How’s the Saratoga California real estate market?
This is a fairly comprehensive article on the Saratoga real estate market that will include the live statistics from Altos Research for listed properties (not closed) in Saratoga CA 95070, the closed sale data from the RE Report for last month in Saratoga 95070, and the numbers I crunched for Saratoga – overall and by price point and high school district, since Saratoga has 3 different high school districts, each with an impact on home values.
First, let’s consider the months of inventory by price point and high school district that I crunched using MLSListings.com, our local multiple listing service provider.
The months of inventory is a reference to how fast homes would be absorbed into the market if sales continued at the same pace and no new inventory came onto the market. It’s often referred to as “the absorption rate” – and that can be months of inventory, weeks of inventory, or days of inventory. A “balanced” market is somewhere around 4-5 months for us, though the National Association of Realtors says that 6 months is balanced nationwide. Anything under 3 is a good seller’s market, and under 1 is like saying that homes are “flying off the market.”
(For comparison, please also see a similar article on the Live in Los Gatos blog for the town of Los Gatos – real estate market by price point and high school district.)
For most of the valley, inventory is up, prices are down, days on market are up, and sale price to list price ratio is up. It’s still a seller’s market, but it’s softening. If it continues in this direction, it will become a buyer’s market – but is not there yet.
Here’s the chart for Saratoga – all price points, all school districts. Please notice that the months of inventory is about DOUBLE from four months ago. Translation: it’s twice as hard to sell now as it was in mid-April. At the same time, 3.15 months of inventory is still very decent! Also, though home prices can be quite high, the bulk of properties are under $3 million. It’s challenging to sell homes higher than that amount, overall.
And from 4 months ago:
By comparing across school districts you can also see how different each area’s individual market can be. Saratoga with Saratoga schools is a little slower of a market. Why? Most likely because it’s a bit pricier than other areas. This area is about 50% slower than it was a few months ago. The overall MOI makes it seem like Saratoga with Saratoga Schools is a bit sluggish. That’s not really the case in most price points, but at $4 million and up, it is a buyer’s market.
San Jose is the biggest city in Silicon Valley (and considers itself to be the Capital of Silicon Valley), is the tenth largest city in the United States of America with over 1 million in population, and it has a very large footprint – approximately 180 square miles. Because of the size, it isn’t surprising that many distinct neighborhoods exist within the city. In my blog you can find descriptions and outlines of these districts or neighborhoods. You can also find market analysis dedicated to different regions of San Jose. Because the areas are so different, the market in separate sectors of the city can change dramatically from one area to the next. If you are looking for a home in Silicon Valley, it is best to consider San Jose by its neighborhoods rather than as a whole to understand the market. Nonetheless, looking at the big picture can often give you a general taste for the market. Currently, it’s a steady sellers market.
Below you will find the Altos Research Charts, a live feed of data on the markets in San Jose. You will 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 San Jose as a Whole – automatically updated each week – single family homes
First, the basic charts for single family homes or houses. FYI, Altos uses LIST prices. The RE Report further down uses SOLD prices (which is part of the reason why I utilize both).
List prices of single family homes / houses by price quartile:
Average days on market of listed homes (houses) by pricing tier:
Inventory levels for the last 3 years for houses for sale in San Jose:
Altos Research charts for the condomium and townhouse market in San Jose – automatically updated each week
Condominium and townhouse LIST prices by quartile: Continue reading
The Del Oro neighborhood is a pretty pocket of the Cambrian district in San Jose directly on the border with Los Gatos at Blossom Hill Road. Most blocks enjoy large, mature street trees, and views of the coastal foothills are plentiful.
Where is the Del Oro neighborhood?
The Del Oro neighborhood in San Jose 95124 is bordered by Blossom Hill Road on the south, 1 house in from Leigh Avenue to the west, the utility easement behind Anne Way to the north, and the water or underground creek easement between Bobbywood Avenue and Mary Jo Way to the east. Streets included are Del Oro Drive, Del Oro Place, Del Oro Court, Tesoro Court, part of Anne Way, Anne Court, most of Copeland Lane, Copeland Place, and Copeland Court.
Students in this area attend Noddin Elementary, Union Middle, and Leigh High School – and those schools are a popular draw for this Silicon Valley community. The Del Oro neighborhood actually backs up to the Leigh campus. The other side of Blossom Hill Road lies the Belwood of Los Gatos neighborhood and the Belgatos area. As you can see from the map below, it is close to Belgatos Park, which includes some great trails as well as a playground, and also the Heinz Open Space Preserve and a good network of trails.
What are homes like in the Del Oro neighborhood?
This part of Cambrian consists of mostly single story ranch style homes, but there are some 2 story houses. Additionally, some Del Oro neighborhood homes are Spanish style, there are some French with a Mansard roof, etc. – so a bit of variety. Most of the streets are tree lined and there are sidewalks to make it even more inviting for pedestrians. And of course, the coastal hills are not far, and they make a beautiful back drop of the neighborhood.
- 183 single family homes
- 143 of them were built in 1968, 4 in 1967
- 30 were built between 1959 and 1964
- average square footage is 1792 SF (range is 1057 Sf to 2793 SF)
- average lot size is 6691 SF (largest lot is 11,097 SF, but most properties have 5900 to 8000 SF)
- average house has 3 to 4 bedrooms, 2.5 bathrooms
- 2 bedrooms = 1 house
- 3 bedrooms = 96 homes
- 4 bedrooms = 84 properties
- 5 bedrooms = 1 house
- 6 bedrooms = 1 house
- most homes have 2 car attached garages
- as of this writing, 15 are rental homes and the rest are owner occupied (92% owner occupied)
- 36 of them have pools (20% do have pools, 90% do not)
- 111 (61%) are 1 story houses, 48 have 2 stories, and 20 are tri-levels.
Most of the homes seem to be well cared for and updated, and most are basically ranch style. This first image displays a house with a taller than usual roofline, which is a beautiful improvement over the more typical low profile ranch roof.
And here’s another, this one a little Spanishy with the arched window and entry area (but not tile roof).
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
This week I had two readers email me to say that they read and appreciate my blogs, and then added that they wondered how much they should offer on a particular home for sale.
They didn’t say “I’m looking for a Realtor, wondering if you have any openings” or anything like that. They simply wanted me to provide an opinion on what a home in Santa Clara County should sell for…. So they could write it up with another real estate professional.
It’s not the first time this has happened, so I’m realizing that perhaps it would be helpful for me to address that. People don’t understand how Realtors make a living, or what’s risky for them, or just not appropriate.
What I do includes the following:
- I’m a Realtor, and I earn a living by helping nice folks to buy and sell homes.
- I have a business based on referrals, repeat clients, and meeting new people from my websites, newsletter, and social media interactions.
- I do populate my sites / blogs with articles about market conditions and trends in the areas where I sell homes. These articles and my monthly newsletter are part of my business marketing. You can read them for free. And I love hearing from my readers.
- When working with buyers (or sellers), I will spend a lot of time crunching numbers for them, doing research, and then advising on what the probable buyer’s value will be. We strategize together. It is too important to shoot from the hip.
- I love meeting new people and am open to taking on new clients at any given time.
- I am very happy to answer general questions, especially when people are relocating, aren’t working with another Realtor, and trying to get their bearings. Sometimes people who are thinking of buying or selling in a year or two want to talk with me by phone or in person to go over the basics. I’m delighted to do that, and will offer anyone a free, no-obligation 1 hour consultation.
What I do not do (not an exhaustive list):
- I do not tell people I don’t know, and am not working with, how much they should bid on a house or provide offer input.
- I do not know every house on the market automatically. I have to research them and their local market conditions 99% of the time.
- I do not meddle in other agents’ relationships with their buyers or sellers. If someone is about to offer on a house with Randy the Realtor, I am not supposed to be butting in with my opinion of value, their contract terms, or anything else. That’s against our National Association of Realtors’ code of ethics.
- I do not want to get into the bad practice of advising people on specific real estate matters when they aren’t my clients. For me, that is risky, as it is “implied agency“. With implied agency, I get all of the risk and none of the pay.
If you are looking to find a Realtor who will take the time to crunch the numbers for you, whether you are buying or selling, I hope you will consider me on your short list of possible candidates. I do not work with everyone, but most of the time, if someone finds me from this site or any of my others, we’re already off to a good start. Want more info on me? Check out the “about” section here. And have a look at my clients’ reviews of me on Zillow.
Home values in Santa Clara County and San Mateo County have dropped below the spring peak pricing, and some areas are showing a clear declining market. While seasonality is pretty common, and I believe that prices will rise again in the new year, seeing the lower sales numbers after you’ve purchased is disheartening, to say the least.
I know personally that it feels horrible to buy a home and then see the value drop. It happened to me in 1989 with Jim’s and my first home.
The stuff people say if you overpay for your house
Somehow, people just don’t seem to know what to say when prices fall after you become a new homeowner. You feel sick in your stomach from the fear of having made a terrible mistake. A solid “I’m sorry” or “I’m here if you want to vent” would be simpatico. Most friends and relatives, though, will want to bolster your morale – and come out with strange comments when faced with your sadness or concern in a badly bungled effort to make you feel better.
“It’s just a paper loss”, someone will say, hoping to reassure you.
“You aren’t moving, so it doesn’t matter right now, does it?” offers another.
“You’ll be there a long time – when you sell, the market will have recovered and then some.”
In the end, none of those remarks are helpful, though the intentions are no doubt good. They want you to feel better. (And, that doesn’t mean they’re wrong – only that they are not helpful to your understandable angst.)
When we bought our first home, the market had just begun to correct after a ferociously hot escalation. We saved a bit from the peak, had plenty of selection, did not face multiple offers, and were grateful. We knew that the market might drop further, but we were in it for the long haul. What we didn’t know was that it was going to be a few years before it started to recover. It wasn’t a steep slide, but it felt never-ending. We wished that our mortgage had somehow been tied to the value and declined accordingly, but of course it doesn’t work that way.
If you have closed escrow and immediately prices fall, it is going to feel bad. You would feel the same way if you put your whole retirement account into one stock or mutual fund and it immediately lost value. (I think more friends & family would be sympathetic if they thought about it along those lines.) So please know that feeling cruddy in that case is valid. Before sharing with loved ones how you feel, you may want to tell them upfront that you aren’t looking for anyone to fix the situation or how you feel, that you just want them to listen. If they do, that’s a gift.
Did you actually overpay for your house?
If you paid in line with what the market was doing the month in which you placed your bid, you didn’t actually overpay for your house. You may have paid at the peak, but that is different from over paying. The first thing I would suggest doing is checking out the data. Did all other homes sell for about the price you paid? If so, you did not overpay that week. Is it about the same price per square foot for similar homes? If so, you were in line with the market. If you paid 10% over list price, and the average sale to list price was 112%, were you too high? It doesn’t look like it.
What is hard to figure out is when the peak of the market will be. Realtors can tell you that most years, the highest price will be in spring, but that’s not always the case.
Put simply: if you paid in line with what others were paying at the time you bid, you didn’t overpay.
If things changed later, the market shifted.
Shift happens. Continue reading
The Santa Clara County real estate market is cooling off, which is very often the case in summers here. It varies from place to place within the region, and one pricing tier to the next, but I am definitely seeing and hearing about fewer offers, more lowball offers, contingencies creeping back into sales, etc. In red hot properties with great schools, you might get a half dozen offers…and three of them may be “bad” offers from home buyers who are pessimistic on the market. They do not get the sale, of course, but it is interesting to hear about an increase in those kinds of bids.
My RE REport just came out, and here are some images and data from that for Santa Clara County. First, the market barometer. Here, you can see that sellers had stronger power in March than they do now – by quite a lot! (Click on the image to go to the report and see a clearer version of it.)
Next, the average and median sale prices and the number of units (again, click on the image to go to the report). This graphic does not look as bad or as much of a change as the one before, though you can see that since May prices have gone down a little, and sales are now tipping downward and are fewer than sales for this time last year.
Next, the sale price to list price ratio is a bit more startling. Sales are still averaging about 1-05% of list price – so that is hard for sellers to complain about – however, it is unmistakable that the climate for home selling in Silicon Valley is undergoing a change and this is literally past its peak. Buyers and sellers alike need to wonder whether it will calm down or continue at the current rate of decline. Is it a buying opportunity, or the beginning of a correction?
The numbers themselves point to a turnaround in the market. I’ll jot the median sale price for the county here – it’s a large enough pool of sales to be pretty reliable as a gauge of the real estate market in the San Jose area:
July 2018 $1,350,000
June 2018 $1,402,000
May 2018 $1,416,000
April 2018 $1,420,000
March 2018 $1,450,000 – PEAK
February 2018 $1,380,000
January 2018 $1,163,000
Between March and July, the median sale price dropped $100,000, or 6.89%. As you can see, it had also jumped considerably between January and March, and even at today’s lower median sales price, it’s still higher than January. It will be interesting to see where it ends up in January of 2019.
A quick look at the numbers for this month’s Santa Clara County RE Report:
Trends at a Glance
|Trends At a Glance||Jul 2018||Previous Month||Year-over-Year|
|Median Price||$1,350,000 (-3.7%)||$1,402,000||$1,175,000 (+14.9%)|
|Average Price||$1,624,690 (-5.1%)||$1,712,500||$1,409,380 (+15.3%)|
|No. of Sales||847 (-13.3%)||977||1,015 (-16.6%)|
|Pending||924 (-0.6%)||930||931 (-0.8%)|
|Active||1,151 (+8.0%)||1,066||816 (+41.1%)|
|Sale vs. List Price||105.6% (-2.0%)||107.8%||105.5% (+0.1%)|
|Days on Market||19 (+13.7%)||17||20 (-6.7%)|
|Days of Inventory||41 (+28.8%)||32||24 (+69.0%)|
It’s now August 10th and it’s too early to know for sure what the August numbers are doing, but normally August is a quiet month with sale prices a little off. So we’ll see. Continue reading
Things in the greater Silicon Valley real estate market are shifting right now, with downward pressure on pricing in some segments of the market. In other places or price tiers, prices are level, or possibly rising a little. It’s still pretty red hot in Santa Cruz County, but cooling generally in Santa Clara and San Mateo Counties. The Los Gatos condo market is definitely feeling the chill. What do you need to know or do if you’re selling your home in a declining market?
There are a two principles which are important to understand.
The first truth to grasp is that all real estate statistics are yesterday’s news. Homes that are closing escrow today most likely were negotiated 4 weeks ago. That was last month’s market. Looking at comparable properties that sold 2 months ago is really a reference to the market conditions of 3 months ago. What is most relevant can be the hardest data to obtain, and that is what has gone under contract yesterday or at least within the last week or so. When you cannot get the pending info, it’s helpful to piece together the sold info chronologically.
Santa Clara County in recent months – median sale price:
July 2018 $1,350,000
June 2018 $1,402,000
May 2018 $1,414,000
April 2018 $1,420,000
March 2018 $1,450,000 – PEAK
February 2018 $1,380,000
January 2018 $1,1,163,000
We don’t know what August’s numbers will be like yet, but there’s a good chance that they will be lower than July’s.
Second, it’s important to try to determine where prices are headed and to get ahead of the curve, if possible. This is easier said than done, of course, because it’s never a straight line up or down, but something with a lot of variation. (It is also true for buyers in an appreciating market – they have to jump ahead of the curve to bid high enough to get the home, not offer where the current comps are selling.)
Looking at this graphic image, it would seem as if the “big picture” is a consistent upward movement. However, there are a lot of downturns within the general upward trend. Our current “down” movement may well rise again in the new year, as many local real estate economists predict. That’s not certain, though, and many real estate market corrections begin slowly, and instead of reaching the old peaks, start reaching smaller ones, rising and falling to a different tempo. It can seem slow enough, but you cannot tell while it’s happening if it’s suddenly going to drop like a nightmarish roller coaster. During the Great Recession, we had a lot of ups and downs, but one outlandishly steep slide. I created this graph below on the MLS, and later added the red lines to make the January in each year clear, as most years, prices begin rising in February (sales in January). Please note that despite the recession, prices usually rose in early spring
As you can see, except for the steep declines in 2008, there were plenty of peaks and valleys during the 2006 to 2012 years. Even in 2008 there’s an upward blip and I think it’s fair to say that many of us thought that the market was going to start to recover at that point – or at least hoped so. After that little tick up, though, it continued its downward movement. We very much felt the dip in pricing in late 2010 through early 2011. Looking back, it may not seem so bad now, but at the time, we had thought the housing correction was over, and that decline was a nasty deja vu. And please notice the low points in each year – usually they are in January (think sales in December). Jan 2012 was lower than January 2011 or 2010, and was close to 2009.
I do not believe that anyone expects a correction of that magnitude in our lifetime again, but it would be foolish to say that anything cannot happen.
The pattern, though, can be unpredictable. Some slides are long, slow, and fairly consistent, as in the 1989 to 1992 correction. Other times, things can drop like a rock, as with the dot-com bust in 2001.
Either way, if you are selling your home in a declining market, price accordingly to mitigate damage and get ahead of the curve.
You cannot tell ahead of time if the falling rate of values will accelerate, slow down, or go flat, but you can see what has happened in the last 6 months or so and try to determine the rate of change.
So what is a seller to do – sell before it gets worse, or hang on until it gets better?
What do you believe it is that we are experiencing now? Is it a seasonal blip, or the beginning of a trend?
If you believe that the current market conditions are seasonal (that is my thinking since Silicon Valley still has so much hiring and demand), then if your home is in one of the cooling areas, selling now is a mistake, because many home buyers are concerned about over-paying. If you believe that spring 2019 will bring better prices, then I would suggest holding off on selling and focus on getting your home into TOP SHAPE so that you will fetch the highest possible price when you do sell, whether early in 2019 or at some other time.
If you believe that the market is at the initial stages of a market decline (and nationwide, the real estate market seems to be cooling), then you have to decide if you want to sell now or wait until the market hits another peak.
If you must sell now, and you have softening prices in your area and pricing tier, then you must be realistic that you are going to be selling your home in a declining market. It may not be declining next year, but it has been declining since March for most of Santa Clara County, and buyers have been paying attention to that fact.
- In a declining market, there’s more supply of housing than interested buyers
- If there are 2 or 3 or more homes for every capable home buyer, your property needs to be the best value to make the sale
- Most of the time, being the best value translates to offering the lowest price from among your property’s competition
- Sometimes, being the best value can mean offering the best terms, such as owner carried financing, offering to re-roof, do pest repairs, etc.
- To attract agent attention, consider offering an attractive buyer’s commission rate (better than what everyone else is offering, data that is easy for your Realtor to get from the MLS)
Many areas are still seeing overbids, but they aren’t as high as they used to be (the average sale price to list price ratio was 105.6% for Santa Clara County in July 2018. Back at the peak, and now, sellers who want their homes to get the most attention under-price it a little to get multiple offers and overbids.
Even in a seller’s market, I do encourage my sellers to price their home to be the best value – a strategy that normally results in the best results. Additionally, do the repairs that might scare buyers off. Keep in mind that they are afraid that as soon as they buy, their new home will be worth less, so they do not want to have to put money into the home to fix things such as electrical work, roof leaks, etc. Make sure you hire a great Realtor who will help to get your home into top showing shape, and will market it widely on the internet with professional photos, and market it well in person with quality fliers. Newspaper ads and post cards seldom bring buyers to your door, but a well placed Facebook ad may. Make sure you see the MLS printout and have any errors corrected. A second set of eyes on all of the marketing is a good idea – in a cooling market more than ever.
Do you love vaulted or open beam ceilings? Whether it’s one room (as we find with a lot of the cathedral ceilings and George Day build houses in Saratoga) or the entire house (which we see in many of the mid-century modern or Eichler houses throughout Silicon Valley), the looks of vaulted ceilings just says “home” to many people. I grew up with wood, open beamed living rooms and family rooms and understand the appeal.
For most ranch style houses here in Silicon Valley, there’s an attic between the finished ceiling in any given room of the house and the roof. In that attic, usually there’s some sort of insulation. With newer construction, it tends to be thicker, making the house below more comfortable in both summer and winter.
Many of the mid-century modern style houses, and some others, find the open beams are pretty much directly below the roof. There’s no attic. Perhaps it was not deemed necessary in our sub-tropical climate when they were built. Less insulation means there’s less to protect you from nature’s hot summers and cold winters.
In some cases, though, there is foam insulation between the roof and the ceiling. That isn’t visible. You may get a hint that it’s there if you look from the outside and do not see vents in this area under the roof. It’s an upgrade over standard insulation, and one you’ll be thankful to have.
Many mid-century modern home owners have opted to install foam roofing when it’s time to re-roof. These foam roofs also offer insulation that helps keep the house comfortable year round.
If you are a home owner, it’s a good idea to get inspections done periodically (even if you aren’t planning to sell) so that you can learn what needs attention before a situation worsens. Roofs tend to need “tune up” work every few years to keep it leak free and prevent future problems. Termites come back. Safety codes change over time. If your house or townhouse features a vaulted or open beam ceiling, talk to your inspectors to learn about the insulation present and discuss if any changes are needed to keep your power bills lower and your comfort higher.
For several years now in California, having a carbon monoxide detector has been required in virtually all homes in The Golden State. This is not a point of sale requirement. It is a requirement for all residential dwellings which burn gas in any capacity (stove, furnace, etc.), or have a fireplace, or an attached garage as a matter of public safety. They are exempt in all electric homes that do not have an attached garage or fireplace.
Where are the carbon monoxide detectors to be placed? The carbon monoxide detectors should be on every level of the home, including the basement. If you live in a multi story home with the garage at the bottom, you do need one at that level also (just inside the door, once you are in the habitable area) as well as on the main floor, bedroom floor, and any other level you may have. In a single story home, just one carbon monoxide detector is sufficient.
Additionally, carbon monoxide detectors need to be in the bedroom area of the home. If a bedroom has a gas fireplace or wood burning stove (or any other fossel fuel source of heat), there must be a CO detector in the room. Otherwise, in the hall is fine. If bedrooms are not all in one part of the home, there needs to be a detector near each bedroom.
The cost of the device ranges considerably – from less than $10 each to more than $200 each. Some are plug in, some battery only, some feature LCD displays. Some are combination smoke detector & carbon monoxide detectors. Nest makes a CO alert, too. We put a First Alert detector in our house, and the cost was around $20 – $30, but there are many brands from which to choose. (You can also buy portable CO detectors.)
Once installed, it should be checked periodically (along with your smoke detectors) to make sure that it is functioning properly.
Remodeling your home? When you apply for permits, be aware that the city or county inspector who visits your property will be looking for smoke and carbon monoxide detectors. If you don’t have them where needed, your remodel will not pass inspection. Your inspector will need to return, and normally that results in an extra cost to you.
Carbon monoxide poisoning can be very dangerous, to the point of death. If you don’t have a detector, go get one immediately.
From the CalFire site (pdf):
From the City of San Jose: http://www.sanjoseca.gov/index.aspx?NID=5344