Los Gatos Real Estate Market
It’s a January that feels like March, if a dry one. The weather is clear, mild, and temps are sixty to seventy degrees, the skies are blue and trees are beginning to blossom – a great environment for house hunting. Is it too early in the season to begin your search for the right home in Silicon Valley?
Each prospective home owner’s situation is different, but for many people, January is a great time to jump in with house hunting, before the Super Bowl, Valentine’s Day or some other point a little later in the calendar year.
Weather, Inventory, Interest Rates and Silicon Valley house hunting
First, to note the obvious: there is no weather related reason to wait. (Sellers: pay attention!)
Second, let’s discuss selection. Inventory is horribly low (see the inventory data table in my 2020 predictions article). Most people expect the number of available listings to be higher in Spring. Seasoned Realtors know that while this often happens, it doesn’t always, so we cannot count on it. (Check the Santa Clara County monthly real estate statistics here.)
How bad is it? I’m on the MLS right now. For single family homes (houses and duet homes) in Santa Clara County, there are 411 for sale right this moment which are not sale pending or under contract. This is for the whole county, where there are 1.8 million people residing.
The San Jose real estate market is a strong seller’s market, though pricing is close to flat for November sales (contracts ratified in October) as compared to the prior month and year. However, in November we saw a big uptick in buyer interest. We see this in the San Jose housing market data, below, but I’m also seeing it in my real estate practice.
First please find the Altos Research Charts, a live feed of data on the housing markets in San Jose. You will then also find the RE Report, charts with statistics comparing sales in the last month and comparing them month-over-month and year-over-year. These are both the usual tools I use to gauge a market. Directly below are links to the market analysis of specific neighborhoods in San Jose. Some of these, where I work the most, are updated monthly, and others are updated every few months.
Altos Charts for the San Jose real estate market as a Whole – automatically updated each week – single family homes
First, the market profile and then the basic charts for single family homes or houses in San Jose. FYI, Altos uses LIST prices. The RE Report further down uses SOLD prices (which is part of the reason why I utilize both).
This reak time market San Jose housing market profile (last updated 12/24/2019 as of this writing) shows on the graph a steady decline of the list prices, declining inventory, rising days on market, and declining rent rates. That being said, the Market Action Index still shows a Strong Seller’s Market that’s going nowhere fast. The Median List Price (for condos and houses combined) is approximately $1,100,00.
Silicon Valley home prices are sky high, if lower than the peak of the market in Spring 2018. The median sale price of houses in Santa Clara County as of November is $1,296,000, and the average is about $1,574,000. Would you be able to buy a house in Cambrian for that median sale price, or a little lower? If so, what would it look like? What can you buy in Cambrian for about $1.25 million today?
Cambrian offers good schools, a reasonable commute to places like Apple in Cupertino, and a nice location near Los Gatos and Campbell with lower real estate prices than those two areas. For that reason, it’s become a magnet for smart home buyers over the last 20 years. If you have the budget for a median priced Santa Clara County home, how far would it go in Cambrian? Here’s the data, pulled this week from MLSListings, to answer that question.
For the charts below: CUHSD refers to Campbell Union High School District, and SJUSD is San Jose Unified School District.
What does it cost to buy a home in Los Gatos “with the schools” (as opposed to the Union School District or the Campbell School District areas)? In the last 90 days, 30 houses have sold in Los Gatos within the Los Gatos Union School District. The averages will give you some idea of pricing, but remember that the range is very broad! Disclaimers aside:
Average home size appx 2200 SF
Average lot size aboout 9500 SF
Average sales price appx $2,270,000
That’s not to say that you cannot purchase a house in town for quite a bit less! Here’s what has sold for UNDER $2,000,000 (17 homes in all):
How common are “all cash” transactions for Silicon Valley real estate right now? During the first couple of years after the downturn ended and the recovery cycle began, we had a large percentage of all cash buyers in Santa Clara County and nearby. In recent years, though, that ratio has been declining. Where are we now?
Some areas and some types of sales are more frequently all cash than others. Here are a few quick stats for the last 60 days (numbers from MLSListings, crunched by me – disclaimer on good intentions but no guarantee) for single family homes, townhouses, and condominiums (not included are multi-family homes, apartment buildings, mobile homes, farms / ranches etc.). Also, please note that this is for closed sales, not pending sales.
- Santa Clara County: 12% all cash
- San Mateo County: 20% all cash
- Santa Cruz County: 18% all cash
Few areas in Santa Clara County
- San Jose (entire city): 10% all cash
- Los Gatos: 12% all cash
- Cupertino: 11%
- Milpitas: 4%
- Morgan Hill: 13%
- Campbell: 10%
All cash sales close escrow without a loan. In higher priced homes, some new owners will put financing on the property after close of escrow. Particularly in lower priced homes, though, these are investor buyers who will be renting out the property. This is often the case with the lower priced distressed properties in particular.
With the crazy new demands that keep coming at us from banks and new requirements being imposed on appraisers, now more than ever, cash is king. That doesn’t mean that the cash buyer will get a deep discount, but there will be a slight one in most cases and certainly preferential treatment that will create a great advantage in multiple offer situations.
Learn more about buying and selling Silicon Valley real estate with cash offers:
What’s My Silicon Valley Home Worth? Estimating the Probable Buyer’s Value (financing impacts market value)
Cambrian Park, or more broadly, Cambrian, is a west San Jose neighborhood or district and is one of the more affordable, high-value areas in Silicon Valley. The schools are good, the crime is low, and the commute is not too bad. For people relocating to Santa Clara County, this is a place to know about since quality education and affordability are often high priorities! Most Silicon Valley home buyers would say that Cambrian Park real estate offers a very good value.
What’s the compromise for the more reasonable prices of homes for sale? Well, Cambrian doesn’t have an interesting, upscale downtown area like Campbell, Los Gatos, Saratoga, or Willow Glen.
But it does have tons of shopping & restaurants and even a Farmer’s Market. It also enjoys a top notch hospital (Good Samaritan) and plenty of parks as well as a fantastic rec center with a large park adjacent to it, the Camden Community Center, which has tons of programs (including an after school program for youth), classes, and a fabulous pool. (My family and I lived in Cambrian in the “Cambrian Gardens” neighborhood for 10 years and loved it – our kids made great use of the community center too.)
Altogether, there are about 75,000 to 80,000 residents in Cambrian, spread throughout the three zip codes of 95124, 95118 and a little tiny bit of 95008.
If there is a “central Cambrian Park”, it would have to be near the original Cambrian Park Shopping Center, which was the first actual mall in San Jose! That area is sometimes known as Cambrian Village. People sometimes use the three names interchangeably: Cambrian, Cambrian Park, Cambrian Village.:
Where is Cambrian Park? Map of approximate Cambrian Boundaries:
View Cambrian Area of San Jose in a larger map
In 2012 and 2013, Santa Clara County saw many single family homes selling for all cash, no loans. The peak may have been in March 2012, when that figure was 25%. That was the beginning of a long housing boom, and today the percentage of all cash sales in Santa Clara County has settled down significantly, though it is still in double digits. Today I crunched the numbers on MLSListings.com (first pulling the number of sales per month, then the number of cash sales, and after exporting the data to excel, did the math to get the percentages). Here’s what I found:
I then approached it by broad pricing tier to see what could be learned about which part of the market was getting the most all cash offers, whether entry level, luxury or what. For this, I went back 90 days from today.
- Houses & duet homes (single family homes) selling up to $999,999 = 15% all cash
- Homes selling between $1 million and $1,999,999 = 10%
- Sold between $2 million and $2,999,999 = 13%
- Closed at $3 million and up = 32%
I also spot checked the last 90 days for condos and townhomes, and on average they had 12% selling all cash, no loans. All price points were 11-12% except the very most expensive townhouses or condominiums. For those properties sold over $2 million, there were 6 closed sales in the last 90 days and 3 of them were all cash, so 50%. Obviously, that is not typical!
During the early part of the downturn, the percentage of all cash buyers was not only in single digits, but for the couple of windows I pulled up, it was in the 3% to 4% range (spring 2006 and spring 2007).
I think you could read the percentage of all cash buyers as a data point of home buyer’s confidence in the real estate market. Right now, the market is certainly cooler than a year ago, but isn’t it interesting that month over month, April 2019’s percentage of cash buyers is higher than April 2018 – when April 2018 was the very peak of the market in terms of pricing?