Let's take a look at the real estate market for Los Gatos condos and townhomes from a very high vantage point: a two year overview. (Graphs created by me using Clarus Market Metrics, a subscription of my board and MLS.)
For the "really big picture", let's start with the "Supply & Demand by Month", going from August 2007 to August 2009. Green represents demand, and red represents supply.
As you can see, there's a big gap between available homes and how many are sought & purchased - so clearly this is a strong buyer's market.
Now let's turn to the absorption rate, or months supply of inventory. Below is the chart for all of "area 16", which is Los Gatos/Monte Sereno (with a few homes in San Jose or Campbell along the border included - but by and large, it's Los Gatos).
The condo and townhome market has improved tremendously since the doom and gloom of last Decemeber (then nearly 22 months, today less than 5).
As I've mentioned in other posts, the market can vary a lot depending on zip code, price point, and school district. This particular tool, the Clarus Market Metrics, does not use schools as a variable, unfortunately. But we can see what happens just with price point by breaking it down to home under and over $500,000.
Immediately below: absorption rate for Los Gatos homes priced UNDER $500,000 (condos & TH):
and next, months of inventory (absorption rate) of homes priced between $500,000 and $1,000,000:
Interestingly, the "sweet spot" of the Los Gatos condominium and townhome market is not in the least expensive condos and townhouses, but those between $500k and $1 mil. (I should add that there are some condominiums and townhouses priced over a million, but not a lot and the data gets squirrelly due to the low numbers so I am not using them in this post).
This is curious because the lowest priced homes are usually the "hottest", but not here. Why? I only have theories, but my thinking is this:
the lowest priced condos are mostly either senior condos (along Alberto Way, the Los Gatos Commons) or very small units
if seniors are hoping to downsize to move to a smaller place, they are probably electing to wait so that their home values "recover" some
some people will elect to purchase a single family home in San Jose for $500,000, but perhaps others are buying a more expensive condo or townhouse to enjoy the benefit of the schools - so this would not be super tiny (more than 1 bedroom) since they are purchases for the schools
I may do more digging in the future to see what's causing this trend, but this is my hunch. I welcome any comments from my readers on what they see happening with the condo market here in Los Gatos.
Most homes are neither fully original nor fully remodeled. Most homes are "somewhat updated" or "somewhat remodeled". To get them into shape to pass inspections (there's not really a pas-fail grade, it's more "items of concern", health and safety issues, or serious structural issues, and big cost items), most homes will require some work. And this is often a surprise to homeowners. Sellers don't usually know that they have termites, for instance. They often don't realize that the electrical system they've been living with isn't entirely safe. They won't know until and unless they get the home professionally inspected.
Silicon Valley real estate buyers strongly prefer a remodeled home that is not in need of any repairs. If a kitchen is 15 - 20 years of age or older, most home buyers will think it needs to be remodeled. Water heaters last about 10 years - so if yours is 9.5 years, they'll want (expect) it to be replaced, too.
Treating pests, correcting issues with electrical, roof, updating countertops, appliances etc. can often run 1 - 3% of the purchase price. This is really in the range of normal.
Then the only question is this: who will pay that 1 - 3% to get the home into ideal condition?
When the sellers do the repairs, updating (and staging), often they recoup far more than that amount because buyers feel confident knowing that there are no major issues or concerns. When the buyers pay for the improvements to the home after closing, often they get a better deal on the house. It's a risk - return ratio. Buyers will pay more when they feel sure that the home is in good shape (and it looks better too). They pay mcuh less when there's the unknown of "how much will it cost to fix it?" and when they have to live through doing the work.
Let's look at a couple of hypothetical examples using a million dollar property for the sake of easy numbers.
(1) A Los Gatos house has been updated and remodeled for the most part, but it needs about $20,000 worth of repairs (that were previously unknown to the seller), between a roof tuneup, pest work (Section 1 work on the termite & pest report), a couple of electrical issues, replacing some appliances that currently function but are really not at all close to new, etc. It could also use some fresh paint, carpet, and a little work on the landscaping to show at its best. Altogether, it's about $30,000 worth of repairs, updating, and "freshening up" to sell.
In this hypothetical case, one seller will do the repairs and updating and one won't.
The seller who doesn't do the work expects that the home can sell for $970,000 since it should be worth about 1 million if the work's done. The seller's thinking goes like this, "I've been living here and it's just fine. I might pick out a paint or carpet color that the buyer wouldn't like." Or "I'm not going to stage the home, or inspect it. What if it doesn't sell? I'm going to sell As Is, but only if I get my price." That home might eventually sell in the low 9's, if it sells. Maybe at $920,000 to $940,000.
The seller who does the work and prices it aggressively (a little on the low side, under a million and maybe as low as $975k) gets multiple offers, driving the price up over one million dollars. Depending on the number of offers, it might sell at $1,020,000. That would be a pretty good return for $30,000.
(2) Now let's consider the 100% original home vs the fully remodeled one.
If a fully fixed up home sells for $1,000,000 and the same floorplan in the same neighborhood is clean but original and it would take about $100,000 to bring it up to the level of the remodeled home (it needs a new kitchen, new baths, new furnace, water heater, pipes, etc.), a buyer will NOT pay $900,000 for it. No, the buyer will want an additional discount for the unknown, for having to arrange the work, for having to live with the construction etc. That home will probably sell for more like $850,000, perhaps $830,000. You may not think it's a "fixer upper", but the buyers will. It's what most of us would call a "cosmetic fixer". The home's not falling down, but it needs a lot of work.
If you're the seller, you may not have the time, energy and money to do the remodeling - but realize that you can't sell for what it is worth per se. You will have to discount it more because of the risk and hassle.
Buyers, sellers often don't think they should have to take as big of a discount as you want. Sellers won't part with that "could be a million dollars" home in the 700s. But the good news is this: if you do the work, you should, in most cases, have great instant equity. You won't have as much competition. (In both examples, of course, assuming that prices are flat or better, not declining.)
Also factor in the real estate market conditions:
When the market is flat such that prices are either not changing or appreciating, it is usually better for sellers, if they want to net more money, to do the repairs and staging. Homeowners, even if you have periodically updated your home and you think it's in perfect shape, please understand that there will probably be repairs and improvements to make in order to maximize your return on the home sale. Mentally budget up to 3% of your home's value, though most likely if you haven't deferred work, it should be closer to 1 - 1.5%.
Often sellers don't want to do the work, and in many cases they don't have either the energy or finances to do it. However, when they do have the work done, it is usually greatly to their benefit. I once had a Santa Clara listing and the seller agreed to do $7000 worth of minor staging and repairs and that brought a sales price of $20,000 more - about three times the "investment" returned just a couple of months later.
If the market is depreciating and prices are falling, it is often better to get the home on the market quickly since the time spent on improvements will often cause a loss that is greater than the value of making the imrovements would bring.
If you are interested in improving your net from a home sale or in paying less for a property, please contact me and we can discuss your plans and strategy. If you are thinking of becoming a Los Gatos, Saratoga or San Jose area home seller, please also see Get the Best Deal When Selling Your Home in Silicon Valley, my book. If we meet, I'll be happy to give you a copy of it with my compliments.
A couple of weeks ago I was introducing some buyer clients of mine to various neighborhoods in Los Gatos and Cambrian Park to give them a general feel for the area, real estate prices, home styles, and so on.
We drove into the Las Astas area, off Lark Avenue, and decided to pop into an open house at 208 Las Miradas Drive, which was being hosted by the listing agent, Jim Meech of Alain Pinel Realtors. The setting is quite nice and also unique, so I asked him if I could blog about this property. After consulting with the homeowner, he gave me the green light.
Why blog about this house?
As you can see from the photo above,this house enjoys the proximity of many beautiful, large trees. It is a lovely setting. Inside, it's evident that the owner has updated and remodeled the home - the kitchen is beautiful and features slab granite countertops, for instance. The layout is nice, with both a living room and a family room. Finally, a major plus of this home and neighborhood is unseen: this property enjoys the highly regarded Los Gatos School District.
All of this is well and good, but it's not the reason for this post. What's unique and worth blogging about, as I see it, is the precise location of the home. The lot backs up directly to the much beloved Los Gatos Creek Trail.
Being situated directly on the trail provides a number of benefits. It's quick access to Lake Vasona County Park, to town, a shortcut to schools (without busy streets to cross), and of course it's a buffer from other homes. Rather than seeing windows and rooflines behind the house, residents enjoy a canopy of trees.
Details on 208 Las Miradas Drive:
It's a compact, well laid out ranch style home with 4 bedrooms, 2 bathrooms, and a family room as well as a living room. The living areas are "open", which makes the house feel larger than its nearly 1300 square feet. The lot is approximately 6900 SF but it, too, feels larger. There's a 2 car garage and extra room on the side of the home for boat or RV parking.
This property is offered at $889,000.
For more information, please contact Jim Meech at Alain Pinel Realtors: 408-718-3116 or jmeech@apr.com.
(This post is not paid advertising - I simply liked the house & location and wanted to share the info with my readers and hope you find it of interest. -mph)
Looking at homes for sale in Los Gatos? I've compiled a bunch of searches of Los Gatos real estate for sale by price (see a list of homes) and by area (view sections of Los Gatos by map with house icons you can roll over with your mouse to get more details). None of these requires registration.
The first list is broken down by price point for the whole town (sorry, it's not separated by school district, acreage, home size etc. - just price).
The second is a map view of the town's homes on the market. Some areas are fairly large and some are just a particular (popular) subdivision, such as Surrey Farms.
If you are looking at Los Gatos homes for sale online, you've probably noticed that some sites require registration and some don't, and you probably assumed that the information is equally in depth for both. They're actually not the same, though they're close. The more in-depth info can be provided only if someone's registered (it's a legal thing, believe it or not). I believe that school districts are omitted on the non-registered sites, for instance.
I don't like to register to get information and I presume that most of my readers don't, either. So I do have a great variety of ways you can browse homes for sale on my sites, but also do include the sign-in type which delivers info to your email box as it happens. If you want the more detailed info, you can either ask to save your search from one of the above map searches or price searches, or you can go to PopeHandy.com and register for the Private MLS Search.
Are home prices rising in Los Gatos? It does appear that way. What is reported, though, may not be what it seems.
Below are the stats for the closed sales in July - they are still off, year over year, considerably, but they are up from the month before.
Los Gatos Single Family Home Statistics - Closed Sales
Trends At a Glance
Jul 2009
Previous Month
Year-over Year
Median Price
$1,185,000
$1,080,000 (+9.7%)
$1,347,500 (-12.1%)
Average Price
$1,333,290
$1,082,350 (+23.2%)
$1,492,650 (-10.7%)
No. of Sales
28
27 (+3.7%)
26 (+7.7%)
Pending Properties
23
40 (-42.5%)
23 (0.0%)
Active
168
157 (+7.0%)
164 (+2.4%)
Sale vs. List Price
96.0%
95.8% (+0.1%)
98.3% (-2.4%)
Days on Market
62
66 (-6.3%)
31 (+96.8%)
Los Gatos Condominium and Townhouse Statistics - Closed Sales
Trends At a Glance
Jul 2009
Previous Month
Year-over Year
Median Price
$518,000
$635,000 (-18.4%)
$668,000 (-22.5%)
Average Price
$534,806
$615,000 (-13.0%)
$605,600 (-11.7%)
No. of Sales
8
7 (+14.3%)
5 (+60.0%)
Pending Properties
12
9 (+33.3%)
5 (+140.0%)
Active
45
52 (-13.5%)
54 (-16.7%)
Sale vs. List Price
99.2%
95.4% (+4.1%)
95.3% (+4.2%)
Days on Market
86
112 (-23.7%)
44 (+94.9%)
What does it mean?
Clearly, while single family home sold prices are higher than a month ago, this is not the case for condos and townhomes (which have been "beat up" in this market, all over San Jose and also countywide). This is our first clue that "the Los Gatos Market" is again not one unified block, with everyone benefitting equally. Rather, there are micro-markets. Part of the market is advancing strongly - the lower priced homes in the Los Gatos School District - and those homes are selling and appreciating briskly. Other parts of the market, such as the townhouse and condominium market, the luxury market, and the homes not in the Los Gatos school area, are not faring as well. In fact, most homes in Los Gatos are not selling at all, and overall, it is still very much a buyer's market, but it IS improving.
Below, please see a chart displaying the "market barometer" for Los Gatos. NB the gap between the number of properties on the market (168) and those sold (28) - divide the former by the latter to get the "months of inventory", which is 6 months right now. According to the National Association of Realtors, 6 months is a "balanced market" or a "neutral market".
How can this be? How is it possible for it to be a neutral market (or in some segments of Los Gatos, a buyer's market) when prices are rising (and homebuyers are experiencing multiple offers in places)?
It's not happening in every segment of the Los Gatos market, that's how. The homes that are selling are doing well. But many - most - remain unsold.
Broad sweep - here's a view of inventory by Los Gatos zip code (95030 and 95032):
As you can see, inventory is rising among homes in the 95030 part of Los Gatos, but falling among 95032 (often more affordable).
Here's the 95030 zip code area by price quartile:
And here's the 95032 part of Los Gatos by price quartile:
Unfortunately, I cannot break out the school district differential with this subscription, but anecdotal information indicates that homes "in the schools" are the ones selling with multiple offers if they are priced low (close to or under $1 million). So I went to the MLS and checked a few numbers myself.
Right now in 95030 and 95032, there are 47 single family homes for sale in the Campbell Union High School District (meaning Leigh High & Westmont High), and 4 closed sales of the same in the last month. That is an 11.75 month supply of inventory.
Right now in 95030 and 95032 there are 159 single family homes for sale in the Los Gatos-Saratoga High School District, with 28 closed sales in the last month, which is a 5.67 month supply of inventory.
Price point aside, the school district is the driving force.
List prices by zip code in Los Gatos:
Prices are rising more in the 95032 part of Los Gatos than in the less-affordable 95030 part of town. Knowing what we do about the months of inventory, what we see are that the most affordable homes with the schools are the "hot" segment of the market.
What homes are these? The ones where a buyer can get into a single family home for close to a million dollars or less (up to about 1.3 mil max) and enjoy the Los Gatos Schools. Even so, houses must be "turnkey" and priced aggressively.
Homes outside of this parameter - which is most of the Los Gatos real estate market - are struggling.
Please contact me for help in buying or selling a home anywhere in Los Gatos.
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.
Currently for sale, available
Available
Avail Short Sales
Avail REOs
% Normal Sales
Santa Clara County SFH
2871
584
214
72.20%
Santa Clara County Condos & TH
915
252
71
64.70%
Los Gatos & Monte Sereno SFH
201
14
5
90.55%
Los Gatos & MS Condos & TH
51
4
0
92.16%
Sold & Closed within last 30 days
Sold
Sold Short Sales
Sold REOs
% Normal Sales
Santa Clara County SFH
1707
229
522
56.00%
Santa Clara County Condos & TH
362
47
123
53.04%
Los Gatos & Monte Sereno SFH
33
2
0
93.94%
Los Gatos & MS Condos & TH
9
1
0
88.89%
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.
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)
Most homes are neither fully original nor fully remodeled. Most homes are "somewhat updated" or "somewhat remodeled". To get them into shape to pass inspections (there's not really a pas-fail grade, it's more "items of concern", health and safety issues, or serious structural issues, and big cost items), most homes will require some work. And this is often a surprise to homeowners. Sellers don't usually know that they have termites, for instance. They often don't realize that the electrical system they've been living with isn't entirely safe. They won't know until and unless they get the home professionally inspected.
When the sellers do the repairs, updating (and staging), often they recoup far more than that amount because buyers feel confident knowing that there are no major issues or concerns. When the buyers pay for the improvements to the home after closing, often they get a better deal on the house. It's a risk - return ratio. Buyers will pay more when they feel sure that the home is in good shape (and it looks better too). They pay mcuh less when there's the unknown of "how much will it cost to fix it?" and when they have to live through doing the work.
If you are interested in improving your net from a home sale or in paying less for a property, please contact me and we can discuss your plans and strategy. If you are thinking of becoming a Los Gatos, Saratoga or San Jose area home seller, please also see 
A couple of weeks ago I was introducing some buyer clients of mine to various neighborhoods in Los Gatos and Cambrian Park to give them a general feel for the area, real estate prices, home styles, and so on. 
As you can see from the photo above,this house enjoys the proximity of many beautiful, large trees. It is a lovely setting. Inside, it's evident that the owner has updated and remodeled the home - the kitchen is beautiful and features slab granite countertops, for instance. The layout is nice, with both a living room and a family room. Finally, a major plus of this home and neighborhood is unseen: this property enjoys the highly regarded Los Gatos School District.
Details on 208 Las Miradas Drive:
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