2.5 mil and $2,999,999
- That’s 56 homes of 107 that are under $3 million. The balance are “high end homes”, which usually are more challenging to sell
The best homes, those which are well priced, well marketed, and are easily shown, sell within 2-3 weeks. After that, home buyers view them as stale listings and assume something terrible is wrong with them. After three weeks, unless the home gets a deep price reduction, it’s unlikely to get multiple offers.
This first temptation is the greatest one, and it often leads to mistakes in areas #2 and #3, listed below. Continue reading
The idea of buying a home, especially a first one, is both exhilarating and overwhelming. Where do you begin if you want to buy a home in 2018? If you want to purchase real estate in Silicon Valley before the year is over, you’ll need to get a number of things in order, including hiring professionals to help you.
Purchasing now, in this multiple offer market requires strong credit, a healthy down payment with set aside for reserves and improvements after closing, time and energy, and no small amount of courage. Looking halfheartedly means you will see properties, but not buy. After the down payment, probably the most important element you’ll need to have is commitment, and further, you’ll need a strong team of professionals to assist you. Let’s talk about a solid home buying strategy. Continue reading
When it’s a hot seller’s market, like it is right now in Silicon Valley, it is challenging to be a home buyer. That means it’s also hard to be a buyer’s agent, since it may require writing many, many offers (and a lot of time and energy) before the clients get into contract. Since Realtors are usually only paid when a property closes, that means it’s not too hard to go broke if a real estate professional focuses a lot of time with buyers. In other words, in a market like this, most agents would prefer to work with sellers rather than buyers, because it’s more likely that they’ll make a living.
What can you do to increase the odds of finding a great Realtor who will take you seriously, work with you and for you, and give it a good effort even if it’s an uphill battle? First, let’s understand what a real estate licensee is looking for a client – at least in most cases. Usually, the savvy agent doesn’t want to waste time with people who are not serious, not ready, or who will not be loyal. The smart Realtor knows that without these three things, it’s unlikely that they will be able to sell that person a home, or at least not in a reasonable period of time.
Serious home buyers:
Only about half of all home buyers will likely buy in the year they think they might, so it’s important for real estate professionals to try to make sure that they don’t spend months on someone only to have him or her remain permanent renters. The agent must qualify the client to make sure it’s worth the risk of spending time with him or her.
Clues that the buyer isn’t serious include these:
(1) Comments like “I may have to look at homes for a year or two” or “I may need to write a hundred offers to get the right deal” or “I’m in no rush” indicate that this isn’t a big priority for the buyer (so maybe it shouldn’t be for the agent, either). This buyer is able, ready and probably also loyal – but not serious. Some, though, will clarify with a time frame and this is a game changer. “My lease is up in July, so ideally, I’d like to get into contract in March, close in April and move in May. But if I find the right house sooner, I’ll buy sooner.” That works!
(2) If there are two decision makers, having only one do most of the house hunting and the other showing up at distant intervals often indicates that it’s a priority for one but not both. Sometimes that’s not the case, but it is a red flag. Both need to be serious. Continue reading
How are the key housing indicators in the Almaden Valley area of San Jose? At the moment it’s said to be a hot “seller’s market” overall. But look closer and you can see that in the Almaden Valley housing market there are clear market micro-climates. Prices are better for sellers, while buyers struggle with higher prices and less homes to choose from. Recently we have seen a slight cooling, too – very welcome for Almaden home buyers.
Almaden Valley Housing Market: Inventory of Houses for Sale
Right now I have a few Almaden Valley home buyers and they have all been disappointed at the lack of inventory. What’s happening?
First, let’s see what “usually” happens in the 95120 zip code in terms of the number of houses for sale. Here’s a look at the last 10 years (all available history), care of Altos Research – you can see that it’s been rising since January 1st, but it’s a proverbial drop in the bucket:
Here you can see that inventory has regular peaks and dips. Inventory tends to rise early each year and peak in mid to late summer. After the peak is a decline through autumn and winter with the lowest point in the coldest part of the year before turning around again before spring.
Now let’s look up close at just the last 3 years. Again, inventory IS rising, so it’s betting a little easier for buyers, but still difficult compared to the last 3 years.
As usual, our inventory bottoms out in winter and then rises beginning sometime after the Super Bowl or perhaps a little later. Right now we are still in “rising inventory” mode in Almaden, so the market should be softening a little. Also, we are hearing of “buyer fatigue”, so in many cases there may be fewer offers than earlier in the spring. Continue reading
Buying a home in Silicon Valley is seldom easy, but right now, it’s nearly impossible with Santa Clara County’s critically low housing inventory. With slightly rising interest rates getting folks off the fence and strong job growth in the San Jose area – especially since Google announced its expansion in downtown, there are many more home buyers than home sellers. While this isn’t unusual, the severity of the problem certainly is extreme. How bad is it? Here’s a visual cue dating from January 2001 to March 2018 which indicates that this month’s inventory of single family homes for sale in Santa Clara County is the lowest we’ve had for March since 2001 (that’s as far back as I can get the data from MLS Listings). I’ve been selling homes for 25 years and have never seen it so dire.
This is sort of like “inventory limbo” – how low can you go? To me, this is uncharted territory for our region.
I am really wondering if other cities around the world have had this kind of inventory crisis in the past, and if so, what happened to pull them out of it. Obviously, we need more inventory, and that will mean either more new construction, incentives for current owners to sell, an easier way for people to commute long distances to work, or some combination of the three.
How does this impact you?
Many long time residents may recall that we have had a shortage for a few years here. In January 2012, I wrote about it here: Why is it so hard to buy Silicon Valley real estate right now? Compared to the recession that had just ended, inventory was low – I can look back now and think “wow, we had no right to complain! We had a lot more inventory then as we do now!” What also happened is that with the restricted inventory, home prices rose. A lot.
If you are a renter and want to be a home buyer, you now have two things going against you: rising interest rates and rising home prices (due to strong demand and critically low supply of homes to buy). If you wait a year, there’s a good chance that you will lose quite a lot of buying power as interest rates continue to go up and home prices do, too. Please check out my article on rates: How will rising interest rates impact your home buying power? Super low inventories tend to cause rapid price appreciation, and if you aren’t careful you could be priced out of the market (either because of home prices or because of those rising interest rates).
Normally, I’d be saying “take heart, buyers, inventory usually starts to rise after the SuperBowl” or “inventory rises after Valentine’s Day” or “we’ll see more homes coming on the market in March”. Well, it just hasn’t happened to any kind of significant degree.
If you are a seller, this is great news for you as it’s very likely that your equity will be increasing with the tight inventory. Buyer demand is good and interest rates are still very tolerable. It is hard if you want to sell and buy something else, but if you are down-sizing, you may be able to capitalize by purchasing all cash.
If you are a buyer, it’s important to realize that these days, most homes are selling with no contingencies of any kind (loan, appraisal, inspection). Purchasing a condo, townhome, or house is not for the faint of heart! Being not just pre-approved, but having an underwriter’s approval subject only to the ratified contract, a preliminary title report, and a satisfactory appraisal will put you into a better position. Cash is king, of course, so being able to absorb any appraisal shortfall is crucial. However, don’t let the all cash buyers scare you as some of them over estimate the value of cash. Most sellers will wait a few extra days if it means making more money on the sale.