Multiple offers are common right now in Silicon Valley

Multiple offers are common - sellers and listing agent discussing the open house and biddingMultiple offers are common right now in the Silicon Valley real estate market. With them typically come overbids and sky high sales prices. Clair and I have shown several homes that our buyers did not bid on but which got many offer contracts and which sold for 15 – 20% over list price just over the last 30 days or so.

The hottest part of the market seems to be properties under $2 or $3 million, depending on the area.

When there are tons of buyers lining up to purchase a home, the sellers have usually put a substantial amount of time, energy, and money into making their property look fantastic, and they also take a risk in pricing it low to attract a large number of home buyers.

Multiple offers are common when property sells fast – but it doesn’t always!

When there aren’t multiple offers, it could be location issues, condition of the property (or neighborhood), overpricing (the most common culprit), difficulty in viewing the home, or other missteps on the selling side.  Buyers today want a turnkey home in a superior location that’s in great shape – not remodeled 20 years ago or more – and they will pay a premium price for it.

When homes have been on the market for 3 weeks or more, this may be a great opportunity for buyers to be the lone bidder on it. Does it have the right things wrong? Can what is off be fixed? Is it only overpriced? I would suggest buyers focusing on all of the inventory and not just the hot new inventory.

Why is it that multiple offers are common now?

There are a couple of reasons why homes that are in great shape, priced low, and given good exposure to the market are selling so strongly now.

  • First, there is a dire shortage of inventory, or lack of supply.  This is a chronic problem, but it’s acutely so now due to the higher interest rates and home owners not wanting to sell. It’s unlikely for this to change anytime soon, unfortunately.
  • Second, because Silicon Valley residential real estate has a long track record with good appreciation, those who can buy want to do so. Many are empowered by the rising stock market. If they are here for the long haul, buying makes more sense than renting.
    • Many are purchasing with more than 20% down, and they will watch for an opportunity to refinance.
    • Others are buying all cash. Those buyers may be anywhere from 15% to 35 % of the successful home buyers.

The inventory crisis will likely improve a little as the year goes on because inventory normally rises with the peak being somewhere in the summer most years.  No guarantee – sometimes it doesn’t behave “as usual”.

How can you tell if a home is going to get multiple offers or what the selling price will be?

These are really two different, but related, questions.
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The Cambrian Park Real Estate Market Update

Cambrian Park Real Estate Market graphicThe Cambrian Park real estate market remains a strong seller’s market.

For those new to the area, Cambrian is most of the 95124 zip code (south of Foxworthy) and most of 95118 (west of Almaden Expressway). It borders Los Gatos, Campbell, Willow Glen, and Blossom Valley.

The Cambrian Park Real Estate Market

QUICK NOTE: Just now I looked at the pending sales online. If we consider only resale, not the homes at Cully Place, there are 25 houses which are pending (no contingencies) and the average days on market for them is a mere 7. The largest days on market is 15! This is an indicator that the market is white hot – pending sales are an early warning to buyers taking their time that conditions are swinging more deeply into the sellers’ favor.

This is very much what Clair and I are seeing across the valley. We’ve learned of many homes that sold within a week in which there were multiple offers, sometimes more than 10, with the resulting sale 15 – 20% over list price! It’s not limited to one area or another but truly seems to be all over, particularly for houses under $ 2million.

The chart below is from the RE Report. Home prices are up both monthly and annually by a solid amount. The sale to list price ratio rose again. It remains a strong seller’s market in Cambrian Park with just 12 days of inventory and 106.6% sale price to list price ratio.

Trends at a Glance

Trends At a GlanceJan 2024Previous MonthYear-over-Year
Median Price$1,755,000 (+0.4%)$1,747,780$1,576,500 (+11.3%)
Average Price$2,032,290 (+6.8%)$1,902,930$1,552,860 (+30.9%)
No. of Sales17 (-45.2%)3114 (+21.4%)
Pending32 (+45.5%)2220 (+60.0%)
Active(+16.7%)621 (-66.7%)
Sale vs. List Price106.6% (+2.0%)104.5%100.0% (+6.6%)
Days on Market15 (+22.8%)1323 (-32.1%)
Days of Inventory12 (+112.7%)645 (-72.5%)

 

 

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Almaden Valley Real Estate Market Conditions

Almaden Valley Real Estate Market Conditions San Jose 95120 - photo with Mt Umunhum in backgroundThe Almaden Valley real estate market is experiencing some up and down, but remains clearly in a seller’s market and much stronger than it was one year ago. Inventory remains perpetually low, so the best homes in great locations are selling like hotcakes while buyers are passing over others that may need more work.

Almaden Valley Real Estate Market Conditions: Trends at a Glance

First, a look at the residential real estate market statistics for Almaden, or San Jose 95120 from the Real Estate Report (a subscription that uses closed / sold data).

Please note that there are 12 closed sales and just 9 active – that ratio tells us that the houses in 95120 are in strong demand. The sale to list price ratio is over 100%, so we know buyers are competing to get these properties, and most are selling with multiple offers.

Trends At a GlanceJan 2024Previous MonthYear-over-Year
Median Price$2,107,500 (-8.6%)$2,307,000$2,387,500 (-11.7%)
Average Price$2,093,880 (-17.6%)$2,541,990$2,693,440 (-22.3%)
No. of Sales12 (-14.3%)14(+50.0%)
Pending13 (+18.2%)1112 (+8.3%)
Active(+28.6%)718 (-50.0%)
Sale vs. List Price101.7% (-0.5%)102.1%95.0% (+7.0%)
Days on Market16 (-27.0%)2359 (-72.4%)
Days of Inventory23 (+50.0%)1568 (-66.7%)

 

 

Altos Research charts for Almaden Valley real estate market, single family homes segment (more…)

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 Willow Glen real estate market in San Jose remains a strong seller’s market.

  • Average home prices are up month over month by 808% and down year over year by 9.1%.
  • Homes are selling in 18 days on average – still hot. This is quite fast for January.
  • The sale to list price rose to 101.9% in January – the market is heating up!

The best priced homes with no location or condition issues continue to sell quickly and with multiple offers and overbids.

Willow Glen Real Estate Market Trends: Single Family Homes

Willow Glen home prices area up monthly, but the average sale price slipped annually. The sale to list price ratio is rising, though, and the market is hot for homes priced aggressively, with good locations, and good (remodeled) condition.

Click for the complete Willow Glen real estate report:

Trends At a GlanceJan 2024Previous MonthYear-over-Year
Median Price$2,226,250 (+24.7%)$1,785,000$2,105,000 (+5.8%)
Average Price$2,156,880 (+8.8%)$1,982,520$2,373,620 (-9.1%)
No. of Sales20 (-37.5%)3212 (+66.7%)
Pending20 (0.0%)2019 (+5.3%)
Active17 (+41.7%)1225 (-32.0%)
Sale vs. List Price101.9% (+3.8%)98.2%98.0% (+4.1%)
Days on Market18 (-29.5%)2536 (-51.1%)
Days of Inventory26 (+126.7%)1163 (-59.2%)

 

And the month before:

 

Trends At a GlanceDec 2023Previous MonthYear-over-Year
Median Price$1,785,000 (-3.8%)$1,855,000$1,600,000 (+11.6%)
Average Price$1,982,520 (+3.7%)$1,912,400$1,726,500 (+14.8%)
No. of Sales32 (-11.1%)3635 (-8.6%)
Pending20 (-28.6%)2812 (+66.7%)
Active12 (-63.6%)3333 (-63.6%)
Sale vs. List Price98.2% (-3.7%)102.0%97.1% (+1.2%)
Days on Market25 (+49.6%)1733 (-24.8%)
Days of Inventory11 (-57.7%)2728 (-60.2%)

 

 

Below please find a market profile and then a couple of charts for the Willow Glen 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 Real Estate Market Trends – San Jose 95125

In the latest update, Altos says single family homes are in a strong seller’s market with rising market action, and a decrease in much needed, perpetually low inventory. As of today, 35% have taken price reductions.

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Santa Clara County Real Estate Market

The Santa Clara County real estate market remains hot, despite weather that has been cold and wet. Few quick points, then the details:

  • Home prices and sales were both up in January 2024 compared to January 2023.
  • Inventory is starting to pick up, however it remains far below normal. As of this writing on Feb 6, there are 600 single family homes for sale in Santa Clara County. Typical inventory between 2012 and 2023 was 1046. (I ran it from the MLS today.)
  • Since August, the current price has been higher than the same month the year before (after the opposite was true Jan – July 2023). Taken as whole years, home prices were lower in 2023 than in 2022, but the momentum is now going in the opposite direction. Home prices are rising.
  • Nearly all stats point to an increasingly hot market.

 

January 2024 sales stats – Santa Clara County real estate market

 

Here’s the RE Report summary table. It’s an excellent summary of our Silicon Valley housing market. January is usually the lowest month of the year, followed by December. Once in a while December is worse than the January that follows it, and in those cases, the month over month numbers look soft.

 

Santa Clara County real estate market trends and statistics at a glance for January 2024

Real estate market statistics

 

Multi year real estate data charts for Santa Clara County real estate market (single family homes)

PLEASE NOTE: to view any of the data tables / images below in a larger version, just click on them and you will be taken to our blog post, where the images are larger (except for the first one). Still too small? Click on them in the article and a larger still version will pop up. 

Months of Inventory

First, the months of inventory. At 1.6 months of inventory is not bad for January. This is one of the softer data points – and it is not really soft.

 

SCC Months of inventory for Feb 2024 - single family homes
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The real estate market in San Jose’s Blossom Valley area

Pan of Santa Teresa and Blossom Valley

Pan of Santa Teresa and Blossom Valley

The Blossom Valley real estate market continues to be a strong sellers’ market into early 2024. Homes in good shape which are priced appropriately regularly sell quickly and well above list price, despite new hurdles for buyers to overcome over the last two years. While trends can vary based on price point, schools, zip codes, etc., the entire area is still in high demand.

Here are some bullet points from the latest statistics:

  • Closed sales are a little ahead of this time last year, but with less than half the available inventory
  • The average sale to list price ratio soared above December, and outpaces this time last year by over +10%!
  • Days on market show a rapid turnover with a 17 day average and slightly faster market absorption (days of inventory) at just 15 days

Often we see month-over-month softening into the new year with lower inventory and demand over the busy holiday season, followed by a late-winter increase in activity as the market moves towards the spring trends. That said, the market remained strong through winter and appears to be experiencing rapidly increasing activity earlier than usual. It’s a hot market in Blossom Valley!

About Blossom Valley

The Blossom Valley area of San Jose is on the south end of the city and covers the 95123 and 95136 zip codes. For our MLS, it’s “area 12.” A more affordable section of Silicon Valley, it has much to offer in addition to more reasonable housing prices. Many areas enjoy views of the Santa Teresa Foothills or the Communications Hill knolls or even the coastal foothills in the distance and Mt Umunhum. One corner of it sits alongside beautiful Almaden Lake, too. Another corner is located at the crossroads of Highways 85 and 87, making it an easy commute destination for those working in downtown San Jose. And there’s an abundance of shopping and dining opportunities.

Now for some market data.

Live Altos Reports

We’ll start with the Altos Reports, which gague the market based on active listings, not sales, and is updated about once per week.

95123 real estate market trends, automatically updated weekly:

Blossom Valley Real-Time Market Profile by Altos Research

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Why do you keep losing out on multiple offers?

A crowd running to an open house - many of these losing out on multiple offers

Multiple Offers

Are you losing out on multiple offers? If it’s happened repeatedly, you may be hoping for a lucky break. But luck usually has nothing to do with success.

The real estate market in Silicon Valley is a hot seller’s market, and that means that often there are multiple offers, overbids, and sales with no contingencies. This is often the case with homes that sell in 2 weeks or less. Some buyers may get it on the first attempt, but many are bidding over and over – why do they keep losing out on multiple offers?

Over the course of my career, I have noticed that often there is a consistent “spread” of offers.  Most of the time, there’s a pack or band of offers at about the same level, sometimes 10% or more over list price, then a couple higher that that, and maybe one or two (once in awhile 3) at the top of the heap in terms of both price and terms which are attractive to the seller.

(There’s a video with my commentary on this below.)

Not everyone is losing out on multiple offers: what are the winners doing?

  1. The top offer frequently has the highest price and best terms. They aren’t losing out on multiple offers because no one else was willing or able to write such a high, strong contract.
    • It is 10-20% over list price or more, 25-30% down at least, and has no contingencies for inspection, loan, and most of all, appraisal (the percentage over has to do with whether the home was priced spot on the value or strategically under). Please see the video below for more on these items.
    • The winning offer’s buyers and agent followed directions. Normally that means that they come with all disclosures signed, and the buyer’s agent has even done her or his Agent Visual Inspection Disclosure. They include the proof of funds (all needed) which prove that the buyer can absorb any appraisal shortfall and is prepared to do so.  Sometimes the listing agent asks for a particular contract to be used or a particular summary sheet to be filled out. The best agents do all of that. The 2nd tier offers often are incomplete – the listing agents may or may not circle back and ask about missing items, so it’s important to remember that you only get one chance to make a first impression.
  2. The best offer is also someone who’s been SURE that he or she or they wanted the home from the very beginning and looks ROCK SOLID. NO WAVERING, not a “last minute” offer. Any hesitation on your side will cause the seller to not feel good about your odds of closing the sale. Be consistently interested if you want the sale. A shaky looking buyer may not include their proof of funds. They don’t come across as certain about buying this property and need a few days to see the property again, or show it to their parents, or otherwise confirm the decision to buy. Their agent is not so thorough. If the TDS is not fully signed off, is the buyers’ agent trying to sneak a 3 day right of cancellation into the contract? The best buyer’s offer doesn’t look shaky – it looks dead set on buying the home and has done everything possible to convince the seller of their conviction and competence.
  3. The second best or next runner up is usually strong on terms (at least 25% down, few or no contingencies) but perhaps made an offer price a little under the top value.  Sometimes the next runner up has a good price and mostly good terms, but something is not quite as solid – they didn’t offer to put the deposit into the escrow account the next day, they didn’t check all the needed boxes in the offer, they have a contingency when all the competing bids have none..  If the offers are tied but one buyer has no contingencies and the other has any, that will be the tie-breaker.
  4. Middle of the pack is usually a combination of a price where the home should appraise, a solid down payment, and few or no contingencies. It may be a price that seems “reasonable”. Buyers may feel that it is “a fair offer” or a win-win. Often the fair offers aren’t good enough to take the prize in multiple offers. If you can project what most buyers think a home will be worth, maybe you might want to consider getting ahead of that pack and seeing where the pricing trajectory will take you. The folks in the middle of the pack are usually the ones, together at the bottom, who keep losing out on multiple offers. (They will say things like “we are cautious…)
  5. Bottom offers are under, at, or barely over list price, and include an appraisal contingency as well as others (one for loan or one for property condition). If there’s a rent back, they want their PITI covered.

If you  repeatedly find yourself losing out on multiple offers, try to see your own pattern in this spread.  Is there one thing, or perhaps are there two or more things, you’re just not ready to do?

 

 

What do multiple offers look like to the sellers when receiving an offer? Click to view our post on popehandy.com and take a look at a side by side offer comparison sample.

Why it is so hard

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Cambrian Park: Good Schools, Low Crime, Close to Los Gatos and Campbell

Cambrian Park, or more broadly, Cambrian, is a west San Jose neighborhood or district and is one of the high-value areas in Silicon Valley. The schools are good, the crime is low, and the commute is not too bad.

Cambrian Park Plaza signFor 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. (It may, when the Cambrian Park Plaza redevelopment takes place.)

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 loads of programs (including an after school program for youth), classes, and a fabulous pool.

Altogether, there are about 75,000 to 80,000 residents in Cambrian, spread throughout part of two zip codes, part of 95124 and some of 95118.

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

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Crawlspace access: What is it? Where is it? Why does it matter?

crawlspace access outside First time home buyers may have heard the word crawlspace (or crawl space) but not had a good idea of what it refers to – especially if they have only lived in houses built on slab foundations. So let’s touch on it today.

What and the Where?

When homes are built on a raised foundation, also called a perimeter foundation, rather than slab foundation, there’s space between the dirt under the house and the house itself – often 3′ (but not always), sometimes more.  Unless the structure is built on a hillside, there won’t be enough height to walk around in that space, hence the need to crawl in the crawlspace.

Most of the time, access to this space is indoors and specifically on the floor of a closet, where there appears to be a flat opening of about 3′ by 3′, sometimes smaller.  This can make entry tight.  At other times. the access is via the outside, as with the photo at the left (more likely the case in properties built before 1950 in Silicon Valley than in newer properties.)

Here it’s a lot easier for homeowners, inspectors and repair people to enter – but also easier for animals and pests, such as rats, to make their way in.  Care must be taken, as with the vent screens, to keep unwanted visitors out!

Crawlspace Video

Auditory learner? Or TLDR, and just want a quick-take? Watch this 1min 46 second video to get the summary:

Monitoring the crawlspace

If your home has a crawlspace, you will want to monitor it. (more…)

San Jose neighborhoods

San Jose neighborhoods are spread throughout many districts and even more miles, so it’s no surprise that we see a tremendous amount of variety in landscape, commute length, school quality, and home prices.

San Jose neighborhoods: let’s start with the broad areas and districts

 

San Jose neighborhoods and districts

The major areas in San Jose generally fall into these areas – feel free to plunk any of them into the search bar to learn more, or use the navigation links in the menu for each. These are neighborhoods on a larger scale.

  • Almaden Valley / Almaden – see a list of Almaden Valley neighborhoods with links
  • Alum Rock (together with Evergreen is East Valley, East San Jose, or Eastside)
  • Berryessa / North San Jose / North Valley (North San Jose also includes Alviso)
  • Blossom Valley
  • Cambrian / Cambrian Park – we have many articles on Cambrian Park neighborhoods – check out the list and links
  • Downtown / Central San Jose
  • East Valley (see Alum Rock and Evergreen)
  • Evergreen
  • Santa Teresa
  • West San Jose (not actually a large area, mostly sandwiched between Campbell and Cupertino, but quite a few zip codes)
  • Willow Glen

Or generally by direction:

  1. North: Alviso, Berryessa are “North San Jose”
  2. East: Alum Rock and Evergreen are “East San Jose” (Berryessa is northeast)
  3. South: South San Jose, Coyote (part SJ, part Morgan Hill, part unincorporated), Santa Teresa, Blossom Valley, Almaden (Almaden is southwest)
  4. West: Almaden (southwest), Cambrian, West San Jose
  5. Downtown and Central

San Jose zip codes

What about zip codes for these San Jose neighborhoods or districts?  Almaden has 95120 as its only zip code. Most have at least two (Cambrian is 95124 and 95118 – but not all of those zip codes!). Evergreen has four.  Willow Glen is mostly 95125, but has a sliver of 95124. So it’s messy and defies easy answers except for Almaden Valley.

Each of these larger areas consists of groups of San Jose neighborhoods within them. In Almaden, there are homes near the golf course – the Country Club neighborhood, or others in New Almaden, the oldest part of that section.

How to decide which of the San Jose neighborhoods you should consider?

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