The Condo and Townhome market in Los Gatos is a mixed bag. Values are holding and appear to even be rising slightly, the "days on market" are short (a mere 14 days in November), and the list price to sales price ratio is amazing at over 101%. But just as with single family homes, the number of sales is way down.

Is this seasonal or is it "the market"?

One way to check against a seasonal fluctuation is to look at all recent Novembers and see how this one compares. Let's have a look:

As you can see, the 5 closings in November is the least number of sales over the last decade. Sales are way, way off. And, like with single family homes viewed the same way (see yesterday's post), it's about half of what's average.

If we look at the months of inventory, or the absorption rate, does it look any better?

The condo market remains under 6 months of inventory, which is the point at which the National Association of Realtors would say it moves from being a sellers' market to a buyers' market. These numbers are much better than those for the single family home market in Los Gatos (which had 8.79 months of inventory for November - and those numbers appear to be rising steadily, wheras these numbers are up and down so they appear less predictable).

As of today, there are 5 pending condos or townhouses in Los Gatos (zip codes 95030 and 95032) and a total inventory of 26 available townhomes or condominiums in town. So approximately 20% of the homes on the market are selling. Those that do sell, sell fast and apparently for a great ratio.

But that leaves 80% of the homes that aren't selling at all. So all the good news about "fast days on market" and "great list price to sales price" is not very heartwarming to that 80% whose homes don't seem to want to sell.

In a market like this one, buyers are passing up homes (whether houses or lofts or anything else) with "issues" like busy roads, deferred updating, and of course especially overpriced homes. The property which is fixed up, in a superior location and priced aggressively - the gem, the deal - is selling fast.

This is not a market to see if you can get a price. It's a market for people serious about putting a home in top condition on the market, and pricing it to attract a buyer who's frankly looking for a good deal. Your home needs to be that good deal to sell right now.

Will it be better in the spring? Possibly. The market is really not bad now. There are always overpriced homes in less than ideal locations and with less than perfect condition that don't sell because the price isn't low enough to compensate for the problems. So don't let the failure of some properties worry you about yours. Just get it in the right shape and price it for what today's market will bear (not what you want it to be worth, not what you need, not what someone else told you it is worth).

If you are buying another home after selling the condo or townhome, you are in luck. The market gets softer as you move up the ranks, and there's a good chance you will make up for any felt loss on the next purchase. But hurry. No one knows whether it will suddenly become a different kind of market in the new year!

Call me if you'd like to chat about your real estate needs. I'm around and working through the holidays with just a couple of days off near Christmas - and I have time to visit with you and strategize to help you get the best deal when selling your home.

Wishing you and yours a very Happy Hanukkah, a Merry Christmas, and a Happy New Year (and anything else you might be celebrating in these days)!

Best regards,

For the most recent Los Gatos real estate market information, please click on the header above to visit the current week's worth of posts. Every few days, this blogsite will have a market comment, so please visit this site often.


What is the housing market doing in Los Gatos now? Market analysts are divided as to whether it will settle down by the end of this quarter and bring us a better 2008 or if the market will continue to be sluggish for another year or two with increasingly decling sales and in some areas, declining home values. No one knows the future, but there are convincing arguements for both outcomes!

Let's have a look at October's numbers.

Los Gatos prices are up from a year ago -13.7% for the median sales price and 21.5% for the average sales price. But the number of sales was off a whopping 60.6% from the same month last year!

Are home values rising? Not necessarily.

This could be an indicator that what little is selling happens to be selling in the wealthier sectors
of the market. Low end homes are possibly suffering a more direct hit from the mortgage fallout than the extremely high end homes.

An excellent tool for evaluating the market is the absorption rate or "months of inventory". It is the rate at which homes are selling - it is a better indicator than days on the market as it incorporates the pace at which new listings are coming on the market too. This number shows how many months it would take to sell off the current inventory if no new homes were to come on the market. Below please find my graphs for single family homes and also for condos in Los Gatos this year.

Below please find the Single Family Homes in Los Gatos in 2007 "Months of Inventory" (fewer months is a stronger seller's market, more months is a stronger buyer's market). Data pulled from REIL.com, our mls provider.

Over 6 months is considered to be a "Buyer's Market". So the market has become much more favorable for buyers this fall. (Buyers: this is a good opportunity for you to buy now!)

Below, please find Condos and Townhomes in Los Gatos in 2007 "Months of Inventory" (data from REIL, our local MLS provider - math by Mary).

Interestingly, the condo market appears healthier than the single family home market. Is it a matter of affordability? I suspect that it's driven by first time homebuyers who have cash in hand. The more entry level homes in Los Gatos that are single family homes are frequently not a buyer's first home, but a step up. The lower priced homes in the valley are having trouble selling because of the subprime fallout. My thinking is that the stalling out of those sales is impacting the ability to sell entry level homes in Los Gatos.

Here's a key "take away" from this peculiar disparity: this is an EXCELLENT time for condo and townhome owners to sell their current home and make a move up into a single family home. Seldom do things line up so perfectly for this kind of a move!

Want more data? My Real Estate Report is now updated with October's numbers for Los Gatos, Saratoga, and all of Silicon Valley (including by district within San Jose).

To get the county view in a spreadsheet including Los Gatos and nearby cities, look on the left sidebar and click Monthly Trends under the County headline (if you go to the Monthly Trends under the San Jose headline, it will bring you Almaden Valley, Cambrian Park, Willow Glen, etc. rather than the Campbell, Saratoga, etc.). Scroll down on the main part of the page and click on the Continued button.

To view charts of market activity, sales and listings in Los Gatos in particular, click on the words "Los Gatos" in the left sidebar.

This report is updated monthly, usually around the 7th-10th of the month.

If you would like even more information, please view the 4 page, printable PDF version, which includes less statistical information but more market commentary:

For more information on the market, your neighborhood or your home, please contact me!

Warm regards,
Mary

Mary Pope-Handy, Realtor, CRS, ABR, e-PRO, SRES, ASP, RECS, CNHS
Helping Nice Folks to Buy & Sell Homes Since 1993
Co-Author: "Get The Best Deal When Selling Your Home In Silicon Valley"
408 204-7673 (Cell)
www.PopeHandy.com  www.ValleyOfHeartsDelight.com
Mary@PopeHandy.com