Los Gatos, California
Los Gatos real estate, neighborhoods, condos, houses, homes, market trends, history, events, lifestyle, parks, events, businesses, home, Mary Pope-Handy
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Apr. 1, 2008
 Please have a look at my latest market update for the town of Los Gatos, broken down by zip, for this week. (Data from Altos Research, a subscription service I have. Disclaimer: they use list prices for their reports.) The following links are to pdf files for these reports.
Feb. 9, 2008
What are the odds that a home in Silicon Valley
will sell right now?
 Most of the homes for sale in Los Gatos, San Jose, or anywhere in Silicon Valley are not going to sell this month. In Los Gatos, there's about a 20% chance than any given home will sell. In San Jose generally, it's a lot worse than that - it's about a 13% chance that a home will sell. Here's a quick look at the numbers for these two areas of Santa Clara County:
Los Gatos Single Family Homes (95030, 95032 zip codes)
Active Listings (For Sale) = 118
Pending Sales (Under Contract) = 23
Closed in Last Month = 18
Months of inventory = 6.5
San Jose Single Family Homes (all areas)
Active Listings (For Sale) = 2921
Pending Sales (Under Contract) = 405
Closed in Last Month = 196
Months of inventory = 14.9
The months of inventory, or absorption rate, is a simple calculation of the number of active listings divided by the number of closed sales in the last month. For Los Gatos, that figure is 6.5 months. For San Jose, it's a whopping 14.9 months. (The National Assn. of Realtors says that at 6 months or more, it's a buyers market.)
What is also good to measure, though, is the pending sales against the listing volume. In Los Gatos, you can see that the number of pendings is a little higher than the number of closeds. But in San Jose, it's more than double! This tells us that the market IS improving. But it's far from being an easy time to sell. Depending on your area and price point, there's an 80-90% chance that your home would not sell this month.
How Can A Seller Improve the Odds
of a Home Selling Now?Prospective Los Gatos, Saratoga, and west valley sellers - what can you do to improve your chances of selling?
Here's a short list of the most common seller mistakes, things NOT to do:
 (1) Hiring an agent based on the list price he or she suggests (going with the highest number) is the biggest and perhaps most common error. A better practice: interview agents, hire someone, and then together work to establish the probable buyer's value of the home and work out a pricing strategy from there. It's fine to discuss pricing with the agents you interview, but do not choose your agent based on pricing, but rather on references, marketing, negotiation ability, experience, and other criteria.
(2) Related to #1 above, a common mistake among sellers is pressuring your agent to tell you what you want to hear rather than what you need to hear. Some sellers believe that if they "sell" the agent on the higher value of their home, or the current condition (which might need some changes to net you the most money), the house will sell for more, and sometimes homeowners actually push agents to state their estimated value higher than is realistic. One key job the real estate professional has is to provide you with objective input on your home, both at the time the listing is signed and as the feedback comes in and the market conditions possibly change. Ultimately, only you can assign the list price on your home. Allow your agent to provide you with objective input so that you can make a good decision.
Put another way, sellers often have an inflated view of what their own home is worth on the market (this is true of agents selling their own homes, by the way). And sellers take it personally when they believe a home is worth 10% more than the agent is telling them it's likely worth. Sellers frequently feel as though the lower price is insulting, and a response spoken or unspoken may be "I'm not going to give away my home". Agents occassionally do underprice a home, but 98% of the time, if there's a pricing error, it's on the high side.
Please remember that your agent is not the buyer on your home, and you are not negotiating a sales price with your agent. You are not on opposing sides of the table. When you hire a Realtor, you are a team and you share the same goal: getting your home sold in today's market.
 (3) Another common error among sellers is simply this: not believing that the market data applies to their home. If the market has corrected X% in the last timeframe, and all the other homes in the area have gone down in sales price, it's also true that your home has gone down in value in the buyers' eyes. Home prices or values are not a lot different than those of shares in the stock market. What a share of stock sold for yesterday or last year is interesting information, but it may be totally irrelevant to what that same share will sell for today. Holding on to what the home "used to be worth" is not going to assist you in getting your home into the minority pool of homes that are selling now.
(4) And finally, a very frequently seen seller mistake that causes homes not to sell is in not utilizing their agent's skills (on pricing of course but also staging, garnering feedback, analyzing the market, etc.).
For example, often Realtors have extra training and experience in staging. Agents know that fresh paint and carpet often will get the seller the most return on the investment, and so will decluttering. Sometimes more is needed in this area too. But sellers don't always want to hear it. The ultimate sales price of the home is tied to a number of factors, including how well it shows to potential buyers.
 Another area to watch out for is feedback. If your Realtor tells you that there's a problem with the way buyers assess your home (pet odors, cooking or smoking odors, clutter or other issues), take it seriously. You will improve your odds by taking the feedback as useful input (and not as an assault). A great system that I use is HomeFeedback.com; the seller can get both individual responses and compiled statistics of the feedback. Sometimes, sellers take it personally and get upset at their agent for the information offered, even via this type of buyer response. This makes it hard to hear what you need to hear.
Put another way, what you CAN and SHOULD do to sell your home in today's market: Hire carefully! (Most agents in the Santa Clara Valley have been licensed less than 5 years and have not been through a market like this. Experience is very important. Check references and be very careful here as it is your single most important decision.) Make sure it's a full marketing plan, using both web and traditional forms of marketing.
Price carefully and realistically! With the vast majority of homes not selling, it is important to not overprice. This is not the market for "trying a price". Price it to sell. Price it to be the best value among similar homes.
Stage it! Listen to your agent.
Take feedback seriously. Estimating prices and what needs to be offered to buyers in the way of condition, concessions or other things in falling markets can be tough. Ask your agent for feedback and take it to heart. Sometimes market conditions are a "moving target" and may require readjusting.
To sell your home in this challenging market for the most money and in the fastest time, the home needs to look great and be priced well and be accessible. Recently I was at a real estate educational seminar and it was put this way: "we're in a beauty contest and a price war".
And lastly, only put your home on the market if you are serious about selling. It's a great time to buy a home in Silicon Valley, but it's not necessarily an ideal time to sell! Rick Campbell, author of The Real Estate Report, opines that we may be "at or near the bottom of the market". Of course, if you are "moving up", the overall is most likely a plus even if you take a hit on the sell side of the equation. So sellers, if you want or need to sell now, make sure that you position your home so that it's not just listed, it's sold.
Mary
P.S. Buyers, don't wait. This is about as good as it gets!
Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, RECS, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: "Get The Best Deal When Selling Your Home In Silicon Valley"
Keller Williams
877 397-5391 (Direct/Toll-Free/Fax)
www.DelightHomes.com www.ValleyOfHeartsDelight.com
emailto: Mary@PopeHandy.com
Blog: www.LiveInLosGatos.com
Dec. 6, 2007
For the MOST CURRENT Los Gatos real estate market information, please click on the header above to visit the most recent posts. Each week there will be an update to the housing market in Los Gatos, so return often!
The real estate market for single family homes in Los Gatos is moving more into a buyers' market. Values may be slipping some, but the big story is the fact that so few homes are selling and closing. Whether you compare November 2007 against other recent months or against other Novembers in the last ten years, sales are clearly, and dramatically, way off.
Let's take the number of closed sales from November for the last 10 years, then we'll look at the absorption rate, or "months of inventory" for Los Gatos in recent months.
As is apparent in the graph, closings are at an all-time low for November over the last decade, and in fact is about half of average. This movement is not exclusive to Los Gatos but is being seen all over Silicon Valley; this is the reason there are so many layoffs among lenders, title companies, and real estate offices (in support staff, not commissioned sales people). So even "seasonally", this is unusual.
Next, let's look at the "months of inventory", meaning how long it would take to sell off the current inventory (how many months) if nothing new came on the market and homes continued to sell off at the rate of the closeds for the month. Here, too, the figures show a deepening buyers' market. (Under 6 months is considered a sellers' market by the National Association of Realtors, over 6 months a buyers' market.)
Again, the month to month view is a clear reflection of the slowing market and the reality that fewer homes are selling. The larger the number of months, the harder it is to sell.
Some experts predict that things will calm down in 2008 and we'll have a flat or normal market, or very slight appreciation at best. Other experts predict a worsening real estate market.
Silicon Valley often marches to the beat of its own drummer. Since we have geographical constraints (two sets of mountains and a bay), a good economy and a housing shortage, I believe things will go fairly flat for most of the valley in the next year or two.
It always comes down to supply and demand. Right now there's plenty of supply in Los Gatos (about 108 homes). In neighboring Saratoga, though, there are fewer than 75 homes available - so the absorption rate there looks very different. If, in the new year, there are a lot of homes on the market, it will put downward pressure on pricing and homes will sell for less than they're selling today. If inventory tightens up, that won't happen.
Tomorrow: the real estate market for condos and townhomes in Los Gatos.
Jun. 14, 2007
The Los Gatos single family real estate market appears to be split, with some price ranges faring far better than others, but overall, it is clearly a buyer's market. For the homes that do sell, prices are appreciating somewhat.
Since June 1st, there have been just 9 closings among single family homes. Of these, the average "days on market" was a brisk 15, with one house selling after 55 days on the market and another after 33 days - both of these, however, sold for significantly less than asking price, while homes that sold fast generally sold at list price or higher than list price. None of the closeds were under $1 million or over $1.6 million (average sales price was $1,376,865).
There have been 13 pending sales since June 1st (compared to an inventory of available single family homes in this same are of 101). Not one of the most recent sales is under $1 million and not one of the recent sales is over $2 million (there are not so many available under $1 million, wheras there are lots available over $2 million).
If we consider ALL pending sales, there are 20 to view and the range of all pending sales prices (not just sold in the last 2 weeks) is a little wider than with the closeds: 2 were just a hair under $1 million, one was a low $729,000 (for an "attached" single family home) (so 3 under a million, compared to 10 available) and four ranged from $2 million to $2.5 million (compared to 53 available). Most recently pending sales are priced solidly between $1 and $2 million.
So what are a seller's odds of selling? Right now, for all homes priced under $2 million, about one in three. For homes more than $2 million, it's about 16% (there are 9 pendings - not just since June 1st but generally - and 53 available properties in that range). You are most likely to sell if your home is the middle range between 1 and 2 million and if your property has Los Gatos Schools with no adverse conditions (high voltage power lines, freeway too close, etc.).
Sales are down 15 - 20% from a year ago, and sales then were down significantly from the year before that. Prices have been rising modestly but that doesn't help a seller if the home doesn't sell! Inventory is continuing to rise and appears that we are going into a deeper buyer's market at this time. The market does ordinarily begin to soften around this time each year, so seasonally this is not out of the ordinary. But the number of sales and the narrow range within which they are selling is key. (And this quick view did not even consider school districts or other issues that can impact value.)
Sellers: This is not a market to see if you can "get your price". You will be wasting your time. This is not a market for homes that are dirty, difficult to view, poorly staged, needing work, or overpriced. The real estate market is unsympathetic to what a seller wants to get out of the house (just like the stock market), and the market is the one thing that neither the agent, nor the seller, can control. If it is important to you to sell now, then you need to put your best foot forward on all fronts, from staging to marketing to accessibility to pricing - most of all pricing. (Most homes that do not sell fail to do so because they are overpriced.)
Buyers: If you are in the market for a luxury property, now is the time to move on it, particularly if you are an all-cash buyer. Another good angle for you is to find a property that needs updating and/or has been sitting on the market awhile, since the longer the days on market, the more likely you are to get a good price. However, the seller has to be motivated for that to happen - and in every market, there are sellers who will only sell if they get their price. Don't assume that you can get a bargain just because the DOM is long. (But hey, it's worth a try.) Understand that if you buy in the most desireable areas and with the best schools, and if the home is priced well and beautifully updated, you could pay $50,000 over list price to get that "shiney penny".
For advice specific to your area, please contact me.
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Apr. 30, 2007
 How's the Market?
That's what everyone asks Realtors, all the time.
In Los Gatos, California, the market under $2 million is great. Fantastic. Outrageously good.
 And that is also true for the neighboring communities of Saratoga, Campbell, Cambrian Park, and Almaden. As long as a home is in good shape, priced appropriately (for location and condition), and marketed decently, it's selling fast - often in a week to ten days.
In EVERY market, even in the hottest markets, there are some homes that don't sell. Right now, there are only 91 homes available in "area 16" which is mostly Los Gatos addresses (though a few San Jose ones). There are 31 pendings, and 30 of these have sold since April first. Looking at those that do sell, the homes under a million generally seem to be selling within a week (if they are going to sell at all). The higher priced the home, the longer the days on market. Overall, it's about 2 months on the market if you include all price ranges.
In my own real estate practice, I sold two homes in the last week (one listing, one buyer sale), fielded multiple buyer calls, met with one new buyer couple and did two listing presentations (and talked to a whole lot of other folks about both buying and selling). If I were ONLY getting calls from buyers or ONLY getting calls from sellers, I would have a sense that the market were tilted. But in my experience, there's a lot of activity on all fronts. The price ranges in these clients ranged from entry level to move up (less than 1.5 mil.)
How's the market? I would say "healthy". It's a good time to both buy and sell!
Apr. 6, 2007
REInfolink, the local multiple listing service provider for real estate professionals, has provided us stats on March's sales and closing activity. How're things looking?
In a nutshell, I'd say Los Gatos is fairly healthy. Homes that are in the lower to midrange prices and are nicely improved and are selling well. Overpriced homes that need updating are not moving well at all (but of course that tends to be the case in all markets). Homes with a good lot that are priced like "land value" are selling well too. It seems to be all about positioning.
Here are the numbers:
For the "monthly under contract sales" (pendings), it looks strong. There were 46 new sales and 62 new listings in March, for a 74.19% ratio of sales to new listings. In February that ratio was 71.71% and in January it was 53.85%. Another strong indicator is the average days on market for these new sales (how long it takes a home to sell). For March it was 49 days, for February it was 74 days and for January it was 84 days. So all of that looks like improvement.
Inventory is rising, though. Inventory for January was 100, February 103 and March 118. (To recap the ratio above, the sales are currently keeping pace, with sales in January being at 28, February 33 and March 46.) If the sales can keep pace with the rising inventory, which so far they've been doing, the market will remain healthy.
What about the closed escrows? Looks like the market is mildly strengthening from this part of the data too. The number of closed sales (as opposed to pendings, above) is as follows for the first quarter of the year: January 22, February 23, March 26. The "months of inventory" is a ratio of current inventory in the month divided by the number of closed sales in the month (or you could do weeks of inventory/weeks of sales etc.). In January the "months of inventory" or absorption rate for homes with a Los Gatos mailing address was 3.6, in February it was 3.69 and in March it's 3.9. That is the rate at which the current inventory would be depleted if no new homes came on the market and homes continued selling at the present rate.
The "days on market" for the closed sales was up slightly. In March it was 62. February it was 50 and January 105. Sort of all over the board.
This data is all backwards-looking into March. I am hearing anectodal stories that things have been heating up even more in recent days and I have been surprised at some of what I've heard. In other words, the market may be "hotter" than it appears even in these numbers.
The real estate market consists of many micro-markets. A condo in downtown Los Gatos is really very different from a view estate up on Santa Rosa or Sierra Azule. A home in Belwood or Surmont will be in a different market than a townhouse in La Rinconada. Homes in Blossom Manor are going to sell differently than those off of Oka Road or Golf Links Drive. Please contact me if you'd like specific information on what the market is doing in your neighborhood, for your size home.
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