Why are some HOA dues so high in certain Silicon Valley townhouse or condo communities?
If you are shopping for a Silicon Valley condominium, townhouse, loft or other property that’s part of a home owners association or “HOA”, you may find yourself flabbergasted at some of the dues being charged in San Jose, Los Gatos, Saratoga, and all over Santa Clara Valley. Today we’ll go over what may be happening in them to cause this problem.
What HOA dues cover
HOA dues may cover a number of things, and if it’s a luxury complex with luxury amenities, those dues will be high:
common areas, such as driveways, parking, pool, fitness center, rec room, elevators, landscaping, golf course membership, etc.
insurance: regular homeowners or blanket insurance but perhaps also earthquake or flood insurance
reserve account funds for planned improvements may have run too low and need bolstering (repainting, termite work, reroofing, repaving, pool plastering etc.)
covering the defaults from units where the owners are in or about to be in foreclosure
some dues cover water, garbage, and possibly other utilities
special assessments for balcony or elevated wooden elements repairs
special assessments from unforseen insurance demands
Today most HOAs in California have underfunded reserve accounts. Ideally they’d have 70-100% of of the target number allotted to date, but 75% of all HOAs in the Golden State aren’t keeping up. To those boards, it seems silly to tie up today money that may not be needed for 20 years.
In the last few years, insurance has become an increasing problem for HOAs. Many insurance companies no longer want to write policies in California due to the fire risks, so we are hearing of condo and townhome communities loosing their insurance over the types of roofs or the t ypes of electical panels installed. If the insurance policy is canceled due to concerns over one of these issues, or over the fire zones, it may cost several times more in the new policy. Often that means going to the California Fair Plan and then adding a wrap around policy.
HOAs that are forward looking will try to get ahead of insurance cancelations by refoofing or addressing the electrical panels or whatever issue is in their control that may be an obstacle to regular insurance. Fixing these things is expensive – expect a large special assessment – but in the long run it’s cheaper than paying the high risk pool insurance costs.
Depending on the age of the property and the amenities, the dues may run between $400 and $500 on the low end (newer, no amenities) to close to a thousand on the high end (The Villages retirement community has extraordinarily high dues but they may include membership in the golf course too). I’ve seen some in Menlo Park closer to $2,000 per month!
“Normal”HOA dues woud be anywhere from $500 to $600 per month for a typical condo or townhome community.
Dues over $700 per month will deter investment buyers. Dues over $800 per month may deter most buyers
There are several things to beware of when buying a condo or townhouse.
First, and perhaps most importantly, you’ll want to learn about the finances:
how well funded are the reserve and operating accounts?
are special assessments planned?
how many of the members are in default, because this may ultimately cost you with special assessments. Right now that’s not a big problem, but between 2008 and 2010 and a little later, it was an issue.
Second, you’ll want to check out the grounds and common area items to see if it looks like the community is being well maintained. Do the buildings have peeling paint, patches of grass without lawn, and overgrown shrubs? If so, those are “red flags”. If there are elevated wooden elements (balconies, stairs, walkways), do they look well maintained? There should be an inspection of a representative sample from each community and that should be a part of the HOA paperwork. Check it out – repairs can be costly.
Finally, if you’re serious about purchasing a home in that community, read the minutes, newsletters, the reserve account, budget, and the rest of the Home Owner Association paperwork. Yes, it’s tiresome and probably 2-3″ thick but it’s important. (Imagine buying the home and not reading these but later discovering they don’t allow dogs – and you have a large lab! Bad all around. ) The HOA docs will give you insight on the budget and whether any special assessments may be needed down the road.
It’s also wise to hire an expert to analyze these things for you. Most Realtors don’t have the training or skills to interpret them, but a specialist does. CA Datasource is one such company and we’ve had goood experiences with them.
The City of Santa Clara sits in the heart of Silicon Valley. It’s got a little bit of everything, including history, museums, a highly regarded university and California mission, beautiful neighborhoods, industry, shopping, and entertainment.
The City of Santa Clara’s major attractions for residents
Today the City of Santa Clara is well known for Mission Santa Clara, Santa Clara University, the Great America Theme Park, neighborhood & civic swimming pools and competitive swim teams, and of course high tech companies such as Intel, Applied Materials and Texas Instruments (among others).
Within the San Francisco Bay Area, the construction of the Levi’s football stadium in the City of Santa Clara has been huge in raising the city’s profile in the eyes of sports enthusiasts. Helpfully, it’s on the light rail line! The Santa Clara Convention Center is a big draw, too.
For many Silicon Valley workers, one of the biggest advantage to Santa Clara is the shorter commute times it tends to afford. Or access to CalTrain and VTA (and eventually BART). For some, it may also be newer construction and a pedestrian-friendly neighborhood at the Rivermark area. And others may want to live in Santa Clara near Valley Fair and Santana Row.
Santa Clara packs a lot of advantages for a city of only about 130,000 people!
The San Tomas Woods neighborhood has tons to offer, including a very convenient location and a community of well manicured homes. Plus, of course, it enjoys the benefits that living in Santa Clara confers, such as the city owning its own utilities, the abundance of parks and kids’ swim teams, and convenience for tech commutes.
Tanoak Drive is the main entrance to the subdivision, and part of it is divided with an attractively landscaped island. That road also includes sidewalks. Much of the neighborhood, though, does not. Here you don’t find the leafy canopies that often line roads in the sidewalk strips, the land between the sidewalk and the road. Some homeowners have planted trees, and they really add to the feel of those streets.
Looking to learn more about Santa Clara neighborhoods? Also check out our post on the University Square neighborhood (also on this site).
Where is San Tomas Woods?
Map by Google, neighborhood boundaries and overlay by Mary Pope-Handy using Google MyMaps
Unsurprisingly, the San Tomas Woods neighborhood sits alongside San Tomas Expressway. The neighborhood borders are San Tomas Expressway to the east, Pruneridge Avenue to the south, just one set of homes before Forbes Avenue to the north, and just a little east of Luther Drive. The nearest major landmark is the Pruneridge Golf Club.
Almaden Valley in San Jose is comprised of many neighborhoods and subdivisions. One of them, close to the border with Los Gatos and Cambrian Park, is particularly popular: the Oak Canyon neighborhood.
There are many reasons for its draw among Silicon Valley home buyers: the houses were well built by Shea Homes in about 1980, so they are relatively newer by Silicon Valley standards. They’re larger homes on comfortable lots, often 8000 sf or so but some as small as 6500 sf and others larger than a quarter acre in the Oak Canyon corner of Almaden.
Most of the homes boast a 3 car garage, which is a big help with storage of stuff, if not storage of cars. The roads gently turn, which makes a more pleasing look. It’s a very “conforming” neighborhood where everyone keeps up the homes and yards. Much of Almaden is viewed by consumers as somewhat remote, but this section, near the mouth of Almaden, is not too deep into the valley and is a better commute location for most. One of the largest pulls for the area, though, is the nearby elementary school, Guadalupe School, which has an excellent reputation for quality education and ranks exceedingly well on testing.
Where is the Oak Canyon neighborhood in Almaden Valley, San Jose?
Oak Canyon is found near the intersection of Camden Avenue and Coleman Road in San Jose but is bordered by Coleman on one side and the Guadalue Creek on the other sides. (The far side of the Guadalupe Creek at this point is Cambrian Park.) Just the other side of Coleman Road is the Montevideo neighborhood, and next to that is the Almaden Meadows neighborhood.
Map data: Google, boundaries by Mary Pope-Handy.
And to provide some bearings, here’s a map of the Almaden Valley district of San Jose generally:
The University Square neighborhood in Santa Clara is walking distance to Santa Clara University. I grew up there, riding my bike in the forbidden college walkways, and recall my Realtor mother referring to the area as “Little Professorville.” That was a reference to a lovely Palo Alto neighborhood in the shadow of Stanford University. She wasn’t wrong – we knew some professors who walked to SCU each day from that neighborhood, including my grandfather.
Where is the University Square neighborhood?
The neighborhood may not have exact boundaries, but appears to be bordered by Park Avenue on the east, Washington Street on the west, the University to the north, and Newhall Avenue to the south.
The area closest to the campus is fairly congested, both with density of housing and the amount of cars parked everywhere. This is where you’ll see the reminder that it’s a quiet, residential zone.
Map data: Google, neighborhood boundaries and overlay by Mary Pope-Handy.
A drive through the area will make it clear where there are tons of cars – and where it’s less congested.
Get past Poplar, though, and suddenly it’s a completely different feel, with almost no cars on the street and homes being spread further apart.
The homes found between Washington and Park, and along Alviso Street, are mixed architecturally. Some streets, like Circle Drive and College Avenue, are primarily ranch style houses built from 1955 – 1950 (some of the county records say 1900 – that just means they lost the records and don’t know!). Some of these have been expanded tremendously. The house I grew up in as a child was 1400 square feet, but it’s been added onto a couple or more times and is now more than 3000 SF.
Is it a good time to sell a home in Silicon Valley? One of the best ways to get a pulse on the real estate market with an eye to selling or buying is with the months of inventory (MOI), also known as the absorption rate. This is the months of supply of housing for sale.
The months of inventory tells us how fast the current inventory of properties will be sold off if sales were to continue at the same rate with no new inventory were to come on the market.
The easiest analogy is with a bathtub full of water. If we added no more water to the tub, and the drain were opened, how much time would it take for the water to be depleted if it continued to empty at the same rate? That’s the question being answered with the absorption rate of inventory.
Or, simpler still, if you have an hourglass that you turn over, how long does it take for the sand to empty from the top (since you cannot add more sand to that end)?
How to calculate the months of inventory or MOI
The way to calculate the months of inventory is simple: find the current available inventory of homes for sale (not under contract or sale pending), then find the number of homes with that exact criteria which have closed escrow in the last 30 days. Divide the first by the second and you get the months of inventory. Or, I can just use the stats program on the MLS to generate that number, as I did today.
Earlier I pulled this data from MLSListings.com, our local MLS association (of which I am a member) and I ran the numbers for single family homes (houses and duet homes) in Cupertino, Los Altos, Los Gatos, Monte Sereno, Mountain View, Palo Alto, San Jose (all areas combined), Santa Clara, Saratoga, Sunnyvale. Separately, I also ran this same query for the City of San Jose by district.
The months of inventory by city or town in Santa Clara County
A balanced market for our area is 2-3 months of inventory (for most of the US it’s 4-6 months). Two months or less is a seller’s market, and one month or less is a very hot seller’s market.
Here’s a look at the months of inventory by city or town in SCC in April 2023 for single family homes. As you can see, the vast majority of the county is a strong seller’s market, with the only exception being Los Altos Hills.
Which are the hottest markets? They’re the ones with the smallest months of inventory -Sunnyvale, Santa Clara, Cupertino, Milpitas and many more are well under the 2 month market. A few are a tad higher and in the “balanced market” area, and only one is in a deep buyer’s market.
The months of inventory by area within the City of San Jose
Whether you call it the San Jose area, Santa Clara County, Silicon Valley, The South Bay, or even the old moniker of “The Valley of Heart’s Delight”, there is a lot to love about living here. I’ve put together a gallery with a taste of the residential communities in and near San Jose, including Almaden, Willow Glen, Cambrian, Evergreen, Los Gatos, Saratoga, Monte Sereno, Campbell, Cupertino, Santa Clara and more. Sit back and enjoy the photos!
Naglee Park home – S 14th Street
Walkway to 6922 Chantel Court, San Jose CA 95129
Enchanting Mediterranean style house in the Rose Garden area
Lovely Spanish style house in the Rose Garden area of Central San Jose
A two story home with a detached garage, which is typical in the Rose garden.
Evergreen the Ranch subdivision 1
Charming English Tudor style house
A charming Spanish bungalow in Japantown
Silver Leaf Park in the Santa Teresa area of San Jose
The Buddhist Temple in San Jose’s Japantown – one of only 3 Japantowns in the US
Evergreen The Ranch view of Downtown San Jose
Saratoga rural ranch luxury
Remodeled, expanded Saratoga home with guest cottage MLS #ML81547144
It’s possible to live in Silicon Valley and have no idea that there are still some original adobe houses to be found right here in the San Jose area. Today, though, I hope to help some of our residents discover the past which is lurking right in front of us!
The historic Adobe Woman’s Club is just a block or two off the campus of Santa Clara University, tucked away on a side street now that The Alameda is re-routed as The El Camino. Address: 3260 The Alameda, Santa Clara. According to the state’s historical preservation site, this state landmark # 249 is one of the oldest in the Santa Clara Valley, was built between 1792 and 1800 and was one of many row houses built for the native Americans who worked at Mission Santa Clara. Please note that this is private property and you may not enter without permission, but the adobe abode is very visible from the sidewalk.
Today the beautifully preserved adobe house functions as a nonprofit group with these objectives: “to promote educational, moral, social welfare, cultural, civic and community service. Anyone who supports these objectives is welcome.” This scenic place can also be rented out for private events. The garden is quite lovely and the interior appears to be very modern. You can see photos of the inside of the house at the club’s website: The Santa Clara Woman’s Club.
If you arrived into Silicon Valley via Highway 101, driving south from San Francisco, you might believe that the Santa Clara Valley, the San Jose area and Silicon Valley as a whole has got to seem to be the ugliest place on earth. Although heavily traveled, that is not the “scenic route”.
So, too, if you are looking for a place to live and are groping to find a place that is reasonably priced, fairly safe and not a terrible commute distance. You might not even have “is nice looking” on your wish list. You might not think it’s possible if all you ever see are the ugly concrete tilt-up buildings in north San Jose, Santa Clara, Alviso, or anywhere along the 237 corridor. That area is an architectural wasteland.
Let me assure you: there are a lot of beautiful, scenic places in Silicon Valley where you can rent or buy a home. But how do you find them? It helps a lot to have a local give you a few pointers. I’ll give you some tips today on finding a scenic place to live.
Types of Scenic Places in Silicon Valley
Hills – An easy way to find a scenic location to make your home is to settle near the hills, especially those in the west valley (the Santa Cruz Mountains or the Coastal Range) as they are green year-round. Communities at the base of the west valley foothills include, in Santa Clara County, Palo Alto, Los Altos, Los Altos Hills, Cupertino, Saratoga, Monte Sereno, Los Gatos, and the Almaden Valley area of San Jose. All of these areas are adjacent to the hills or mountains and offer far better than average schools (many of them qualify as great – compare costs between these areas). (more…)
Today I’m sharing with you Silicon Valley real estate statistics which were presented to me by my company, Sereno Group. These are “by school district” and I think you will find them immensely insightful! First, though, a brief commentary on the overall findings, then statistics for single family homes (mostly houses but a few “duet homes”) in Santa Clara County, and lastly, the same info but for condominiums and townhouses.
Please find the real estate market statistics by school district in the Santa Clara County area next. Please note that the San Jose Unified School District is extremely large and varied, and the numbers would be very different if you were narrowing it to Almaden Valley with Leland High School as opposed to some areas which are not performing nearly as well.
Helping nice folks to buy and sell homes in Silicon Valley
Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES
Christie's International Real Estate Sereno, Los Gatos, CA 95030 408 204-7673 Mary@PopeHandy.com License# 01153805
Clair Handy, Realtor
GREEN
Christie's International Real Estate Sereno 214 Los Gatos-Saratoga Rd Los Gatos, CA 95030 ClairHandy@sereno.com License# 02153633
Mary & Clair sell homes throughout Silicon Valley: Santa Clara County, San Mateo County, and Santa Cruz County. with a special focus on: San Jose, Los Gatos, Saratoga, Campbell, Almaden Valley, Cambrian Park.
The real estate search
Use this link to browse properties which are for sale, under contract (pending) or sold. Want to view only homes which are available now?
Mary Pope-Handy, Realtor ABR, AHWD, CIPS, CRS, SRES Christie's International Real Estate Sereno DRE License #01153805 408-204-7673 mary@popehandy.com “Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Clair Handy, Realtor, GREEN Christie's International Real Estate Sereno DRE License #02153633 408-721-6160 clairhandy@sereno.com “Helping nice folks to buy and sell homes in Silicon Valley”
This is the Valley of Heart's Delight blog , covering Silicon Valley real estate - Santa Clara County, San Jose, Los Gatos, Cupertino, and nearby communities in the South Bay Area and lower Peninsula. Find info on neighborhoods, disclosure issues, buyer and seller tips, and housing market conditions in the west valley and most of the county.Please also see my other websites and real estate market statistics site, which are listed in the sidebar, above.
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Mary Pope-Handy, Realtor ABR, CIPS, CRS, SRES Sereno DRE License #01153805 408-204-7673 mary@popehandy.com
“Helping nice folks to buy and sell homes in Silicon Valley since 1993”
Why are some HOA dues so high in certain Silicon Valley townhouse or condo communities?
The City of Santa Clara sits in the heart of Silicon Valley. It’s got a little bit of everything, including history, museums, a highly regarded university and California mission, beautiful neighborhoods, industry, shopping, and entertainment.
The San Tomas Woods neighborhood has tons to offer, including a very convenient location and a community of well manicured homes. Plus, of course, it enjoys the benefits that living in Santa Clara confers, such as the city owning its own utilities, the abundance of parks and kids’ swim teams, and convenience for tech commutes.
The University Square neighborhood in Santa Clara is walking distance to Santa Clara University. I grew up there, riding my bike in the forbidden college walkways, and recall my Realtor mother referring to the area as “Little Professorville.” That was a reference to a lovely Palo Alto neighborhood in the shadow of Stanford University. She wasn’t wrong – we knew some professors who walked to SCU each day from that neighborhood, including my grandfather.
