The luxury homes market often behaves very differently than the rest of the real estate market as a whole. If interest rates jump around, the impact is often far less since the home buyers of estate properties may not be nearly as dependent upon financing. Many of these fine homes & estates are paid for “all cash”. (In some cases they do this but later arrange financing, perhaps funding a “charitable remainder” trust rather than a more typical institutional loan.)
How’s the real estate market for high end homes in Los Gatos, Monte Sereno and the Los Gatos Mountain communities? Defining “luxury homes” is a bit tricky because what constitutes luxury can vary from area to area (check out these estate homes for sale in the Buffalo NY area). For now let’s use prices of $2 million or greater as we first look at the Months of Inventory or Absorption Rate – though in fairness, the luxury price point is a little lower in the mountains. (Six months is considered balanced by the National Association of Realtor, less is a sellers market and more is a buyers market.)
As of October 19, 2012, here are the numbers for homes over $2,000,000 in the Los Gatos area
Los Gatos, 95030 for sale (active) = 30 Sold in the last month = 1 Months of inventory = 30
Los Gatos, 95032 for sale (active) = 13 Sold in the last month = 3 Months of inventory = 4.33
LG Mtns, 95033 for sale (active) = 8 Sold in the last month =0 Months of inventory = infinite
Monte Sereno for sale (active) = 9 Sold in the last month = 1 Months of inventory = 9
For some reason, right now it seems to be easier to sell a luxury property in Los Gatos 95032 than in the more downtown area of 95032. That said, there are so few homes sold that things can fluctuate quite a bit, and also the over $2 million range is huge as some homes are offered at well past $10 million. For the absolute best information, you’d need someone to do a customized study for just your property, the one you own or the one you’d like to own.
No matter how you look at it, overall it is a buyers market in the luxury home strata in Monte Sereno, Los Gatos and the Los Gatos Mountains. It may be closed to balanced in 95032, or possibly a seller’s market even in that area, but we’d need to tease out things like school district (most of 95032 is in Union or Campbell schools, not Los Gatos schools), exact pricing tier, views, proximity to downtown etc. In general, though, it is a great time to purchase a high end house or estate in these areas.
Altos charts on the LG area
Next we’ll change gears and use Altos Research and quartiles to evaluate the most expensive listings. We will look at the top quartile of list prices, the high end listings in Los Gatos (zip codes 95030 and 95032 in town), in the Los Gatos Mountains (unincorporated, 95033) and Monte Sereno (99.9% of which is in 95030 but a tiny sliver has the 95032 zip code). The charts I’m using are live and will be continuously updated by Altos Research, to which I have a subscription.
List prices of homes for sale in the topmost price quartile in Los Gatos, Monte Sereno and the Los Gatos Mountains