How's the Los Gatos housing market now and over the last two years? The "supply and demand" graph gives a good visual clue as to the challenge of selling in this corner of SiliconValley. Relative to what's on the market, only a few Los Gatos homes are selling. (Charts and data per Clarus Matrix, a perk of our MLS and real estate board.)
Pricing (or "home value") is perhaps the most important thing to home owners. "What's my home worth?" is the question. Prices are improving in some segments of the market - homes "in the schools" and under about 1 million are in very high demand and that may be pushing prices upward.
The "months of inventory" or absorption rate indicates how long it would take Los Gatos homes for sale to be absorbed by buyers if homes continued to sell at the current rate per month and no new inventory came on the market. (Less than 6 months is a sellers market, more than 6 a buyers market.)
The chart below would have us thinking that the sellers are very happy and that homes are fying off the market - the first chart, though, tells the broader picture of supply & demand. What IS happening, then? Some Los Gatos homes in some prices are selling really well, but many others languish.
Inventory is now declining. This is more acute in some price points and school districts than others, but overall, the available supply of Los Gatos real estate for sale is now noticeably less than at the peak.
The average days on market for Los Gatos homes for sale has jumped around quite a bit. We do seem to be past the peak - but with so much "up & down", it's hard to be sure. Let's hope that the worst is behind us.
A look at all the charts collectively would seem to indicate that although the market is tough on sellers and great for buyers overall, as a whole the town may have already hit its bottom. We won't know unless things are stable and continue improving for another year or so. And, of course, this is "general information" for our town. Your particular neighborhood could be behaving very differently since micro markets are very important here. Please call or email me for information on your particular market.
Although a lot of my work is in Los Gatos, Cambrian Park, Saratoga, and Almaden Valley, I do have buyer and seller clients all over San Jose and Silicon Valley. One of my buyers is interested in neighborhoods close to downtown San Jose such as Japantown, the Vendome area, and Naglee Park.
This week we saw a classic, historic Spanish style home that offered a lot of "old San Jose" charm. It was partially updated and remodeled but there were a few red flags and odd things about the home.
One of the oddities involved the roof, downspouts and gutters. Here's a view of the back end of that home. Please note the downspout in the center of the photo (it meanders around the window with a large catch-basin at the top).
Do you see anything amiss? If not, have a look again with my annotated version:
The home was re-roofed a number of years ago, with permits and finals - but without gutters.
In addition to doing a post comparing Los Gatos, Monte Sereno, and Saratoga today, I also did one on just the Monte Sereno real estate market in my other blog at ValleyOfHeartsDelight.com. If you are tracking the Monte Sereno housing market, please have a look at this article, which discusses the days on market, inventory level, percentage of homes relisting, and pricing trends. Find it on the ValleyOfHeartsDelight.com site or click directly on this link:
The real estate market in the high-end communities of Los Gatos, Monte Sereno, and Saratoga has not been as hard-hit on pricing as in the entry level and more affordable areas like Blossom Valley and Cambrian Park, but not nearly as many homes are selling in these areas for that reason. Areas with huge (30-40%) price drops are seeing first time home buyers and investors swoop down, some paying "all cash" to get in on the fire sale pricing. That is just not happening in the tonier neighborhoods of Silicon Valley.
The west valley foothill communities aren't at these kinds of price drops, but if you're a home seller, you certainly aren't feeling like the real estate market is doing you any favors. Prices are down in varying degrees, but overall it is a "rollback" in sales prices of several years and the discount is perhaps 20-30% from the peak for most homes (worse for the luxury home market).
The charts below are from Altos Research (with whom I have a subscription) and prices are LIST prices, not sales prices. The black line represents Los Gatos, green is Saratoga, and orange Monte Sereno, and the timeframe for all charts below is the last 12 months. Properties are single family homes only (houses, not condos or townhomes).
Monte Sereno tends to have the most expensive homes generally of the three communities, and this small city has been hit the worst with price drops because higher priced homes generally have had the biggest damage done to pricing, and more affordable homes have been less hurt by the price cuts.
Again, Monte Sereno has the biggest struggle with the longest days on the market. Saratoga is experiencing a better market. This does not surprise me because I have some homebuyers for that city and we are having a hard time finding much that's within their budget and meets their needs. In Los Gatos, where I also have buyers (different from Saratoga), we are finding a lot of homes are still priced too high for the market, so the buyers continue to wait.
The relisted homes chart is a reflection of how many sellers were unsuccessful the first time around, but the owners really do want or need to sell, so they get the house back on the market. Sometimes it's with a new coat of paint and far better staging, sometimes a much better price, sometimes a new agent and brokerage - or maybe all three.
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Inventory levels are climbing in all three of these expensive Santa Clara County areas. Buyers are having a hard time in most cases because if they're moving up, it's difficult to sell the home they already own due to negative equity and it's also very difficult to get a loan for high end real estate. If sellers can offer financing, that could be very helpful to a lot of buyers (get professional assistance from your Realtor, CPA and attorney before attempting this, though).
Sellers:
Most often, when a home doesn't sell, it's the pricing that is incorrect for the market, though condition (and staging) can have a big impact too. While a few buyers may be willing to pay "top dollar" for a home in average or worse condition, the majority of home buyers will not. Pricing & condition need to be aimed at the bulk of likely purchasers of the property, not the unlikely, rare homebuyer. In this market, when most homes are not selling in Los Gatos, Monte Sereno and Saratoga, that means staging and pricing aggressively. If there's a "better deal" than your home, that's the one the buyer will choose. In this market, the lowest price and best condition "wins" with a sale.
There are things you can do to increase the odds your home will sell and even make your home sell for more:
get the home cleaned, cleared of clutter, and nicely staged (get help and professional advice on this)
make the front yard appealing with colorful annuals, nicely trimmed bushes, and a healthy green lawn - if the front yard looks bad, the buyers will not even get out of their car to see inside your home
make the home easy to show, use a lockbox, do NOT make showings appointment only through the listing agent or yourself
when the home is being viewed by potential buyers, do not be home - your presence will make the buyers uneasy and unable to speak frankly about the house
price your home in the lowest 20% of available homes that are similar to yours - all the marketing in the world cannot sell an overpriced home
Buyers:
While the majority of homes are "sitting" and not selling, the best properties are actually selling quite fast. So if something comes on the market that interests you, don't wait. It may not be there on the weekend for the scheduled open house!
Today's post is general in nature for each of the towns discussed. The market will vary from one price point to the next, one school district to the next etc. Please contact me for assistance with your own particular situation.
Some homes have been on the market and sellers won't reduce the listing price but may entertain an offer significantly lower that the list price. So have your agent inquire or just "write it up" if you like a home.
As noted many times in this blog about Los Gatos real estate, the market is varied from one price point and school district, among other things, to the next.
The homes in the lowest price points and "in the schools" seem to be selling faster. For today's view into the market, let's consider homes in Los Gatos, with Los Gatos Schools, with 3 bedrooms and 2 bathrooms, priced at under $1,500,000.
The days on market or "DOM" for all pendings is a misleading number of almost 100 days. If the average DOM is 100, buyers can take their time, right?
But let's have a closer look and sort the results. If we pull the data apart by the date of the sale (when buyers and sellers agreed on price and terms), a different picture of the market emerges. The average DOM now is 1/3 of what it was for the current pendings PRIOR to June 1st!
Street Address
Bldg SqFt
DOM
Pend Date
LAVENDER LN
2727
6
6/8/2009
CHIRCO CT
1605
128
6/8/2009
CAMELLIA TE
1783
5
6/6/2009
BERSANO LN
2324
14
6/6/2009
BOYER LN
2368
18
6/5/2009
NEW YORK AV
1890
95
6/5/2009
GOLF LINKS DR
3200
20
6/4/2009
SHANNON RD
2650
0
6/2/2009
CARLTON CT
2550
87
6/2/2009
LAS MIRADAS DR
1300
12
5/30/2009
CARLESTER DR
1520
284
5/30/2009
LA CANADA CT
1150
35
5/29/2009
LAS MIRADAS DR
1820
135
5/28/2009
CILKER CT
2856
113
5/27/2009
JACARANDA WY
2750
46
5/26/2009
TOURNEY RD
3438
208
5/21/2009
LONGRIDGE RD
1296
6
5/18/2009
MARCHMONT DR
2179
75
5/16/2009
LOMA ALTA AV
1496
42
5/12/2009
CERRO VISTA DR
1706
18
5/9/2009
SHANNON RD
2060
34
5/4/2009
CILKER CT
2674
194
5/2/2009
LOMA ALTA AV
1450
249
4/29/2009
QUARRY RD
1890
447
4/28/2009
GARDEN HILL DR
2016
17
4/24/2009
WINCHESTER BL
2665
311
3/23/2009
Av DOM all pendings
99.96
Av DOM since 6-1
41.44
Ave DOM before 6-1
130.94
While some homes are not selling too fast, the pace appears to be quickening dramatically. It may be awhile before this is seen in the sold data, but it's very much a "real time" snapshot of the market activity now.
Sellers, if you get your home into great shape and price it aggressively, you may be able to sell your home so fast that it will shock your neighbors.
Buyers, if you are trying to purchase a home that falls into this segment, it's important to see homes that interest you quickly now, since they may not last a week or two.
If you'd like more information on data pertaining to your home or the type of home you'd like to buy, please contact me. We can set up a meeting and go over the information that matches your own situation.
(Numbers by our MLS, MLSListings.com. Data exported, sorted and crunched by Mary Pope-Handy.)
A blog about Los Gatos real estate, homes, houses, condos, townhomes, housing market, neightborhoods, history, events, businesses, parks, schools, photos, issues, and lifestyle.
Mary Pope-Handy
Realtor, CRS, ABR, SRES, E-PRO
Luxor Real Estate Group
Mailing Address for Mary: PO Box 440 Los Gatos, CA 95031-0440
877 397-5391 (office/toll-free)
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