Gilroy is a scenic area well known for wineries, farmland and fruit stands. More than anything, it’s most iconic produce is garlic, which is celebrated late each July with the annual Garlic Festival, which began yesterday and continues through the weekend. If you’ve never been, I highly recommend it! Go early and bring your appetite! There’s more than just eating to be enjoyed, but eating is surely high up on the list of priorities! Click on the link above to see what’s on the schedule this weekend. (Be sure to wear sunscreen and a hat. It is very hot…so drink a lot of water…)
In the days and weeks leading up to this fun food festival, the scent of garlic fills the early morning air and blows north along the coastal foothills so that those of us in Silicon Valley get a healthy nose full when grabbing our morning paper off the driveway. This has been my experience since I was a small child and I’m happy that all the progress of the last 40 or 50 years hasn’t changed the smell of garlic heralding mid-summer.
Garlic is king in Gilroy, but it’s not all that’s happening there
A nice easy, and fairly fast trip by car will bring you to South County and to Gilroy. It’s a wonderful day trip to explore the backyard of Silicon Valley, or better, take a whole weekend to get to know the area. There’s a nice downtown area where you can do some shopping and dining. Go out a bit and there are a number of fabulous wineries to check out. And lest we forget, Gilroy is a local epicenter of bargain shopping.
At the intersection of highways 101 and 152, the Gilroy Premium Outlet Mall is found. Go with the intention of spending money, because resistance is futile once you park your car. This afternoon I spent a few hours there with my daughter and we found some especially good pricing on clothes – perhaps because of the Garlic Festival and the anticipated crowds.
Many will attest that cars are found for a better price there, too.
How’s the Cupertino real estate market?
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 charts from the mls which I created myself, plus my monthly reports from my REReport subscription and also from my weekly updated charts from Altos Research, which uses listing data (not solds) and is automatically updated this week. 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.
Charts from MLSListings.com
Cupertino has been in a buying frenzy for the last couple of years with a wildly hot seller’s market. Inventory is starting to rise again, which should (in theory, at least) cause some calming. In the chart below, which I created from MLSListings.com, please see the relationship between available homes and those which have sold. The closer these bars are to each other, the hotter the market, and when they begin to distance themselves, there’s a cooling in progress.
Next, a rough idea of pricing in this city – a view of listings by price range. This gives prospective buyers a sense of what it costs to buy here, and a sense for sellers as to whether their price point is mainstream or perhaps too high for the area (not too many in the over $3 million range).
Condominiums and townhouses in Santa Clara County have enjoyed rapid appreciation and almost perfectly steady improvement in the market in the last 18 months or so. Today we’ll take a snapshot view of it with a few graphs. First, let’s consider the average Days on Market (DOM) and the sale price to list price ratio for condos and townhouses in Santa Clara County.
The chart above shows some calming down in the Santa Clara County condo market. First, it appears that the sale price to list price ratio stopped its wild ascent and has reversed itself some in June 2013. But also, it seems that the days to sell leveled out (and stopped its decline). Just to check on the apparent trend, I went to MLSListings and ran the numbers for the closed sales just yesterday and today (July closings). The average sale price to list price was 106%, a tad lower than what we saw in June.
What about new inventory vs sold homes? In the chart below, we see that the gap between them widened in June: more inventory, fewer sales (of course the June sales were contracts ratified in May, in most cases). This also suggests a loosening in the condo market here. It’s not suddenly a buyer’s market, but perhaps we are seeing the beginning of a trend reversal? Have a look at the chart: Continue reading
Residential real estate prices in Santa Clara County rose in February 2013 by 34.5%. That’s the 5th month in a row that the median sales price has been higher than the year before by more than 20%. This is why we are saying it could be a bubble. The median price for single-family, re-sale homes is up 53% from the lowest part of the market, which happened n March 2009. Santa Clara County as a whole is still 21% below the peak which occurred in June 2007. That said, some areas area already back to peak pricing, including the hotbed areas of Cupertino, Sunnyvale, Mountain View and Palo Alto.
FEBRUARY SINGLE FAMILY HOME MARKET STATISTICS FOR SANTA CLARA COUNTY
Sales of single-family, re-sale homes were down 21.4% year-over-year (due to lack of inventory, not lack of interest by buyers). There were 585 homes sold last month in Santa Clara County. The median price for homes jumped 34.5% yea-rover- year. The median price has been higher than the year before for the past thirteen months. The sales price to list price ratio has been over 100% for the past twelve months. It was 103.8% for February 2013. That is the highest the ratio has been since April 2005.
The average price for homes was up 25.8% year-over-year. Pending home sales were down 33.5% yearover- year. That’s the fourth month in a row pending sales have been down, portending a slow first quarter in 2013.
Next let’s see the median and average home prices over time along with the number of sales. Note how sharply the number of sales is falling off while prices are rising. This is a factor of critically low inventory. Continue reading
Hearing the real estate market “war stories” about dozens of offers on Silicon Valley properties and overbids ranging from 20 – 55% has convinced me that this is a bubble. At least, this is what a bubble looks like, sounds like, feels like, and acts like. Maybe I’m wrong. Maybe it’s not a bubble. But would I buy property with these conditions? I don’t think so – it would depend on the home, the area, the price point and the level of interest it was generating. Overall, though, when the market is this hot, I get worried that emotions are running the show and common sense has been lost in the dust.
What do the numbers say? I just logged into MLSListings.com and see that right now, in all of Santa Clara County there are 760 single family homes (houses & duet homes) for sale which are truly available and not sale pending or under contract. In the last 30 days, 542 single family homes have sold. That’s 1.4 months of inventory – a red hot seller’s market. In San Mateo County it’s just slightly cooler with 426 for sale and 238 sold in the last 30 days, resulting in 1.8 months of inventory.
It is even worse in the lower price points. For houses/duets listed at $600,000 or less, in SCC the months of inventory is .64 or about 2 1/2 weeks (149 listed, 232 sold/closed in last 30 days). For SMC, it’s about the same, .69 of one month (67 listed now, 97 sold/closed in last 30 days). Less than a month of inventory – a balanced market is 5 or 6 months! Homes are selling faster than new ones are coming onto the market!
It’s one thing to say that one city, town, or school district has a very low months of inventory (or high absorption rate). It is another altogether to say an entire county is that low. This is a major trend, not a tiny blip in the statistics.
How soon we forget that after the outrageously deep seller’s market in 2000, we had a steep drop in 2001. Or that all the crazy buying in the San Jose area (and other places) in 2005-06 lead to the crash of 2007-2009. Continue reading
An extremely popular and consistently desired Los Gatos neighborhood is Blossom Manor, sometimes called The Manor or even Blossom Hill Manor, which is highly regarded for pleasant, curving streets, close proximity to shops and stores, and the prized Los Gatos Schools. Today I spent quite a bit of time on my multiple listing service website, MLSListings.com, to pull the numbers on this lovely area and see what the trends and appreciation look like. I was wondering how the numbers looked at the peak and the trough of the price rollback, whether or not the area has recovered or is close to peak pricing. For the most part, I looked at all of the houses included in the map area, but also took a secondary study of homes just between 2000 and 3000 sf, since some home buyers seek larger square footage.
Please click on the chart below for the historical statistics, by year, for the Blossom Manor neighborhood – it will open into a new window and become a little more than 50% larger. It reflects all homes sold, by year, in the Manor from 1998-2012 (averages, medians, as well as some minimum and maximum price info for each year combined). For this area, the peak of the market, meaning highest sales prices, was in 2007 but both 2006 and 2008 were very close generally, so it was a fairly broad peak. However, the same is not true for the bottom of the market for this same group. Instead, there was one very clear low year – 2009. After that, we see a recovery underway.
Something interesting to note is the increasing size of the houses. The first four years (1998-2001), the average square footage of homes sold was 1778. The most recent 4 years, it’s 2105, a 327 square foot difference, or 18% more than about 11-15 years ago. We see a lot of remodeling and additions, so this is in keeping with what locals would expect – and it’s a trend that is likely to continue. Why does this matter? Upside potential for expansion.
What about homes that are already larger, only those between 2000 and 3000 SF? (There are only a few bigger than 3000 SF in this neighborhood.) Continue reading
A common buyer question right now is whether or not the real estate market in Silicon Valley is overheated, if we are experiencing “another bubble”. If you visit open houses in places like Sunnyvale, Cupertino, and in many parts of the Peninsula, you may see droves of buyers and be convinced that the market is, in fact, overheated.
Silicon Valley encompasses a large area, primarily Santa Clara County and some of San Mateo County, but a few sections of neighboring counties as well. Generalizing about huge regions is tricky. Overall, though, it is a deep seller’s market throughout Silicon Valley. But there is a great deal of variation from one city or town to the next, as well as between ages of homes, quality of schools and neighborhoods, and price point. Today we will focus primarily on a couple of statistics: the ratio of sales price to list price for houses in San Mateo and Santa Clara Counties, and ratio of new listings to sold and closed ones of houses in these counties.
First, though, a look at the two counties combined to show the broadest common real estate trends for Silicon Valley in relation to the sales price to list price ratio and “days to sell”.
The chart above gives a snapshot of the Silicon Valley market, which appears to have had a peak in about October – November 2012. likely reflecting sales 45-60 days earlier, when the days to sell hit a yearlong low. Since that time, though, things appear to have calmed down.
New listings of houses for sale versus sold homes in San Mateo and Santa Clara Counties
A few days ago, before getting the stats for closed sales in January 2013, I wrote about the trends for new listings of houses in relation to the closed sales in Santa Clara County in late fall 2012. What we were seeing was that homes in escrow were closing or finalizing the sales faster than new inventory was coming on the market. The closings in January, though,reflecting sales which began in December, a trend reversal, back to a more normal ratio, in both Santa Clara County and San Mateo County. December is often the softest month of the year, with few listings relative to the rest of the year and sales at lower price points. Looks like this December followed that pattern to a point. Have a look at the charts for both counties and notice the trend reversal, below.