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Does the exterior of a townhouse need to be inspected?

Does the exterior of a townhouse need to be inspected? View of townhomes in west Los Gatos.Does the exterior of a townhouse need to be inspected? If you are in the market to purchase a townhome, you may find that often the home and pest inspector are not including the outside areas such as the walls or roof. If you are preparing to sell your unit, you may be asked if you want to include or exclude the outer walls and features, or if you want a roof inspection done.

First, let’s consider why the inspectors may only inspect the interior of the home.

The reasoning frequently seems to be that the HOA will take care of whatever is on the outer walls or roof, so why bother? That assumption may or may not be accurate.

  • If the townhouse is held in condo ownership (as opposed to a PUD, in which homeowners own the outside walls, roof and the land under the unit), the HOA likely will take care of exterior damage.
  • If the townhome is a Planned Unit Development, or PUD, it’s much like a single family home: the homeowner will be responsible for repairs. (HOAs will repaint and reroof all units at the same time for both PUDs and condos, but not fix damaged siding, decks, roofs. It’s imperative to know which one you are buying, and you’ll only know that from  the preliminary title report. It’s also imperative to know what the HOA will do regarding repairs, and for that you’ll need to look through the lengthy HOA documents.)

Another consideration is the price of the inspection, which will be less – in most cases – if only the interior of the home is covered by the inspector.

Does the exterior of a townhouse need to be inspected even if it’s a condo?

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Almaden Valley Real Estate Market Conditions

Almaden View Real Estate Market Conditions San Jose 95120 - photo with Mt Umunhum in backgroundThe Almaden Valley real estate market is red hot with some slight cooling as we leave the peak spring market. There’s plenty of demand, and inventory remains well below the norm. All in all, Almaden Valley is in a continual, active seller’s market. Here are a few data points from the most recent update, which you will find in more detail below:

  • Closed sales took a dip, but so did active inventory.
  • The sales to list price ratio remains extraordinarily high at an average of 109.7% of asking.
  • Homes are selling at breakneck speed in an average of just over 1 week, only 8 days, on market.

Before we begin, it’s important to recognize how much has changed since March, 2020. Over time we will have a better grasp over the pandemic’s affect on the real estate market. For more on the impact of the pandemic on the market, check out my post titled Coronavirus impact on real estate sales.

A large part of the story is inventory levels. I pulled this data, below, on July 21, from the MLS. (Click on image to enlarge.)

Almaden Valley inventory - San Jose 95120

Almaden Valley Real Estate Market Conditions: Trends at a Glance

Next, a look at the residential real estate market statistics for Almaden, or San Jose 95120 from the Real Estate Report (a subscription that uses closed / sold data). Closed sales have fallen behind last month and remain well above last year. Pending sales grew month-over-month and are up year-over-year. Active inventory shrank since last month, diving below half of what it was a year ago. That small inventory is selling quickly, averaging a lightning fast 8 days on market, and with a sky-high sale to list price ratio of 109.7%. It’s a red hot seller’s market in Almaden Valley homes!

Please find the current statistics for single family homes (houses & duet homes) from my Almaden Valley real estate report (click on link for more info).

Trends At a Glance Jun 2021 Previous Month Year-over-Year
Median Price $2,200,000 (+10.0%) $2,000,000 $1,685,000 (+30.6%)
Average Price $2,200,630 (+8.7%) $2,025,120 $1,797,950 (+22.4%)
No. of Sales 45 (-8.2%) 49 32 (+40.6%)
Pending 51 (+4.1%) 49 42 (+21.4%)
Active 12 (-20.0%) 15 28 (-57.1%)
Sale vs. List Price 109.7% (-2.9%) 112.9% 101.1% (+8.4%)
Days on Market (+6.5%) 7 23 (-66.3%)
Days of Inventory (-15.8%) 9 25 (-69.5%)

 

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Cambrian months of inventory

Cambrian Park Plaza SignThe Cambrian area of San Jose is a very “hot market” overall, but it can be confusing to know how hot it really is, just like the rest of Santa Clara County, because there are multiple school districts – and schools are probably the number one driver of home values in this highly educated valley. Also, we know that in 2020 the market started off hotter than the year before but cooled down a lot in Spring due to the pandemic. As rules started to loosen again this spring, the market has started to heat up quite noticeably! The best homes are still the ones selling quickly and often with multiple-offers.

An explanation of “months of inventory”

What does “months of inventory” mean? This figure references how long it would take to sell a property if homes continued to sell and close at the current pace with no new inventory coming on the market. A good analogy is to consider a bathtub which drains. If you add no new water to the tub, how long will it take to empty out?

The months of inventory is sometimes called the absorption rate. The question is simple: how long will it take for the current inventory of homes for sale to get absorbed by the home buyers purchasing them? It doesn’t have to be calculated by months. It could be in days, weeks, or years. But months is probably most common.

The months of inventory for any part of the real estate market can vary, depending on many factors, including age of home, house size, lot size, and school district, whether or not there’s a pool, and many other things. It can be very useful to understand this metric when selling a Silicon Valley home. I’ve done market numbers crunching tied to the specific characteristics of a property (say, small yard with pool or big yard with no pool) to find the impact of those characteristics on the probability that a home will sell – or how fast.

The Cambrian area of San Jose’s months of inventory as a whole, and in one price point

Cambrian was once an enormous zone of the Santa Clara Valley. Today we mostly think of it as within San Jose in the 95124 and 95118 zip codes. Some of it it adjacent to Campbell – a very tiny sliver is IN Campbell (we’re only dealing with the San Jose portion in our charts), and a tinier still area is in San Jose and is under the Campbell School Union District. Most of this area is in one of three elementary school districts: Cambrian, Union, or San Jose Unified.

Here’s the breakdown – first, for ALL of Cambrian (MLS area 14 for my Realtor readers) that’s within the City of San Jose and second, by elementary school district. We will look at all prices for single family homes and then within a price range of $900K – $1.2M. The area for Campbell Elementary is so small that the numbers are usually not statistically useful (no offense to the Campbell school residents). It can just jump around too much to be helpful and often gives us no usable data. Often, as in this most recent batch, there are no homes available or sold from this area at all.

Please have a look – once again San Jose Unified holds the majority of the lower-price market! San Jose Unified also has the fastest turnover, both in the lower price point and across Cambrian overall. The Union School District holds a majority of the overall market, and all areas with sales are showing extremely low MOI!

Cambrian MOI July 2021

Homes are flying off the market, though it’s past the spring peak. A majority of sales and active inventory are coming from the Union Elementary School District. San Jose Unified in a close second place for sales overall with less than half the available inventory. Limiting analysis to the entry-level market, San Jose Unified is outstripping inventory and sales across the other school districts. On the other hand, the Cambrian Elementary District has fewer sales and active inventory, but is a very active market (currently the second fastest MOI overall) and is significantly hotter than it has been in the past few years. Inventory remains low and struggles to keep up with the high levels of demand fueling a hot seller’s market in San Jose’s Cambrian district.

Below we have past charts for comparison. I usually do this analysis a few times a year, and it is good to see the long view.

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Where are the high voltage power lines in Cupertino, Saratoga, Los Gatos, and Almaden Valley?

High Voltage Power Lines Collage

High Voltage Power Lines from around the West Valley.

“Location, Location, Location!” The most important element when buying or selling a home is the one thing you can’t change – it’s location. Because of that, you’ll need to know some location-specific things, naturally occurring and man-made. Like high voltage power lines.

What about this location?

If you own or are thinking of buying a home in Silicon Valley, here are a few location-specific things you want to know upfront so that you can make informed decisions:

  • where are the earthquake fault lines?
  • where are the geologic hazard zones, such as liquefaction areas?
  • where are the flood plains?
  • where are man-made things that will negatively or positively impact a home’s value? Things such as
    • train lines
    • freeways
    • electrical transmission
    • school district boundaries
    • zip code boundaries
    • proximity to entertainment venues

When looking at maps, sometimes these items show up and sometimes they don’t. Realtors and other real estate professionals in the San Jose area often use a Barclay’s Locaide and various online resources to locate the natural hazard areas. There are other tools to help locate school districts and zoning restrictions.

Google maps can help uncover some other areas, like distance to shops and freeways, but sometimes it raises more questions than it answers. For instance, a years ago a Realtor who didn’t know the Belwood of Los Gatos area too well phoned me to ask what a large object showing up on satellite view in the hills of Belgatos Park was. It is just a covered reservoir, but since it was not identified on the map it concerned some buyers. Local knowledge is still extremely helpful.

Mapping the Grid: High Voltage Power Lines

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The Monte Sereno Real Estate Market

The Monte Sereno real estate market is similar to Los Gatos, but distinct - Monte Sereno shares many features with Los Gatos but is a distinct cityHow is the Monte Sereno real estate market? Because the city is small, with just about 4,000 residents, there usually are few homes listed for sale or selling, and with small numbers we can get seeming volatility. This article is updated monthly with new data and analysis, so scroll down to read the latest and check back regularly. Here are a few details from the latest market update:

  • Monte Sereno is currently in a strong seller’s market with some signs of late spring cooling.
  • The average sale happened in 14 days and was accepted at 101.6% of list price.
  • Prolonged low inventory can’t keep up with demand, but may be aided by the new development around Austin Corners, Montalvo Oaks, which is starting to put lots on the market.

Though we’ve seen plenty of changes to the market since March 2020, we won’t know the full impact until it’s behind us. For now you can read more about the Coronavirus impact on real estate sales in my post on the topic.

Early on in the shutdown, the Multiple Listing Service (MLS) stopped the timer on all Days on Market (DOM). Therefore these numbers will be off beginning from March 17th through around May 17th, 2020. In the data below, this will affect any numbers related to the days on market, the absorption rate, and the days of inventory. So while current data is accurate, please disregard any DOM data for the dates mentioned above.

There are no condominiums or townhomes in Monte Sereno at present (although we are watching the development at La Rinconada closely). One of the major challenges for this city is to ensure that at least some housing units are deemed “affordable.” You can find the city’s housing plan here (a pdf online):  http://www.montesereno.org/DocumentCenter/Home/View/674

Below is a quick market profile for Monte Sereno. This is updated automatically weekly, so please check back often.

Monte Sereno Altos Real-Time Market Profile

As of the latest update, July 12th, Monte Sereno is in a strong seller’s market with elevated market action. Unlike other areas, this area didn’t experience the same cooling last spring as the rest of the valley, but continued to heat up through most of 2020. Winter of 2021 finally saw a cooling trend in this area. Still, Monte Sereno has very few active listings, so the data for this chart can have large swings in data due to one or two outstanding properties.

Altos Research does weekly reports, to which I subscribe. You can see the full weekly report for Monte Sereno HERE and you can click the subscribe button there if you’d like to get it weekly (or navigate to another zip code or city and subscribe to that). Here’s the data on home descriptions per price quartile in the report, updated automatically throughout the month:

Median List Price for Monte Sereno By Altos

Prices continue to climb in 2021. All tiers beat previous highs from the last two years, reaching prices that haven’t been seen since 2018. Like last year, this winter had only mild cooling with spring heating trends coming early. Remember, low inventory and fewer sales mean greater swings in data.

Stats for recently closed home sales in Monte Sereno

Here are the quick statistics for the closed sales in the last complete month to give a sense of how things are going with the Monte Sereno real estate market. Sales data comes from my Monte Sereno Real Estate Report. Given that the supply of homes to study is tiny, what can we tell from this data?

It’s true that an average Monte Sereno house is about $2.5-3.5 million, and often higher – a little steep for most folks!

Monte Sereno Real Estate Market Trends at a Glance:

This June has had some ups and downs. Small pools of data in this diverse market can shift the numbers very drastically very quickly, so it’s important to take this table with a grain of salt.

This month, data is based on only 4 closed sales, which is not uncommon in this community! The sale vs list price ratio fell to 101.6% of asking, and days on market sped to 14 days. Prices rose from the month before and are high compared to last year. Of course, last year’s data is based on just 6 sales and this month relies on only 4, so that swings is not particularly indicative of the real market value changes. Active inventory shrank once again, but isn’t far behind last year.

The Monte Sereno housing market continues to have steady activity and remains in a seller’s market with regular demand.

Trends At a Glance Jun 2021 Previous Month Year-over-Year
Median Price $4,265,000 (+10.8%) $3,850,000 $3,577,500 (+19.2%)
Average Price $4,179,740 (+1.9%) $4,101,500 $3,914,640 (+6.8%)
No. of Sales (-60.0%) 10 (-33.3%)
Pending (+100.0%) 3 (-14.3%)
Active (-18.2%) 11 10 (-10.0%)
Sale vs. List Price 101.6% (-6.2%) 108.3% 97.6% (+4.1%)
Days on Market 14 (-52.4%) 29 44 (-68.9%)
Days of Inventory 65 (+97.7%) 33 48 (+35.0%)

Because so few  houses sell per month, things like pricing can appear to jump around when that’s not actually the case. The Monte Sereno home prices tend to be a little higher but generally follow the Los Gatos trends, so it’s worth while to view this info also to get a more balanced sense of how things are for real estate in Monte Sereno. Also, for those considering buying or selling, it’s important to look at the actual listings for each and every sale with similar features, size, amenities to get a sense of your home’s particular subset of the market. Next, let’s look at the live charts from Altos to see how active listings reflect the market as seen from viewing sold listings.

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Santa Teresa real estate market

Silver Leaf Park in the Santa Teresa area of San Jose - the proximity of parks will impact the Santa Teresa real estate market for that neighborhood

Silver Leaf Park in the Santa Teresa area of San Jose

How’s the Santa Teresa real estate market? The scenic Santa Teresa area of San Jose is popular as it’s a bit more affordable but offers lovely views of the hills and public schools that seem to be improving over time, making the area more desirable. These positives seem to be helping that area to hold its value well. Here are a few details from the latest monthly market update for Santa Teresa single family homes (read the full analysis below):

  • It’s a hot late-spring market in Santa Teresa with significantly hotter trends compared to June 2020.
  • Available inventory can’t keep up with growing activity and increasing sales.
  • The average listing sold quickly in 17 days and at a whopping 110.6% of list price!

Santa Teresa (our MLS Area 2)  includes a small bit of the 95123 zip code, which is more expensive, but most of that zip code is Blossom Valley, so we will omit it. The 95138 zip code is about half Santa Teresa and half Evergreen (more expensive area), so take those numbers with a big grain of salt. I find the 95119 zip code to be most helpful, but even then, the school district is divided between Oak Grove and Morgan Hill.

Since the start of March 2020 there have been many changes affecting the real estate industry. We’re starting to have a better view of the impact of the pandemic on the local real estate markets, but it will take a while to get the full picture. For now, read more about the Coronavirus impact on real estate sales in my other post. Thinking of listing your home in this hot seller’s market? It’s a great time to do so if you are prepared! Read more about how to sell your home in 2021 through the linked article.

At the start of the lockdown, the Multiple Listing Service (MLS) temporarily stopped the timer on all Days on Market (DOM). Therefore these numbers will be off beginning from March 17th through around May 17th, 2020. In the data below, this will affect any numbers related to the days on market, the absorption rate, and the days of inventory for the previous months, though current data is accurate.

Weekly update from Altos Research with a “market profile” of San Jose’s Santa Teresa area, zip code 95119 for single family homes / houses:

Santa Teresa of San Jose 95119 Real-Time Market Profile

With this week’s update (July 12th) the chart shows some ups and downs. Six active listings isn’t much, but it’s not atypical for the area. Small pools of data can make trend tracking less accurate. Days on market are extraordinarily low, showing only 4 median days, and market action is stable and high. Altos has shown a strong seller’s market in Santa Teresa 95119 for a while.

Weekly update from Altos Research with look at a glance of zip code 95138 for single family homes or houses:

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City of Santa Clara real estate market

Santa Clara real estate market - The Santa Clara Women's Club http://www.santaclarawomansclub.org/

The Santa Clara Women’s Club (old adobe house)
http://www.santaclarawomansclub.org/

The realty market in the city of Santa Clara, like the rest of Silicon Valley, is one in which the sellers have the upper hand, though it continues to be impacted by the pandemic and lingering demand. What is key for home sellers is to price and prepare their home for sale according to today’s real estate market. This article contains the latest updated data and analysis. Here are a few points from the monthly single family housing market in the City of Santa Clara that you’ll find in more detail below:

  • The June sale to list price ratio is a red hot 110.2% of asking.
  • Sales remain well above last year and available inventory continues to decline.
  • The average home took only 10 days on market to sell.

Thinking of selling your Silicon Valley home in 2021? Follow the previous link to my article on how to effectively sell your property in these unique times. It’s a blazing hot seller’s market in most of the South Bay!

The Real Estate Market for the City of Santa Clara

March 2020 brought some major changes that are affecting the market. While we are seeing how some of those impacts have changed the market in recent month’s it will take a while to see the full picture. To read more about the Coronavirus impact on real estate sales, check my post on the topic.

At the start of the shutdown, the Multiple Listing Service (MLS) stopped the timer on all Days on Market (DOM). Therefore these numbers will be off beginning from March 17th through around May 17th, 2020. In the data below, this will affect any numbers related to the days on market, the absorption rate, and the days of inventory. That means the current data will be accurate, but disregard the data from March through May in those fields.

Below there are charts for the market activity over the last few months for single family  homes in Santa Clara. Market activity has been on the rise for months, and low inventory from the past year with continuous low inventory around the rest of the Valley means there is still a greater demand to fill than properties available. Further down in the article, we’ll check in on the condo market, too.

First, a market profile, automatically updated weekly, for the city of Santa Clara (these reports are available by zip code, too, and for condos/townhomes as well as single family dwellings). Check out the weekly Altos report HERE and click on subscribe to get weekly updates on all of Santa Clara or any particular zip code. (Scroll to the bottom and check out the profile of houses across 4 pricing quartiles – super interesting.)

Santa Clara Real-Time Market Profile

According to Altos, it’s a strong seller’s market right now with a stable, elevated market action, low days on market, and slight inventory growth.

Data from my Real Estate Report

Next, stats at a glance for the Santa Clara real estate market for single family homes. See the statistics and trends for closings and listings for last month – updated each month on about the 5th – 10th on my RE Report site for realty stats & trends in Santa Clara:

Trends at a Glance

Last year, 2020 began with a hotter than usual winter market getting progressively hotter towards spring. Things started to change after March and the market was hit with some significant cooling at the start of shelter-in-place. As the country has begun to open up and easing restrictions for realty sales, all that pent up demand has fired up the market!

This June was a busy month for Santa Clara’s housing market! Closed sales and available inventory fell from the month before, but pending sales shot up! Pending and closed sales are staying high above last year’s numbers, while active listings continue to fall short of the 2020 market. The sales to list price ratio rose to 110.2% of asking. For a little perspective, this number usually rises through spring, but in 2020 this ratio fell from a whopping 111.8% in March to a low of 100.3% by June. Homes are taking just 1.5 weeks to sell at an extremely quick 10 days turnover.

High demand and low inventory are fueling a hot market in Santa Clara, which is experiencing another red hot spring market in 2021!

Trends At a Glance Jun 2021 Previous Month Year-over-Year
Median Price $1,705,000 (+6.6%) $1,600,000 $1,400,000 (+21.8%)
Average Price $1,811,110 (+10.8%) $1,634,520 $1,469,300 (+23.3%)
No. of Sales 54 (-16.9%) 65 41 (+31.7%)
Pending 81 (+22.7%) 66 47 (+72.3%)
Active 28 (-17.6%) 34 42 (-33.3%)
Sale vs. List Price 110.2% (+0.7%) 109.4% 100.3% (+9.9%)
Days on Market 10 (-41.5%) 16 23 (-58.3%)
Days of Inventory 15 (-4.2%) 16 30 (-49.4%)

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