Los Gatos Real Estate Market Update

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.

Los Gatos History:
In The Beginning, There Were The Ohlone

The Ohlone:
First Inhabitants of Silicon Valley
and the San Francisco Bay Area

What was life like for the people who lived in the Los Gatos area before the colonists arrived?  For thousands of years before Europeans set foot in the beautiful Santa Clara Valley, the native people - who called themselves "Ohlone", meaning "the people" made this sub-tropical climate their home. (There were appx. 5000 of them living here when the area was colonized.) The Ohlone ranged from about Carmel to the south and up the Peninsula and across the East Bay, at the least. They were a mobile people who were hunters and gatherers. They made great use of tule reeds for clothing, housing, and bowls. The acorn (several types from several varieties of oak trees) was their staple food, made into bread, soup, and a type of hot cereal after it was leached with water. In a bad year for acorns, they could use the California Buckeye instead. Adorned with shell & rock jewelry and tatooed with cinnabar, they must have been a lovely people. They hunted, they fished, and they traded with other Ohlones. They followed the seasons to collect berries and seeds; their homes did not need to be permanent.  

Sadly, there are few traces of their presence here now - names like "Ohlone College" in Fremont remind us that they were here first. Sometimes we read in the papers of an old Ohlone burial ground being uncovered as new houses are being built. But there are no tribal Ohlone lands, unfortunately, and it seems that there are only a few Ohlones left now, and I believe most of them are also part Miwok (from the Yosemite area). As I understand it, the tribes who had a formal treaty with the later United States government were given lands, and those who did not have treaties did not get lands of their own to keep. Because the Ohlone were mobile (they did not create permanent houses), there's very little tangible left of their legacy. We have some early photographs and some beautiful baskets, but not a lot more. (If any readers of this have information they'd like to share, I would welcome the input warmly.)  

Los Gatos inThe Mission Period
& Spanish Land Grants  

In the late 1700s the California Missions were being founded by Spanish Franciscans. Spain had claimed this land as its own and it saw in the friars a way of cementing that claim. The friars, meanwhile, saw this as an opportunity to claim more souls for the faith. So with an alignment of "church and state" the padres made their way north from San Diego, placing most missions just a day's horseback ride apart (appx 30 miles) - and frequently up on a hill so they could be found easily. Spain gave out giant land grants to those who would settle and tame the land.  

Mission Santa Clara, at the heart of what we now call Silicon Valley, was founded in 1777. It was originally on the banks of the Guadalupe River, but as anyone who's lived here awhile can tell you, the Guadalupe is notorious for flooding - so that location did not work out. Floods, fires and earthquakes made a mess of the mission named for Saint Clare of Assisi and this church was moved several times before it settled into its present location, which is now surrounded by the beatiful campus of Santa Clara University. The Franciscans were given a very large land grant, which would include shared ownership of the New Almaden Quicksilver Mine. (A religious aside: St. Clare is the patron saint of communications, and I have to think she would smile that the Silicon Valley is at the heart of the development of the computer industry and communication brought about by internet and email.)  

Mexican Revolution & Mexican Land Grants 

Despite Spain's attempt to solidify its hold on California and Mexico with the Church, it was too far away to prevent the predictable revolution. When Mexico did declare its independence, it too claimed this area, San Jose and the Santa Clara Valley, as its own.  

So how was Mexico going to keep a tight reign on this vast land (when Spain couldn't manage it)? It likewise decided to go the way of land grants. Settlers were allowed to apply for a land grant and the initial requirement was simply that they live on the land.

Sebastian Fabian Peralta and Jose Maria Hernandez, brothers-in-law to each other, were out searching for good land so that they could apply for a land grant like other early settlers. While near what is now Vasona Lake County Park, the heard Mountain Lions fighting and screetching. The men understood that cats signaled the nearby presence of water, and they found what is now knows as the Los Gatos Creek.

They named the area "La Rinconada de Los Gatos", or Cat's Corner or The Corner of the Cats. This took place in 1839. They received a huge area of land, 6631 acres (one and a half leagues). The region stretched from about both sides of the Vasona area to beyond Quito Road and then in to Campbell. You can view a plat map, care of UC Berkeley, online.

Incidentally, their first adobe home was somewhere in that region along the Los Gatos Creek which is now part of Vasona Lake County Park. Sadly, we do not know the exact location of the home as no traces of it remain.

The Earliest Beginnings of The Town of Los Gatos  

In the 1840s logging was beginning to be important, and after the gold rush of 1848 local growth made it crucial. By the 1850s there was a road across the mountain path and Mountain Charlie was running his stagecoach across it. (During the heyday of stagecoaches, Los Gatos saw them come every 15 minutes during the busiest part of the day!) This was the wild west era, complete with horse thievery, stagecoach holdups and home robberies - it all happened here!  

By the 1880s fruit orchards had begun making an important appearance and with them came the railroad to get the fruit from local canneries to market. The first Los Gatos housing subdivision came about in 1877, though the 48 lots werent' for sale until 1881.  

By 1887 there were enough people settled in Los Gatos, 1645 to be exact, to incorporate into a town, so it was begun officially with 100 acres on either side of the Los Gatos Creek. In the 1880s Los Gatos saw the springing up of the "walk to town" areas: Edelen, Fairview Plaza, and Almond Grove. Then, as now, those were prized neighborhoods full of lovely Victorian style homes.

As you know, the Town of Los Gatos has grown and grown and is now more than 10 square miles with about 30,000 inhabitants, and its popularity has never dimmed. 

April is Green! It's "Keep Los Gatos Beautiful" Month

What does it cost to buy
a lot or land in Los Gatos?

(Updated Entry as of 3/27 the original links seemed to expire soon, so I'm using another method to bring you this information)

Have you ever wondered what it might cost to buy a parcel of land, maybe a view lot, and build your own home?

Any idea what it costs to purchase raw land in the Town of Los Gatos? Are you curious?

Right now, there are 23 parcels for sale in Los Gatos. I've assembled the list for you to view on another site of mine. If you're curious, have a look. You may not be surprised at the most expensive prices, but you may be surprised at the least expensive ones!

The links above go to this URL:

http://www.popehandy.com/organizer/psr_list.cfm?k=I0&i=KCNL51LV43VML111

If you're prompted for an email and password, use my email, Mary (at) PopeHandy.com and the PW is Land.

Are there many short sale listings
in the Los Gatos, Monte Sereno, Saratoga area?

In some parts of Santa Clara County, a high percentage of homes on the market in the lower price ranges especially are offered as "short sale" listings. For example, recently I've been assisting buyers of single family homes in the $500,000 price range in parts of San Jose (such as Evergreen, Blossom Valley, Santa Teresa and South San Jose). The vast majority of those listings, perhaps 95% or more, are "short sales".

But that's not happening in Los Gatos, Monte Sereno or Saratoga. Short sales pull values down, so if you live in this lovely foothill area, be glad that the real estate market here is healthier!

Here are the numbers of local short sale listings as of today, March 26, 2008:

Mini Market Update:
The Los Gatos Real Estate Market

Want to Buy a Home in Los Gatos?
Some Tips to Get Your Home Purchase Offer Accepted!

We read about the real estate market being a buyers market, and some folks think that means that houses, condos and townhomes will always sell for much less than the asking price.

That just isn't the case. There's a whole lot of "it depends" going on. Take each property on its own merits, do some homework and strategize how to get the best deal when buying a home.

Some sellers, for example, deliberately underprice their homes to attract multiple offers. This, of course, pushes the price up and the sellers are often very pleased with the results. (It is usually far more effective than "testing the market" with a high price.) So if it's underpriced, don't assume it'll sell for less.

How should you evaluate Los Gatos real estate when you're thinking of writing an offer? I go through this with my clients all the time, so let me give you a few tips here.

First, make sure you understand the current market conditions for the area and price point you're interested in. I put out a monthly Real Estate Report (about the 10th of each month) that will help you understand the city or region - such as Los Gatos/Monte Sereno, Saratoga, or districts of San Jose like Cambrian Park.  But there are lots of micro climates in real estate, even within a town or a zip code! So before writing up a purchase agreement, look at comps and ask your agent to help you understand what's happening locally. You'll want to know both the list price to sales price ratio and also what homes are generally selling for in that particular neighborhood. Once you know those two things, you adjust for things like improvements, condition, precise location, and other issues.

• In the Town of Los Gatos, homes are selling at an average of 97.7% of list price. How will sellers feel about offers that are at 90% of list price or worse? You're right if you guessed that they'd be insulted and upset.
• Upset sellers don't tend to be cheerful in negotiating; trying to get a "killer deal" may prevent you from getting the house at all! 
• When a lowball offer comes in, most often, sellers give a high counter offer. (What constitutes a lowball offer varies, but 10% below list is usually taken badly by the seller.)

Second, learn as much as you can, before writing an offer, about the home's condition. Find out if there are disclosures, inspections and reports online. If so, read them first to get a true picture of the property's condition. If it's in great shape, it will be worth more, and if there are a lot of repairs, it will be worth less. No resale (or used) home is perfect, so do not expect a 45 year old home to be flawless. (I often see this mistake: buyers will view homes at the top of their price range and when they find flaws in the home, start subtracting based on their budget rather than based on market value.) Do consider how it compares to others like it on the market, that are pending sales or recently sold in terms of condition.  The best agents do all this upfront, or at least as much as possible. If you happen to be viewing a home that is a short sale, it is highly unlikely that the seller will have any inspections...because there just isn't any money with which to do them.

Third, ask upfront, through your agent, what the seller wants or needs to be happy. It could be price, it could be terms. (Terms are the other important aspects of the offer such as required repairs, length of escrow, things included or not included.) You may or may not be able to give it to the seller, but knowledge is power and often the price may be lower if the terms are more favorable. If the seller needs a quick close, you may be able to buy the home for less if you can move fast. Same with "as is" or other clauses that make the seller's life easier. Seniors often have a difficult time clearing out their property, so if you, as a buyer, offer to take on the seller's old cans of paint or other "headache" items, you may create a sense of ease and goodwill that may result in a better price for you. I have seen this happen many times!

With this third point, I should stress that some agents will not want to take the extra step and pick up the phone to talk with the listing agent. There are some agents out there who never call, but simply fax over an offer. To the better, more professional agents, this is really annoying and smaks of laziness and non-professionalism. Listing agents want to know when an offer is coming in. They may tell your agent important information that enables you to write a cleaner offer (that perhaps will not need a counter offer if it's right the first time.) Please make sure that your agent will phone ahead, do a basic inquiry and make a good impression of you to the listing agent and seller. Transactions are about people as well as business and this is an important aspect you should not ignore.

In today's market, which varies wildly from one zip code and price point to the next here in Silicon Valley, goodwill still goes a long way. So let me add a few closing tips:

• If you happen to meet the seller, try to be friendly and respectful - sometimes if the seller simply likes you, it can go really far in making the transaction together (remember, buying and selling is emotional and not just a business deal!).
• Make sure you hire an agent who will also try to put a best foot forward for you. If there are multiple offers  (which does still happen!), it may come down to whom the listing agent feels best about working with. Reputation matters, and so does the agent's professionalism.
• If it is multiple offers, and there are disclosures online, read them, sign them, and turn them in with your offer if at all possible. The seller and listing agent will know you are not going to be surprised later and back out. Even if it's not multiple offers, the seller will feel more confident if he or she knows you have read the inspections and truly understand what you are trying to purchase.
• Most Realtors in Los Gatos will be looking for a 3% initial deposit and a pre-approval letter from a reputable source (not an online entity). In some parts of Santa Clara Valley, smaller deposits are the norm. In Los Gatos, 3% is strongly preferred and at the least will be expected when contingencies are removed.
• Write a letter. Make nice. Tell the seller why you like their house.
• Is the house really overpriced? If so, have your agent politely explain the reason behind your offer price.
• Is the house not overpriced, but not selling and you can only afford so much? That kind of honesty can work too. Just tell it like it is. Talk to your Realtor, but something like "Mr. and Mrs. Seller, I realize that your home is worth XYX amount, but unfortunately I don't qualify for that much. I would like to buy your home, but the most I can afford is XY amount. In turn, we'll take it as-is and do a three week close, and give you a one week free rent back, and we sincerely hope you will consider our offer...."

Stories float around Los Gatos, Monte Sereno, and Saratoga of transactions that never came together because the buyer insulted the seller. About 10 years ago, I had a listing and an offer got faxed in (no phone call) and it was just an awful, lowball offer. The purchase agreement was 10% below list price and had a ton of bad terms in them. My seller ripped the offer into quarters and took the house off the market.  And there was one story I heard, a few years back, of a buyer who asked the seller to leave the family's dog too. The seller was angry and would not sell the home at any price!

The average and median prices are helpful to understand what's happening overall. Any home, though, may be different from the average or median, and the sellers may have different circumstances. If you'd like to get a great price on a Los Gatos home, follow the above guidelines (and begin by hiring your buyer's agent carefully!) and you will greatly improve your odds for success!

Call or email me for assistance in buying your next home in Los Gatos!

Mary Pope-Handy, Realtor,  CRS, ABR, e-PRO, SRES, ASP, RECS, CNHS, ACRE
Helping Nice Folks to Buy & Sell Homes Since 1993 - 15 Years Experience!
Co-Author: "Get The Best Deal When Selling Your Home In Silicon Valley"
Keller Williams, Cupertino, CA  (Serving Los Gatos, Saratoga, Cambell, San Jose's communities of Cambrian Park, Almaden Valley, Willow Glen,  and all of Silicon Valley)
877 397-5391 (Direct/Toll-Free/Fax);   408 204-7673 (Cell)
www.DelightHomes.com    www.ValleyOfHeartsDelight.com   
email: Mary (at) PopeHandy.com