Every couple of weeks I get a phone call or an email from someone who wants to get a "cheap" home in Los Gatos by finding a bank owned house or condo, or a short sale, here in town.  Real estate prices in Silicon Valley have fallen substantially due to foreclosed homes, but the areas primarily impacted are the least expensive neighborhoods, not the most expensive ones.

So let's have a look at the numbers. The chart below is data gleaned by me this morning from MLSListings.com, our mls provider.

The majority of homes selling & closing in Santa Clara County are "regular" or non-distressed sales and in Los Gatos (as in other high-end areas), the percentage of short sales and bank owned properties are very low.

Bottom line: while there are some very good deals to be found in Los Gatos &Monte Sereno (as well as in Almaden,and Sarato, there are not a lot of foreclosures to buy and prices have not dropped so dramatically in these areas as in other parts of Silicon Valley.

Sometimes I get calls from people wanting to get a "steal of a deal" on higher priced Silicon Valley real estate by purchasing short sales and bank owned properties in  areas with great public schools like Cupertino, Saratoga, Monte Sereno, Los Gatos, and Almaden Valley.

Unfortunately for bargain hunting home buyers who are seeking premium school districts in Santa Clara County, there just aren't that many of them. 

It's very easy to find distressed properties for sale in less expensive areas. In fact, for the first quarter of 2009, 95% of all sales in the Alum Rock area of San Jose, which is one of the poorest areas of Silicon Valley, were either short sales or bank owned properties. 

It's a different story in most of the expensive west valley markets, though. We see far fewer of these in places like Palo Alto or Los Altos (or Los Gatos, Monte Sereno and Saratoga).  There's a very direct correlation between the best  public schools, low crime, higher income, and higher education levels of homeowners with lower numbers of foreclosed homes. 

Here are the numbers of available homes for sale, which I've culled from our MLS, without further elaboration: