Cambrian months of inventory

Cambrian Park Plaza SignThe Cambrian area of San Jose, like much of Santa Clara County, is a very “hot market” overall, but it can be confusing to know how hot it really is because there are multiple school districts – and schools are probably the number one driver of home values in this highly educated valley. On top of that, the market was hot before the pandemic began in the spring of 2020 and has become even more fierce since then with heightened demand and almost no inventory. The best homes across all of Cambrian are selling quickly and with multiple-offers.

An explanation of “months of inventory”

What does “months of inventory” mean? This figure references how long it would take to sell a property if homes continued to sell and close at the current pace with no new inventory coming on the market. A good analogy is to consider a bathtub which drains. If you add no new water to the tub, how long will it take to empty out?

The months of inventory is sometimes called the absorption rate. The question is simple: how long will it take for the current inventory of homes for sale to get absorbed by the home buyers purchasing them? It doesn’t have to be calculated by months. It could be in days, weeks, or years. But months is probably most common.

The months of inventory for any part of the real estate market can vary, depending on many factors, including age of home, house size, lot size, and school district, whether or not there’s a pool, and many other things. It can be very useful to understand this metric when selling a Silicon Valley home. I’ve done market numbers crunching tied to the specific characteristics of a property (say, small yard with pool or big yard with no pool) to find the impact of those characteristics on the probability that a home will sell – or how fast.

The Cambrian area of San Jose’s months of inventory as a whole, and in one price point

Cambrian was once an enormous zone of the Santa Clara Valley. Today we mostly think of it as within San Jose in the 95124 and 95118 zip codes. Part of it is adjacent to Campbell – a very tiny sliver is IN Campbell, and a tinier still area is in San Jose and within the Campbell School Union District! However most of this area is in one of three elementary school districts: Cambrian, Union, or San Jose Unified.

Here’s the breakdown of the charts below – first, sales and active listings for single family homes in ALL of Cambrian (MLS area 14 for my Realtor readers) and then by elementary school district. Below that, we will narrow this down to active and sold listings only in a price range of $900K – $1.2M, the entry-level price point for single family homes in this market. The part of this area within Campbell Elementary is so small that the numbers are usually not statistically useful (no offense to the Campbell school residents), and frequently there is no usable data for it anyways.

The Latest Update: February 25, 2022

Please have a look at the latest chart. While Cambrian Elementary has the fastest MOI, the majority of sales and listings are happening in the highly sought after Union school district! Once again San Jose Unified holds the majority of the lower-price market, practically monopolizing it on our chart. That said, there’s almost nothing selling in that price bracket any more, and all 4 sales in the last 60 days went over $1M. All areas are showing extremely fast turnover with market absorption remaining below 1 month across the board.

Cambrian MOI by school district 0-60day 02-25-2022

 

Homes are flying off the market this winter. A majority of sales and active inventory are coming from the Union Elementary School District, followed by San Jose Unified with roughly half the sales and inventory. On the other hand, the Cambrian Elementary District has fewer sales and active inventory, but is a very active market (currently the second fastest MOI overall) and is significantly hotter than it has been in the past few years. Inventory remains low and struggles to keep up with the high levels of demand fueling a hot seller’s market in San Jose’s Cambrian district.

 

Below we have past charts for comparison. I usually do this analysis a few times a year, and it is good to see the long view.

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Silicon Valley’s real estate market by school district: Santa Clara County

Today I want to share with you some stats provided by my real estate brokerage, Sereno Group. One of our own has crunched the numbers by school districts across various counties. Schools are a major driver in the real estate market, often more than zip code or city name, so here’s a very valuable approach to understanding the local housing market a bit better: a view from the vantage point of school districts.

Most of Silicon Valley is in Santa Clara County, followed by San Mateo County and a few neighboring areas. (It is sneaking into San Francisco and has also been present in pockets of Alameda and Santa Cruz Counties also.) Today, I’ll just focus on Santa Clara County.

Many cities or towns have multiple school districts. For instance, in Los Gatos, students may be served by Campbell, Los Gatos, or Union schools – depending on the address. San Jose, being the largest city in the county, has far more school districts than that.

First up, here are the numbers for Santa Clara County by high school district, a market update for May 2020:

Santa Clara County real estate market by high school district 2020 single family homes

 

Continue reading to see Santa Clara County’s real estate market data sorted by elementary school district.

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Cambrian months of inventory by elementary school district

If you are house hunting in the Cambrian area of San Jose, you are probably aware that home prices and the real estate climate generally differ based on a number of things, but the most important factor of all is the schools.   While it is helpful to view the Cambrian real estate market as a whole, it’s more accurate to look at a smaller segment of that realty market and study it by school district.

One data point we use to analyse the market is the absorption rate, or months of inventory.  The question is this: if no new inventory came on the market, how long would it take for the current supply of houses for sale take to sell, if sales continue at the same rate?  For this we look at the currently available list of homes for sale (some people including pending with contingency in place, but nearly all of these do close, so I omit them) and also those of the same criteria which have sold and closed escrow in the last 30 days.  The same study could be done on a weekly basis rather than monthly, but with such small numbers of inventory, that would likely not be so reliable.  I ran these numbers from MLSListings.com this morning?

Cambrian Months of Inventory

Cambrian months of inventory by elementary school district as of 2-5-2016

 

Cambrian as a whole has 1.07 months of inventory – that’s pretty good if you are a seller, and a bit scary if you are a buyer.  A closer look, though, and you see quite a huge difference between either the Cambrian or Union School District, which both have a very brisk .83 months of inventory, versus the homes in the San Jose Unified School District area, which are moving at 3 months of inventory – a great market for most of the U.S., but sluggish compared to the other areas.

For a home owner wanting to sell in the SJ Unfied section of Cambrian, this is critically important information to understand so that you don’t overestimate the enthusiasm for your house.  It is going to be more important for you to price aggressively, stage well, market thoroughly than in the other areas, which may be more self-selling due to the very high quality of the public schools.

For a home buyer wanting to purchase in any of these areas, knowledge is power!  You might be able to get away with contingencies in your offers in the San Jose Unified neighborhoods as you may be the only offer in some cases, but that may not get you into your next home in the more competitive areas where many people are just trying to get their children into excellent schools and you’ve got multiple offers and overbids in that superheated market.   (We Realtors do not love seeing our buyers get into contract with few or no contingencies, by the way.  We prefer where there’s a little more balance.  This imbalanced situation is a classic case of supply and demand: too much demand, not much supply.)

Finally, it should be noted that schools are a major driver all of Silicon Valley.  I have similar studies, using high school districts, for Saratoga (on this site) and Los Gatos (on the Live in Los Gatos blog),  if you’d like to check those out also.  Because those areas have a really big spread in pricing, the absorption rates have been considered by price point too.

Check out what’s happening in the Cambrian market in the map below.

 

 

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What does it cost to buy a home in Saratoga? Are there any affordable homes for sale?

Orchard and Hills in Saratoga, CaliforniaSaratoga is a scenic, historic city with great schools, parks, beautiful neighborhoods and a very attractive downtown, “the Village“. This upscale community values its rural nature, and at the same time is home to some of the most expensive estates in Silicon Valley.  A typical house in average condition may cost anywhere between $1,500,000 to about $1,900,000 in today’s market.  Condos will usually be well under a million dollars, though sometimes over.

But does the fact that the normal price is so high, or that there are luxury homes, view homes & estates in Saratoga make it out of reach for everyone?

Not entirely.

Although best known for its tony neighborhoods, there are opportunities to purchase in this highly sought after and well regarded city without spending a million dollars or more.  Nothing in Silicon Valley is inexpensive, of course, and Saratoga is no exception, so the cost of housing here must be viewed in relation to the region as a whole.  It is certainly possible to buy a home in Saratoga for under $1,000,000. Today we’ll look at the strategies for getting in at the smallest price possible.

More and less expensive: school districts and location in Saratoga

Saratoga, like much of Santa Clara County’s cities and towns, has a fewl school districts.  Several things drive home values, but a key driver is the school district.  Areas where the local public schools have high API scores (all level of schools over 900 API) will command a premium – namely the area with the Saratoga or Cupertino schools.  Looking for a more affordable part of this lovely city? Consider the section which is served by Campbell schools or the Campbell Union High School District (the northeastern part of town).

Even within the Saratoga or Cupertino school areas, there are tiers of pricing.  Homes will be very highly valued if they are in close proximity of Saratoga Village (what some would call “walk to town”).  Also well regarded are neighborhoods which are very close to schools, shops, parks, or anything attractive.  The areas west of Highway 9 or Saratoga – Sunnyvale often sell for a bit more than those further from the hills too.

Something else to consider, especially in a market as tough as the current one, is choosing a home with a “location issue” such as being next to (or backing to) a busy road, too close to a shopping center or freeway, etc.  There are often very good discounts to be enjoyed when buying a house adjacent to something not ideal.  If you are not someone who spends a lot of time outside, this may be a great compromise for the budget minded home buyer, since often with double pane windows, it’s nearly impossible to tell indoors when the windows are closed.

Property type, size and condition in Saratoga

Condominiums and townhouses are often a great alternative for Silicon Valley home buyers who’d like to own, rather than rent, and enjoy the benefits of living in a wonderful community like Saratoga without either the maintenance or the cost of purchasing a house with a yard to look after.

Sometimes there are very tiny houses, or cottages, too.  In 1996 I sold a 1-bedroom house that was all of about 800 square feet on 4th Street in Saratoga. Not surprisingly, it was later torn down and a brand new house was built in its place. (more…)

Finding the best deal on homes with exceptional schools in Silicon Valley

How can you get the most “bang for your buck” with Silicon Valley homes when schools are your top priority?

Santa Clara County Realtors know that the performance of local schools is often the leading factor which drives housing values. Different families have different wants and needs, so sometimes it’s not all (or just) about the API scores. (On a related note, consumers please note that real estate agents aren’t API experts and we will not have the exact scores of all schools memoriezed, but we do know how to obtain that information online and elsewhere.)

Because school district boundaries are not identical to city boundary lines, often times there’s confusion about which neighborhoods belong to which school. By understanding this small quirk, you may be able to save many thousands of dollars.

For instance, Cupertino Schools are very highly regarded. But you may not have to be in Cupertino to enjoy the benefits of the district! Part of San Jose (in the 95129 zip code) is part of the Lynbrook High School area. Prices are noticeably lower with the San Jose address.

Likewise with the highly esteemed Los Gatos Schools, the boundaries of the district don’t line up with the town’s boundaries. Hard to imagine, but one little corner of San Jose (in Almaden Valley, off Guadalupe Mines Road) actually belongs to the Los Gatos School district. Homes are less costly in Almaden than in Los Gatos, so this is another great bargain if schools are the most important thing to you.

There are less dramatic examples too, such as homes with a Los Gatos mailing address belonging to Saratoga schools, or Los Altos homes being in the Cupertino school area.

Experienced agents, like those of us at Luxor Real Estate Group, know about some of these “fine points” in Silicon Valley real estate and our knowledge can provide you with a distinct advantage in home buying. Please call us today for help in getting started or continuing your homebuying.

 

 

 

Buying a Home Based on The School: It Doesn’t Always Work in Silicon Valley

Homebuyers sometimes call or email me, explaining, ˜I want to buy a home so that my child can go to Williams Elementary in Almaden Valley or ˜I want to buy a house and have my kids attend Alta Vista Elementary School in Los Gatos or ˜If I purchase a condo in downtown Saratoga, my son or daughter will be able to attend Saratoga Elementary School.

Usually.

But its not guaranteed. Schools tend to drive real estate values here in highly educated Silicon Valley. But we dont have as much control of this slippery issue as most might think.

It is a big mistake to believe that if you purchase a home in a certain location, you’ll be guaranteed that certain school. Lots can happen.
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