Condos & Townhomes
Condos & Townhomes in Silicon Valley
How is the Campbell real estate market? Campbell is still in a strong seller’s market, but like the rest of the county, has been in a period of cooling these past few months.
It’s hard to predict what’s coming up next with all that’s happened since March. The charts are beginning to show the impact of the pandemic on the market, but it will take a while to see the full picture. To read more about the Coronavirus impact on real estate sales, check my blog post on the topic.
During the shutdown so far, 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. In the data below, this will affect any numbers related to the days on market, the absorption rate, and the days of inventory in previous months, though June numbers are now accurate.
If you’re selling, perhaps last summer you’d have gotten 4 – 6 offers on your well prepared, beautifully staged, and aggressively priced home for sale. Recently, we’ve started to see those numbers again as restrictions on the market ease. However, we are still seeing buyers bring in offers with normal contingencies, particularly if there are not any competing bids. With the restrictions on showings and real estate in general, these numbers may still be low, especially if there is delayed market activity from spring.
Here’s a quick view of the Campbell real estate market stats from Altos Research, using LIST prices:
As of July 7th this chart showing Campbell, CA is in a strong seller’s market with a recent turnaround after a decline.
And now – here are some quick stats, care of my RE Report for Campbell:
How’s the Saratoga California real estate market?
This spring has been unlike any other, yet remains in the seller’s favor for the Saratoga, CA real estate market. Much of the market strength depends on the price point, school district, and condition – today’s buyers generally prefer recently remodeled homes. (Not long ago, I showed a home that was remodeled in 2010 and my buyers found it to be dated.) In response to this strong preference, many sellers have begun moving out and getting their homes updated prior to going on the market.
That being said, the real estate market today is not the same as it was at the start of March. We’ll see more of the results of these changes in the April market analysis than we will looking back on March. To learn more about how Covid-19 is affecting the real estate market, please check my post: Coronavirus Impact on Real Estate Sales.
During the shutdown so far, 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. In the data below, this will affect any numbers related to the days on market, the absorption rate, and the days of inventory for prior months while June numbers should be accurate.
First, a quick glance at the Altos Research market profile for a quick summary of the market conditions. Altos uses LIST prices, not sold prices, for this chart and the others, below.
In the latest update, July 6th, Altos shows a slight seller’s advantage in the market with rising market action and declining days on market.
Next, let’s turn to the closed sales from last month. This time we’re using data from a subscription service of mine to the RE Report.
Here are the real estate sales statistics for closed sales last month among houses and duet homes (if there are any) in the 95070 zip code (click on link to read the full Saratoga Real Estate Report for houses). Bottom line is that most livable homes in Saratoga will run between $2 and $3 million if they are mid sized (2000-3000 SF) and in the best schools area (Saratoga or Cupertino). Homes in the Campbell schools area, which have very strong elementary and middle schools, are very rare and generally more affordable, closer to $1.5, but depending on size, condition, and location they can be significantly higher (the ones selling in October 2019 were closer to $2.5, for instance).
Trends at a Glance for the Saratoga CA Real Estate Market
Saratoga remained fairly stable through June. Prices had some ups and downs and remain below 2019 sales. Sales and pending sales rose, active inventory was stable, though far below 2019 active listings. The sales to list price ratio rose a hair to 100.7%, which is a hair below a year ago. This isn’t too far from the usual market at this time of year. It’s a stable seller’s market.
|Trends At a Glance||Jun 2020||Previous Month||Year-over-Year|
|Median Price||$2,872,500 (+9.5%)||$2,622,500||$2,880,000 (-0.3%)|
|Average Price||$2,952,790 (-1.9%)||$3,010,400||$3,257,300 (-9.3%)|
|No. of Sales||22 (+83.3%)||12||27 (-18.5%)|
|Pending||38 (+46.2%)||26||29 (+31.0%)|
|Active||39 (0.0%)||39||69 (-43.5%)|
|Sale vs. List Price||100.7% (+0.2%)||100.6%||101.3% (-0.5%)|
|Days on Market||33 (+11.4%)||29||35 (-5.3%)|
|Days of Inventory||51 (-47.3%)||98||74 (-30.6%)|
And the month before:
Homeowners Associations (HOAs) are created to oversee condominium complexes, townhome communities and planned unit developments (PUDs) on behalf of their members. These are non-profit organizations whose purpose is to manage common areas, enforce neighborhood rules and standards, and often, unofficially, to foster community unity too. In most cases, they collect fees from members and have local authority. In other words, if you do not pay your homeowner association dues, or abide by one of its rules*, the HOA can and usually will fine you or even foreclose on you!
There are loads of HOAs in Silicon Valley. As with all organizations, some are better run than others. Its a little different than owning real estate outside of a homeowners association.
What are the pros and cons to Homeowners Associations?
At their best, Silicon Valley HOAs keep the communities they manage beautifully landscaped and maintained, they hire good providers for needed improvements, and minimize risk to all the members. By having reasonable rules and community buy-in, the neighborhood can look inviting and property values can be better maintained.
At their worst, HOAs can be unresponsive to members needs, erratic, arbitrary and irresponsible. They may, by poor planning, cause huge assessments to be necessary or raise HOA dues so that they are very high – to the point where they make homes hard to sell. Not only are those an unhappy occasion, they can also make it hard to sell a home with a special assessment looming. Fortunately, this is seldom the case in most areas – but if the HOA has a high number of defaults due to owner bankruptcy or inability to keep up with mortgage, property insurance etc. it can cost all of the members eventually.
This week I put a new listing on the market, a beautiful Newark condo for sale at 39887 Cedar Blvd #250. It’s nicely updated and remodeled throughout and enjoys a quiet location at the back of this resort-like condominium complex.
Offered at $539,888 with low HOA dues of just $376 per month
Spacious and updated 2 bedroom, 2 bath condo, with warm and tasteful décor in luxurious, resort like community. Fantastic location within Murieta, at back of complex, away from road noise. The unit is close to the elevator but has no adjoining walls, so is very quiet.
- 2 bedrooms
- 2 bathrooms
- 1071 SF
- Built in 1986
- Remodeled kitchen
- Updated baths
- Recessed lights in living room and master bedroom
- Colonial style crown molding and baseboard throughout
- Private deck
- Freshly painted
- 2 Assigned parking spaces, one of them covered
- Great commute location, also very close to shops and eateries
- HOA is Murieta, a gated community with secure elevator buildings and includes 2 pools, 2 spas, 2 club houses, plus a gym and onsite property management
Please visit the virtual tour to get all of the details, including upcoming open houses and lots more photos!
- Kitchen remodeled with slab granite counters, brand newWhirlpool stainless steel oven, microwave, and dishwasher. Built in trash compactor. Stainless steel refrigerator included, too. Tile floor.
- Bathrooms updated and also feature granite counters, tile floors, and lights over vanities.
- Open floor plan – kitchen has opening to both dining and living
- Spacious master bedroom suite featuring double sinks and abundant closet space.
- Wonderful deck off of living room for relaxing outdoors
- Many upgrades: recessed lighting in living room and master bedroom, classic Colonial baseboard and crown molding, interior raised panel doors.
- Newer washer and dryer included.
- Freshly painted interior.
- Excellent parking: 1 covered space near building door, 1 assigned parking space behind the unit.
- Wonderful HOA: gated community with low dues covers garbage, water, and many amenities: secure elevator buildings, 2 pools and spas, gym, cabana / community rooms, lawn area,
- Onsite HOA office staffed during weekdays.
- Fantastic location with shopping and restaurants nearby and easy access to major commute routes.
- Newark Unified Schools: James L. Bunker Elementary, Newark Middle, Newark Memorial High
Please visit the virtual tour to get all of the details, including upcoming open houses and lots more photos!
Most homes in Silicon Valley come with some type of parking space for cars beyond street parking. Home buyers want to know that there will be a place for their vehicles (and often their “stuff” too). Garages and parking are sometimes under-appreciated aspects of evaluating real estate, and sometimes there are parking surprises after the close of escrow, so it will be the focus of today’s topic.
Parking and resale value
Because a real estate purchase is a big ticket item, it is always important to consider the ability to sell it later. (Always buy with selling in mind!) Will the property you have or are considering buying be hard to sell in the future if it is not a red-hot sellers market? Parking can greatly impact “resale value“ and overall desirability to a large portion of consumers, who may look at that space as protection for a beloved vehicle, a safety feature, a future hobby room, or many other possibilities.
If you are evaluating a Common Interest Development (CID) condominium, townhouse, or planned unit development home with private roads and parking, there will be some special concerns that may be a little different than if you were purchasing a single family home. We’ll consider both.
General principle: In all types of housing in the San Jose area, usually the most highly desired type of parking arrangement is an attached garage with direct access into the home and with side by side parking provided (not tandem). This is not true in all cases but is generally true. You would not find home buyers interested in historic homes (Victorian, Spanish, Craftsman) wanting a prominent two car garage at the front of the house, commanding the lion’s share of the view from the street. (So don’t expect to see that in Japantown, Naglee Park, or the the Rose Garden areas of San Jose.) But for the typical buyer of the more common ranch style house, the attached garage is expected and appreciated, and if it’s missing it may be a challenge to sell the property later because the property will be appealing to a smaller pool of buyers.
Regarding direct access: garages are not allowed to have a door entering into a bedroom. This is for safety reasons since bedrooms are where residents are most vulnerable, and garages are an area of increased safety risk.
There’s quite a bit of confusion around the real estate topic of “Common Interest Developments” (CIDs): condominiums, townhouses (or townhomes) and planned unit developments (PUD, sometimes called just Planned Development, or PD). Given that we have many of these communities in Silicon Valley, I think it’s important to explain what these are, why the type of ownership matters, and how you can tell the difference. (The explanation here is not a thorough legal definition but is a general description.)
Part of the confusion stems from the fact that there are two things to consider: the architecture of the buildings and the type of ownership.
- What is a townhouse (or townhome)? A townhouse is a type of building or architectural style, not the type of ownership involved. A townhouse could be a planned unit development (PUD) or it could be a condominium.
- What is a condominium or condo? A condominium is a type of ownership of the real estate. (We tend to think of it as an apartment which one buys, but that’s not correct.) Condo ownership means that the purchaser has 100% rights to the unit and a percentage of ownership in the common lands (fractional ownership in common areas). Condos can architecturally be a unit that resembles an apartment, a townhouse, or even a single family home.
- What is a PUD? A planned unit development is architecturally either a townhouse or a house in which 100% of the unit plus the land under it is owned and the ownership of the unit also provides for a membership in the homeowner’s association or HOA. The HOA in turn owns all the common elements (such as private roads and ammenities such as a pool, tennis court, parking lots, etc.). With a PUD, homeowners have an easement and rights to use the common area through their HOA membership.
- What is a CID? A common interest development, or CID, is a general term meaning the ownership of property in which there are “common areas” such as private roads, a pool, parking, tennis courts, utility rooms etc.
A townhouse that’s a condo can look exactly the same as a townhouse that’s a PUD. This is also true for other types of construction too. In Los Gatos we have some freestanding homes (or properties with the only common wall being at the garage) which are in condo ownership. Same with the beautiful Villas of Almaden community. Both have “common areas” and mandatory membership in the home owner’s association.
Home prices, like anything else which is bought and sold, are subject to the pressures of supply and demand. In recent weeks, we have seen an increase in the number of condominiums and townhomes for sale in San Jose, but a slight lessening in buyer interest. More supply with less demand equals lower prices. This will be a bit of a shock to most home sellers, who’d read about the madness of the market in February, March and April. But spring is nearly always stronger than summer – and we are seeing a fairly typical calming down in the Silicon Valley real estate market as we move into that milder summer market.
Since I mostly sell in the “west valley” areas of the Santa Clara Valley, I had a look at a few of them just to see what the trends look like. In this chart, please see the inventory of condominiums and townhomes for sale in 95120 (Almaden Valley), 95123 (Blossom Valley), 95124 (Cambrian) and 95125 (Willow Glen). Almaden seldom has many listings of townhouses or condos at all – over the last year, it looks as though it’s usually close to 5 at any given time. A slight uptick means 6 are available. The trend is much more dramatic in other parts of San Jose.
Home sellers: where the inventory rise is the steepest, you will probably see the most impact on the odds of selling and the price for which you can sell your home. Home buyers: if you see that inventory is largely unchanging, as it is in the tony Almaden Valley, the odds are good that it’s still pretty competitive for home buying and you will likely need to bring your best game forward to secure your future home.
Interested in other areas? I work all of Santa Clara County and would be happy to help you buy or sell your condo, townhouse or single family home here.