Next week I’ll be putting a Willow Glen house on the market so have been paying attention to the trends & statistics for this charming part of San Jose.  Here’s a look at the absorption rate for Willow Glen houses and duet homes (numbers run yesterday) by price band.

Willow Glen Months of Inventory June 17 2010

My Real Estate Report provides numbers (which I don’t have to crunch!) on a monthly basis for all of Santa Clara County, including the Willow Glen (area 10, mostly 95125) part of San Jose.  It’s a good, broad view of the Willow Glen market overall.  Here’s the summary for the  May 2010 Real Estate Report for Willow Glen – June’s info will be out sometime in early July. Click on the link to get all the data rather than just this quick view.

The Willow Glen real estate market trends are up month over month for the median & average sales prices, but the average sales price is still down year over year.  Pendings are down compared to April (possibly a reaction to the federal home buyer tax credit?) and year over year.  The list price to sales price ratio is up, though, and the days on market are shorter.

Looking at both sets of numbers, mine and the REReport’s, it is clear that the homes priced up to about $900,000 are the ones leading the recovery, and that the most expensive homes are not selling well at all.  When we began to see improvement in the market, it was first entry level houses that were selling well.  Eventually it spread to the move-up market, both here and throughout Silicon Valley.  Will it continue?  The very high end homes in Santa Clara County are selling much better than they were a year ago, but as you can see, there’s still loads of room for improvement for the luxury homes market.

In Almaden Valley, like in other parts of San Jose and Silicon Valley, some parts of “the market” are hotter than  others.  The real estate sweet spot appears to be homes priced in either the entry level or move-up markets – but things cool considerably as the homes become more elegant, grand and luxurious.  (This appears to be true across all of Santa Clara County: the most affordable homes are still the hottest segment of the realty market.)

Months of Inventory in Almaden Valley

Here’s how the current inventory and sales breaks down, together with the months of inventory, for the Almaden Valley part of San Jose (95120 zip code). Info from MLS Listings deemed accurate but not guaranteed. The “closed” column represents homes closed (houses & duet homes) in the last month.

As you can see, up to about $1,200,000 it’s a very strong seller’s market with less than 2 months of inventory. But beyond that price point, it’s suddenly a completely different market and is instead a very strong buyer’s market.

What about distressed property sales in Almaden?

There are almost no bank owned properties currently for sale or recently closed in Almaden – just 1 in the entry level price band which is currently listed for sale.

There are not many short sales in Almaden: right now just 5 for sale: 3 in the lowest of these five price groups, 1 in the 2nd lowest and one in the highest. Closings among short sales are also few in number: 2 in the lowest price point and one in the second lowest.  The absorption rate or months of inventory among short sales was 1.5 in the lowest price point and 1 month in the second lowest. No closings among higher priced homes that were also short sales in the last month.
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In many parts of the U.S., buyer broker agreements are normally used between home buyers and their real estate agents, much like listing agreements are used between sellers and theirs. It’s not so common in Silicon Valley, though. Often home buyers are a little spooked at the prospect of signing a contract for buyer representation & compensation.

My Realtor colleague and blogosphere friend, Elizabeth Weintraub, has a great article on this topic on About.com,  Buyer’s Broker Agreements & Buyer’s Broker Contracts, in which she explains the various types of buyer contracts and agreements which are commonly found around the country. The one which is used the most, if one is used at all, is the “exclusive representation” (which again is similar to a listing agreement, which is also usually an “exclusive representation agreement”).

Why would anyone want to use a buyer contract?  Whether you’re the consumer or the agent, the answer is pretty much the same: to have options. In my real estate practice, I do not request nor require a buyer contract as long as my buyer client is willing to purchase something from the selection available on the multiple listing service (MLS).  If that isn’t enough, though, then we chat about the buyer’s options.
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Cambrian Park is a district of San Jose which borders Los Gatos, Campbell, Almaden Valley and Willow Glen (the last two are also part of the city of San Jose).  It’s got a population of about 77,000 between the two main zip codes, 95214 (about 45,000) and 95118 (about 32,000 residents).  (There’s also a little sliver of 95008, but most of that area is covered by Campbell.) The 95124 area tends to be a little more expensive and a ittle less densely populated (7075 people per square mile in 95124 vs 7595 per sq. mile in 95118).

How’s the Cambrian real estate market?  Right now, it is a strong seller’s market.  This doesn’t mean that all homes are selling or that prices have returned to their peak, but in general, homes are selling briskly, much faster than a few months ago. As you can see from the Altos chart below, the average “days on market” has been falling over the last 90 days.  It is interesting to note that in the last 90 days, the more expensive area of Cambrian (95124) is selling a bit better than the more affordable.  This is a switch from the not so distant past, as you will see in the chart following this first one. (Charts below from Altos Research, to which I have a subscription.)

Average Days on Market for Cambrian Park homes for sale(San Jose zip codes 95124 and 95118)

We can look back further and see that the market does seem to have changed in recent months from the trends of the last few years. The longer time frame below also visually accentuates the change in the DOM. (Please note that from about 2007 to 2008 the 95118 area was selling faster – then the two areas were in a dead heat – and now 95124 is selling quicker.)

Average Days on Market for Cambrian Park, San Jose houses over last 3 years

Cambrian home buyers will tell you that homes are selling a lot faster than they used to, but also that prices are rising, especially among entry level priced homes. It is getting harder and harder, especially for first time home buyers, to get their foot in the door in Cambrian.

Cambrian Park, San Jose (95124, 95118) average list prices last 90 days

For those actively involved in the Cambrian Park real estate market, it’s no surprise that the sellers are now in the stronger position – especially if their homes are in good shape and well priced.

Perhaps the very best tool for understanding the realty market, though, is not a chart showing pricing or inventory or sales, but rather is the  absorption rate. This number factors the available homes or inventory to those which have closed in a recent period of time (it can be by days, weeks or months).

Next we’ll focus on the Cambrian absorption rate, particularly the “months of inventory“.  According to the National Association of Realtors, 6 months of inventory is a balanced market, less is a seller’s market and more is a buyer’s market. Today I ran the numbers from MLSListings.com using the sales recorded in the last 30 days to bring you current info on the Cambrian market and those are the figures we’ll use next. (“Sold” refers to homes which have closed escrow.)

For our MLS area 14, which corresponds to Cambrian Park, right now there are a mere 2 months of inventory for houses & duet homes.  By itself, this means that it’s a strong seller’s market in Cambrian.  That doesn’t tell the whole story, though.  If we break it down to “type of sale” (regular, short sale, bank owned) we get even better information. Here’s how these categories line up for the absorption rates or months of inventory:

As you can see, it’s twice as hard to get a “short sale listing” sold vs a regular sale type of property in Cambrian – regular sales are at 1.9 months of inventory while short sales are 3.8 months.  But the hottest segment of the market is bank owned homes, which are flying off the market (thanks to their bargain basement prices) at 1.1 months of inventory.

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Sereno Group Real Estate just released its annual real estate market trends report for Santa Clara County, San Mateo County and Santa Cruz County.(The link will take you to a pdf of the report, which is a 1.6 MB file so allow a little time for downloading.)

The study covers nearly two years in these three Bay Area Counties: January 2008 to December 2009.

The report is free and does not require registration to be viewed.

We hope that you find the report informative and helpful.

The statistics are in for the residential real estate sales in April 2010 across Santa Clara County and things continue to look up; once again there are more pending sales than homes available on the market – this is a sign that buyers are purchasing homes at a good clip relative to the rate at which new listings are coming on the market.  This is a great indicator or baromoter of the strength of the Santa Clara County real estate market.  Here are the county numbers for houses (and duet homes):

For condominiums and townhouses, the trend is also quite strong: 

Whether you’re interested in the  real estate market for San Jose, Los Gatos, Almaden Valley, Cambrian Park or any other part of Silicon Valley, we have you covered with the Santa Clara County Real Estate Report.

April 30, 2010 was the deadline for the federal  home buyer’s credit – if someone wanted to take advantage of it, he or she had to be “in contract” on residential real estate by the end of April.

Did it create a buying frenzy in Silicon Valley?

Not really. The numbers across Santa Clara County were very similar in April as they were in March. In March it was 946 closed houses & duet homes and 325 condos and townhomes. In April we saw 932 and 291. Cumulatively, it was down a little from March. And generally that’s what it seemed like, too, in the trenches: just slightly cooler.

Here’s a look at the numbers* with some historical perspective going back to 1998.  I ran these numbers myself on MLSListings.com and have made every effort for accuracy (but cannot guarantee it).  Our MLS will come out with official stats in a few more days – until then, consider this a “sneak peek” care of Mary Pope-Handy:

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