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The San Jose Real Estate Market Analysis

San Jose Real Estate MarketThe San Jose real estate market continues to be a deepening seller’s market with no signs of letting up.

First, some quick data from my RE Report via the bullets and chart below. There appears to be a small amount of undercounting or overcounting between the RE Report and MLS Listings, but the information is still good for tracking trends.

  • The May 2022 sale price to list price ratio for San Jose single family homes slipped again to 113.0% of asking (-3.1% from last month), but remains up from a year ago when was 111.2% (+1.6% from then)
  • Home prices are up roughly 17-19% from a year ago (almost a typical 20% down payment!)
    • The median sale price is $1,742,500 (a dip from the prior two months, but way up from a year ago, when it was $1,470,000 (+18.5%)
    • The average sale price was $1,864,960 (-3.2% from last month, and +17.6% from May 2021)
  • The days on market slowed a hair to 11 (same as in May 2021).

War, inflation, stock market, recession concerns – and real estate

Many of our home buyers are financially powered by tech stocks, stock options, and RSUs. When the stock market tanks, some buyers will rush to put their cash into real estate (the quip we often hear is that “real estate does not go to zero” and “at least you can live in it”.  At the same time, if the most amply capable buyers don’t want to sell their holdings at a 10% or more discount, that will impact how much they are willing to pay.

For some, the rising interest rates combined with the lower stock values have been a double whammy on affordability in a market still seeing historically high prices.

We are seeing slight signs of cooling in the market with fewer offers and some data points just a hint calmer than a month ago. Prices are not climbing like they were earlier this year, but they’re not falling either and interest rates are rising.

Nationwide, inventory is rising pretty noticeably, and we’re starting to see some growth around Silicon Valley, too. So are we getting back to normal inventory? Let’s have a look at what has historic inventory has looked like in San Jose. (If the chart is too small, click to see in full size.)

San Jose Historic Active Inventory of Listings 6-8-2022

At the start of the chart, 2010, the market was still reeling from the 2008 recession, but by 2017 we were seeing a strong sellers market with record low inventory. While listings are certainly up from 2021’s rock-bottom lows, it’s still extremely limited and nowhere near the inventory of more balanced years like 2013 and 2014.

So while inventory has been growing, there is still a shortage. If it continues to grow, prices should level out or drop. But will it be on par with interest rates rising? No one knows.

The data below in the “trends” chart is from our Real Estate Report for the City of San Jose.

San Jose Real Estate Market Trends at a Glance (RE Report)

Trends At a Glance May 2022 Previous Month Year-over-Year
Median Price $1,742,500 (-0.4%) $1,750,000 $1,470,000 (+18.5%)
Average Price $1,864,960 (-3.2%) $1,926,180 $1,585,920 (+17.6%)
No. of Sales 450 (-9.8%) 499 551 (-18.3%)
Pending 656 (-2.4%) 672 652 (+0.6%)
Active 441 (+19.5%) 369 295 (+49.5%)
Sale vs. List Price 113.0% (-3.1%) 116.6% 111.2% (+1.6%)
Days on Market 11 (+18.5%) 9 11 (-1.0%)
Days of Inventory 29 (+37.1%) 21 16 (+83.0%)

 

Year over year and related charts from MLS Listings

I pulled these directly from the MLS myself today (6/8/2022). The limited data from this month is included in red, but as it is an incomplete picture with data based only on home sales that closed between June 1th – June 8th it should be taken with a grain of salt. As with the earlier chart, click to view the full size.

The San Jose Real estate market’s sale price to list price ratio – notice the huge jump from last year, and then notice the ongoing streak of record breaking highs!

San Jose Historic Sales to List Price Ratio 6-8-2022

San Jose sale price to list price ratio – click to view larger

Notice that MOST YEARS, but not always, the sale price to list price ratio tends to peak around April with a rise between March and April and a dip from April to May. It fell a little in 2020, but that did not turn into the correction we all anticipated at the start of COVID. Look into late 2020 and you’ll see that all we were actually experiencing was a slight breather – very slight.

Now looking at the most recent numbers, winter 2022 started off raging hot and spring hit it’s peak for overbids in March and began to decline in April. While the sales to list price ratio is slipping, it’s still higher than any past year.

Please keep reading below.

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Willow Glen real estate market in San Jose

Willow Glen real estate market is a strong seller's market. This Willow Glen sign is from the downtown business district.The real estate market of Willow Glen in San Jose has started to show signs of mild cooling. Seasonally, that’s not atypical. The last 2 years with the Covid induced buying frenzy catapulted the market into the whitest hot seller’s market that I’ve ever seen in my career. Now it’s time to level off and let the market collectively catch its breath.

Just to be clear, it is still a seller’s market in Willow Glen. It’s simply not as extreme as it was in February and March.

  • Inventory is up 40.5% from the month before and 103.4% from the year before.
  • Compared to May 2021, the average and median price rose by 17.5% and 16.7% respectively. Prices were down double digits from April 2022, though.
  • Home sales averaged 11 days on market and sale to list price ratio at a red hot 110.1% of list price. Both of these were a little softer from the month before. The days on market were the same as May 2021. The sale price to list price ratio was 2% higher than last year.

The Willow Glen Real Estate Market

Willow Glen is perhaps the most charming residential area of the city of San Jose with its old style architecture, tree lined streets and quaint downtown area with fantastic shopping and dining opportunities on Lincoln Avenue and nearby. For folks working in downtown San Jose, the Willow Glen area (roughly the same as 95125 zip code, though a bit of 95124 is included also) is extremely convenient.

Willow Glen Real Estate Market Trends: Single Family Homes

Click for the complete Willow Glen real estate report:

Trends At a Glance May 2022 Previous Month Year-over-Year
Median Price $2,100,000 (-9.8%) $2,327,500 $1,800,000 (+16.7%)
Average Price $2,241,230 (-11.5%) $2,533,180 $1,907,660 (+17.5%)
No. of Sales 58 (-6.5%) 62 81 (-28.4%)
Pending 79 (-9.2%) 87 94 (-16.0%)
Active 59 (+40.5%) 42 29 (+103.4%)
Sale vs. List Price 110.1% (-3.5%) 114.1% 107.9% (+2.0%)
Days on Market 11 (+46.4%) 7 11 (+0.8%)
Days of Inventory 31 (+55.3%) 20 11 (+184.1%)

 

Below please find a market profile and then a couple of charts for the real estate market for houses and duet homes (attached single family homes – not duplexes), care of Altos Research, to which I have a subscription. Altos uses list prices, not sold prices. The data is automatically updated each week, so please bookmark this post and come back often!


Data from Altos Research for Willow Glen – San Jose 95125

In the latest update, Altos says single family homes are in a strong seller’s market with elevated market action, a slight increase in perpetually low inventory, and racing fast days on market.

 

Willow Glen Real-Time Market Profile

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Finding Mid-Century Modern and Eichler Homes in Silicon Valley’s West Side

Mid-century modern homes, including those designed by Joseph Eichler, dot the Silicon Valley & South Bay Area real estate landscape.  There are probably more than 5,000 Eichlers in Santa Clara County altogether, plus all the other homes of that genre with the similar modern style, which was influenced by the ranch and prarie styles as well as the dramatic work by Frank Lloyd Wright (open beam ceilings, nearly flat roofs, lots of exposed wood & glass windows stretching from the floor to the ceiling).  Eichlers, especially, put a premium on privacy from the street but open to the outdoors otherwise.

Not every community in Santa Clara County has Eichler homes, but most have the mid-century modern style homes & neighborhoods. These homes vary from tiny, modest cottages of 1100 square feet to large & elegant  houses of nearly 3,000 square feet, featuring big, central atriums or courtyards.  (There are also some co-ops in the valley too.)  The quality varies, as the homes were constructed by several different builders with different home buying budgets in mind.  Real estate prices range from “entry level” to very expensive, depending on the location (city and schools), size of the home & lot, and condition of the property. Most of them are now about 50 years old, though some are a little younger.

Some of the West Side Silicon Valley Communities which feature Eichler and Mid-Century Modern Homes

In Los Gatos there are no Eichlers but there are a small handful of single family homes which are mid-century modern on Eastridge Drive (just off Blossom Hill Road and Hillbrook). There are a couple more at the end of Magnuson Terrace (off Magnuson Loop and Los Gatos Blvd).  Additionally, there are some smaller mid-50s homes on El Gato (and adjacent portions of Escobar) off of Los Gatos-Almaden Road. Unfortunately, not all of these homes are “well kept”, though many are.

An Eichler home in Saratoga - beautiful mid-century modern houseMonte Sereno is home to 16 Eichler houses on Via Sereno beginning at the intersection of Winchester Blvd with Via Sereno.  These houses were built in the late 60s to early 70s.
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Introducing a Beautiful Willow Glen Neighborhood, “The Willows”

The Willows - home on Brevins Loop in Willow Glen - The Willows near Rubino CircleWillow Glen is one of the most charming areas of San Jose, consisting of many older homes which feature lovely, classic architecture. Most Silicon Valley home buyers treasure the Willow Glen charm and ambiance, but many are seeking newer homes. A fabulous option is “The Willows“.

KB Homes built “The Willows” in 1999 to 2000. It is tucked away at the southernmost tip of Willow Glen, off of Foxworthy Avenue & close to Almaden Expressway, but only about 2.5 to 3 miles from all the action on Lincoln Avenue.

The tree-lined streets are built in something of a loop shape with Rubino Circle being the main access or loop road. Situated on the inner part of the loop are homes with smaller lots that are a little more affordable. The outer part of the circle is built with slightly larger homes on larger lots (but none of the lots are “big”). Sidewalks with soft curbs at the corners accompany the streets and make for a pedestrian-friendly, bike, wheelchair or stroller friendly area. Visit in the early evenings and you will see children and adults walking, strolling, taking dogs for a walk etc. – always a good sign! Because the neighborhood is a bit like an oversized cul-de-sac (no through traffic), it is very quiet in terms of traffic. The area has large street lights, too, making for a safe feeling community.

 

The Willows - Rubino Circle street view
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Doerr Park of Willow Glen

When locals think of Willow Glen, most will picture the charming historic homes and bustling downtown strip, but this attractive community extends beyond the historic blocks. The Willow Glen Neighborhood Association defines the Central and Historic Willow Glen area apart from the Greater Willow Glen Neighborhood and Planning Area, roughly 10.4 square miles with approximately 82,000 residents. One of the scenic communities of the greater Willow Glen area is Doerr Park.

Doerr Park

Doerr Park Neighborhood of Willow Glen MapDoerr Park, sometimes called Doerr-Steindorf or simply Doerr, is within the 95124 zip code of San Jose, not far from the Cambrian border. The boundaries of this community are Curtner Ave, Meridian Ave, Foxworthy Ave, and Leigh Ave (See it on this Google Map). It is marked by tidy homes and yards with neat green lawns and airy street trees. Towards the center of this highly walkable neighborhood sits a nearly 12 acre city park. Doerr Park is a sunny community park with expansive lawns, open tree groves, picnic benches with barbeque stations, two magnificent playgrounds for different age groups (one of them has 3-tiered climbing towers and long slides for the older children!), a basketball court, softball field, four tennis courts, and restrooms. The park is very popular!

This neighborhood is accessible, too! There’s shopping and an office complex at the corner of Foxworthy Ave and Meridian, with a Grocery Outlet, gas station, and bank. It’s very close to more shopping including restaurants, Target, Home Depot, and more. For commuters, it’s only a 6 minute drive to 85, 17, and Almaden Expy, and there are bus lines which run along Curtner and Leigh.

There are a few possible negatives to consider, however. Some areas are beside easements for high voltage power lines, though a large portion of the easement connecting to the park has recently been transformed into a community trail. Not all phone lines are under ground, which might be considered an eyesore by some.

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The Willow Glen District of San Jose: Charm, Community and Convenience Abound

Willow Glen Garden Theater signWillow Glen is a very charming, older part of San Jose that seems to beckon to a more gracious time. It is perhaps best known for its historic homes and  quaint streets, but it is also highly regarded as a tight knit community with its own, vibrant downtown.

Where is Willow Glen?

Willow Glen is close to downtown San Jose, bordered by Highway 87 to the east, Highway 280 to the north, Southwest Expy, Leigh Avenue, and Bascom Avenue to the west, and Foxworthy Avenue to the south. To the west is Campbell and to the south is Cambrian.

This area is mostly the 95125 zip code, but includes a little of 95124 on the south end.

The public schools are mostly within the San Jose Unified School District, but on the south west side, I believe all within 95124, some are in the Cambrian School District.

The district’s centerpiece is Lincoln Avenue, a street bustling with cars and pedestrians alike. It’s filled to the brim with restaurants and shops and seems to attract a never-ending strea of visitors, especially in summer and during the holidays. Additionally, there are a number of businesses and shops along Meridian Avenue.

The boundaries are not always agreed upon.  Google Maps shows a much broader area, extending west all the way to Highway 17 and all the way south to Hillsdale, including parts of Campbell and Cambrian. The Wikipedia page on WG only includes the 95125 zip code.

A little Willow Glen history

Willow Glen began as an unincorporated community at about the time of the Gold Rush, at about the same time as when San Jose was the capitol of California. In 1863 the first school was built to meet the needs of the children there. It became incorporated in 1927 to fend off being annexed into the larger City of San Jose, but had a change of heart and voted to be annexed in 1936 so that the area could be on the city’s sewer system rather than to continue with septic tanks and cesspools.

Willow Glen architecture

Much of Willow Glen was built early in the 1900s and so the homes in the “downtown” area are older and feature classical styles of housing on tree lined streets – Spanish, Craftsman, and some even more venerable and Victorian. That is surely a large part of its charm. On the edges of Willow Glen, the homes are newer and tract. One area, known as Palm Haven, has a myriad of palm trees (both Royal Palm and Fan Palm) and older, diverse architecture surrounding a community park. The original access to Palm Haven from Bird Avenue and the rest of Willow Glen has been blocked off, but the grand old road can still be found easily enough via Clintonia off Riverside. (more…)

Historic Homes, Willow Glen, Foundations and Red Flags

“Red flags” are clues that something is wrong or potentially wrong. They’re the hints that we need to investigate something further, the sign that we should be on alert.

Some parts of San Jose, and Silicon Valley generally, enjoy beautiful older homes with classic styling and beautiful finishing work.  These properties and neighborhoods are prized because they are not cookie cutter, not ranch, not too new.  They may be Victorian, Craftsman, Spanish, or any number of other interesting architectural styles.

One area of Santa Clara County that is well known for both charming historic homes and unfortunately also some structural issues among those older houses is the Willow Glen district of San Jose.

Willow Glen Crumbling Foundation Red FlagsBack in 2015 I showed some clients about a half dozen homes, all in Willow Glen, and we saw a lot of “red flags” which hinted of foundation problems, among others.  I thought I’d share a few pics I snapped at one of them with my old treo camera here.  All of these were taken on the front porch of this house – all visible structural  “red flags” before we ever set foot into the house.
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Comparing cost of housing in West Valley communities from Palo Alto to Los Gatos to Blossom Valley: what will a 4 bedroom home cost?

Sketch of houseIt can be really challenging for people moving to Silicon Valley to get a sense of real estate prices, and perhaps more, comparing cost of from one town or district to another.

One question I get a lot is this: what does it cost to buy a 4 bedroom, 2 bath house of about 2000 square feet?

So to answer this question, let’s see what houses like this are selling for (4 bed, 2 bath, appx 2000 SF or 185 square meters) and see how the cost looks in one Santa Clara County / Silicon Valley area versus another.

Comparing Costs

Today I compared several areas and cities using this criteria: single family homes of 1800 – 2200 SF, 3-5 bedrooms, 2-3 bathrooms, on lot sizes of 6000 SF to 10,000 SF. Normally I would chart this over the last 2 months, or 60 days, but because of the low inventory causing the sellers market I have expanded the search to the last 3 months, or 90 days, for a better range. Because some areas have had a scarcity of inventory, I’ve added an addition to the chart titled NoS for Number of Sales within the given range.

Here’s how it shakes out in the “west valley areas” along the Highway 85 corridor, most of which are known to have good to great public schools. What areas are most affordable? One way of analyzing this is the “price per square foot” figure. Whenever I update the chart, I re-arrange the order of the cities from high to low based on the price per square foot, although there’s usually minimal movement.

 

Feb 2020 Sales Comparisons

 

Within this range, Campbell only had one sale over the last 90 days, so data for that segment may or may not be a good average. Both Los Altos and Saratoga had no sales within the last 90 days within these criteria, so their searches have been expanded to 0-180 days (or 6 months / half a year) and 0-120 days (or 4 months / a quarter year) respectively to provide data for comparison for this chart. Now that we have the data, let’s analyze it!

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Hacienda Gardens neighborhood in San Jose

Hacienda Gardens smaller modelThe Hacienda Gardens subdivision in San Jose straddles the Willow Glen and Cambrian districts, and it enjoys the highly regarded Cambrian schools. Homes and lots tend to be a little on the small side, so prices are relatively affordable as Willow Glen or Cambrian neighborhoods go, especially for such a strong school district. As San Jose real estate goes, this is a good value area due to great schools, more modest prices and lots of great amenities in the immediate area.

What are homes like in the Hacienda Gardens neighborhood?

There are around 550 houses in this San Jose subdivision. They were built originally in 1953 and 1954, though some may be newer or rebuilt since then.  Ranch style homes, they were constructed with 3-4 bedrooms and 1 or 2 bathrooms and came with an attached one or two car garage.  The builder used slab foundations and wall heaters, but many home owners have since added forced air heat (and central air conditioning).

Square footage of these houses runs from 1060 SF to 1400 SF in 82% of the homes (I crunched the numbers using county real estate records via the Realist Report), but 78 are larger than this (18%) and one is a hair over 3,000 SF.

Most of the neighborhood has parcels of around 5500 square feet, as a ballpark. I ran the data on this too and found 486 of the 550 or so homes had lot sizes of 6000 SF or less (88% of the homes). But just like with the house sizes, there are a few that are bigger – 64 or 12% are larger than this, and the largest parcels are 1/4 acre or more.

There’s some new construction close to the shopping center too – it was built in very recent years. When I get more info on those homes, I will update this article.

Where is the Hacienda Gardens area?

Hacienda Gardens appx boundariesThis corner of San Jose is entirely in the 95124 zip code, but about one third is north of Foxworthy (and just south of beautiful Doerr Park), which our MLS refers to as the Willow Glen area, and the other two thirds is between Foxworthy and Hillsdale, just west of Meridian Avenue, in the Cambrian area.

Adjacent to this neighborhood is the Hacienda Gardens Shopping Center, which runs between Hillsdale, Meridian, and Foxworthy Avenues. In recent years that shopping center changed hands and has been given a gorgeous facelift, making it a place neighbors will appreciate having in close proximity. It is home to a good-sized Rite Aid store, the long-term tenant Hometown Buffett, and a number of other restaurants offering pizza, Chinese food, and BBQ as well as other shops, institutions, and stores, such as Wells Fargo. (more…)

Willow Glen Wine Walk

How does an afternoon of fine wines, springtime sunshine, and a stroll through a charming old downtown sound? Good? Well then, you might be interested in visiting Downtown Willow Glen during this year’s Spring Wine Walk!

Willow Glen invites you to “Sip and Stroll the Avenue” on Saturday, April 12th from 2pm to 5pm. Attendees will receive a wristband, wine glass, and a map to guide you around the day’s tasting locations.

Tickets are currently available online through Eventbrite for $30 per person and, if available, tickets will be sold on the day of for a bit more ($45/ person). Grab your friends and go for the group price ($30 in advance per person for a group of 10+).

 

 

Be sure to read through the links below for check-in information, parking instructions, and more.

Information and Ticket Purchasing: https://www.eventbrite.com/e/willow-glen-2018-spring-wine-walk-tickets-41436677217

Downtown Willow Glen event page: http://www.willowglen.org/Wine-Walks