Are real estate prices rising in Silicon Valley? In many places and certainly in the lowest price ranges, housing prices are going up. I see this especially in entry level homes for sale but also in the most affordable homes in expensive areas too.
In Monte Sereno, Los Gatos, and in the Los Gatos mountain communities it’s often a little different than the rest of the valley, so rather than generalize, let’s see for ourselves. Today I’ll use the charts from Altos Research (by permission – I have a subscription) to illustrate the pricing situation in these areas over the last 90 days among single family homes (houses rather than condos or townhouses). This post will include a series of graphs. The first chart does a great job of indicating affordability – that is, which areas/zips are more easy or difficult to afford.
Here are two snapshots of the median list price of Monte Sereno 95030, Los Gatos 95030, Los Gatos 95032, and Los Gatos mountains 95033. First, one with the 3 LG zip codes combined:
Then with them separated out by zip:
The most expensive homes in Monte Sereno appear to be the softest part of the market.
A quick word about how “mild” the changes may seem, whether up or down – this is purely a function of the graph having a very broad price range. If we separate it out to just Monte Sereno or Los Gatos alone, it looks more startling:
If we do JUST Los Gatos 95030:
Just Los Gatos 95032:
And just the Los Gatos Mountains 95033:
Next we’ll break them down to view the data for each of these four areas by price quartile. This is extremely helpful because “the market” may be very different from one price point to the next as well as from one zip code to the next.
Median list price by quartile in Monte Sereno 95030:
Median list price for Los Gatos 95030 (where the most affordable houses are seeing an increase is list price):
Next, the median list price for Los Gatos 95032.
Mostly flat, except among the luxury market, where list prices are declining. This market appears to be more sluggish than most of Santa Clara County.
Now, the median list price for the Los Gatos Mountains 95033:
This is a flat to declining market too for pricing, again with the top 50% or more expensive properties showing the most downward change in list prices.
Finally, let’s check the “high end market” for each of these four areas. Are they all showing the same impact on list prices?
Interestingly, when lined up in order of price point, again it is the most expensive which indicates the biggest challenge with pricing – Monte Sereno is showing the biggest drops. Los Gatos, both zips, is inbetween and the Los Gatos Mountains is the mildest adjustment.
Here’s what the top tier of Monte Sereno’s median list price looks like when viewed alone:
Same set – luxury properties – in Los Gatos 95030:
And the top tier for the Los Gatos 95032 market:
Entry level homes, though, are not similar at all!
Monte Sereno 95030 lowest priced quarter of homes for sale:
Los Gatos 95030 bottom price quartile:
Los Gatos 95032 lowest price quartile:
LG Mountains 95033 most affordable price point:
The generalization, then, that the luxury market is the segment of the market which struggles the most to sell right now does appear to be true, at least in terms of pricing. But just to be sure, let’s compare it to the very nearby San Jose community of Cambrian Park 95124, which borders Los Gatos. First, all 4 price quartiles of 95124:
And next, the same area but broken into four pricing quartiles:
Once again, prices are rising except in the top tiered Cambrian homes for sale.
How can this information help you? From this vantage, the high end, estate properties or luxury homes appear to be a very good opportunity for those able to purchase them – they are showing corrections that perhaps make them a good deal now for buyers. For sellers of these homes, it means you will need to be aggressive with pricing, perhaps beyond what you had anticipated would be necessary to sell. At the other end of the spectrum, it tells us that buyers probably shouldn’t wait to long on the least expensive homes, because they may not last. The lack of price drops indicates that the market is at least healthy in this realm, and perhaps could be a seller’s market in some pockets where the schools, location, condition etc. are all “just right”.
The Los Gatos and Monte Sereno area is full of “micro markets”. For help understanding your market, please contact me today!