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.

The Silicon Valley real estate market continues to improve, generally.  It is a seller's market in the lowest priced homes, especially if they are in good areas such as the Rosegarden or Naglee Park. In those parts of Santa Clara County, we're seeing multiple offers and overbids.

As the price point rises, though, the market cools.  In the most expensive parts of Silicon Valley, homes are not selling well and it remains a buyer's market. (Six months of inventory is considered balanced, 7 or more than 7 is a buyer's market, and 5 or less than 5 is a seller's market.)

In Cambrian Park, about half of all homes are selling and there are only 2 months of inventory.  As of today, there are 100 single family homes available in Cambrian, 118 single family homes in some stage of "sale pending" and 51 have closed escrow in the last month.  (Months of inventory = 1.96 - it's the inventory divided by the closed sales that month.)

In Almaden Valley, there are currently 113 single family homes for sale, 56 "sale pending", and 25 closed in the last month.  The months of inventory in Almaden, a more expensive part of San Jose than Cambrian Park, is currently 4.52.

In Los Gatos, we have 167 single family homes for sale, 44 pending sales, and 25 closed in the last month. Months of inventory = 6.68.

In Monte Sereno, there are 29 houses available, 4 under contract, and 4 which closed escrow in the last month.  Months of inventory is 7.25.

Finally, in Saratoga, 164 homes are for sale, 38 are pending sale, and 19 have closed in the last month. The months of inventory = 8.63.

That said, within each market that are smaller markets and a lot of the performance depends on how well the home in particular appeals to a broad audience, its general condition and how aggressively its priced. Many sellers are just "testing the market" and those homes may or may not sell.

What did sell recently in Los Gatos?  Below, have a peek at some of the success stories. These are the houses in Los Gatos that not only got an acceptable offer, but passed all the hurdles of inspection, appraisal, and financing and made it to the finish line, the closing table.

SOLD	Beds	Baths	Home SF	Lot SF	List Price	Sales Price
Hernandez Av	4	3	3,131	10,396	$2,600,000	$2,500,000
Rosalie Ct	5	3 1/2	3,034	15,576	$1,699,990	$1,650,000
Johnson Av	4	2 1/2	2,125	6,250	$1,649,950	$1,560,000
Vista Del Monte	4	2 1/2	2,220	10,800	$1,699,000	$1,550,000
Amanda Ln	4	3	2,059	11,200	$1,350,000	$1,351,000
Camellia Te	4	2	1,821	8,550	$1,379,000	$1,295,000
Frank Av	4	2 1/2	2,765	16,960	$1,399,000	$1,275,000
Eastridge Dr	5	3	2,823	9,990	$1,250,000	$1,235,000
Loma Alta Av	3	2	2,254	4,840	$1,299,000	$1,225,000
Topping Wy	2	1	1,102	10,480	$1,150,000	$1,069,000
Old Adobe Rd	5	2 1/2	2,461	10,455	$1,099,950	$1,035,000
Montclair Ct	4	2	2,224	10,030	$979,000	$989,000
Harding Av	3	2	1,791	9,200	$1,009,900	$950,000
Via De Tesoros	6+	3	3,505	10,500	$949,900	$910,000
Calle Marguerita	5	3	2,746	9,350	$899,000	$907,500
More Av	4	2	1,800	8,288	$945,000	$885,000
Potomac Dr	4	2	1,389	8,125	$899,000	$880,000
Lester Ln	4	3	1,770	7,858	$859,000	$839,000
Cambrian View Wy	4	3	2,073	8,760	$864,900	$800,000
Jamie Ct	4	2 1/2	2,339	8,008	$756,218	$756,218
Blossom Valley Dr	4	3	1,602	7,920	$749,000	$749,000
Linda Av	2	1	1,115	7,888	$719,000	$726,000
Creekside Village Dr	3	2 1/2	1,390	1,742	$749,000	$675,000
Blossom Hill Rd	6+	3	2,784	12,144	$699,900	$610,000
Capri Dr	2	1	1,060	29,700	$599,000	$550,000
Average Values	3.48	2.42	2,135	10,200	$1,130,148	$1,078,869

On average, homes are selling upwards of 95% of list price in Los Gatos right now. As you can see, some are selling right at list and occassionally one sells a little over.

What about prices?  Generally, it appears that prices are still slipping in some areas but are level in others.  We may be close to (or perhaps just past) the bottom. Time will tell.

In the lowest priced areas of Silicon Valley as well as some prime areas of the more expensive west valley, though, the multiple offers and overbids are driving prices up. For entry level buyers, it's time to get off the fence.  Home prices are rising and, equally importantly, interest rates are rising.

Those most negatively impacted right now are move-up buyers (who'd love to move up but are trapped by negative equity) and retirees who would love to sell and move to a retirement community but need to wait for more of a recovery. The retirees are doubly hit because they relied on retirement portfolios that may well be worth half of what they were worth a couple of years ago.

Where's the opportunity in this market?  First time homebuyers, this is as good as it gets. You can now purchase a home with only 3.5% down (though you'll need another 2-3% for closing costs) with an FHA insured home loan. Not only are prices great, but there's an $8000 first time homebuyer credit that you may be able to use toward your closing costs.  This is not an open ended offer - hurry!