November Los Gatos Real Estate Market Update

How's the Los Gatos Real Estate Market Faring?

There are many ways of viewing the Los Gatos real estate market. One approach includes looking at the homes which are currently for sale, or the "active listings". Altos Research, to which I subscribe, uses this data in analyzing the state of things for the realty market in various cities, towns, and zip codes. Today we'll look at these active listings in all Los Gatos zip codes, both single family homes and condominiums, and view the data by price quartile whenever the trends seem quite divergent from one price point to the next.

Los Gatos Real Estate Pricing for Single Family Homes by Zip Code

First, let's look at Los Gatos houses in the 95030 area. We'll begin by viewing list prices by quartile.

Except for the highest priced homes, it seems that asking prices are close to flat in this part of Los Gatos. It doesn't appear to be a market crash when these numbers are viewed.

Next, let's see how prices are looking in 95032 among single family homes in Los Gatos:

Again, it's fairly close to flat pricing now (after clear declines earlier this year) except in the most expensive homes, which really constitute the luxury or estate market, which looks to be having steeper declines. The luxury market in both 95032 and 95030 appears to be hurting the most.

And finally, the same type of data but for the Los Gatos Mountains (zip code 95033 - this is a broad area which is not actually in the Town of Los Gatos but instead is county area).

Interestingly, the luxury homes in the mountains seem to be holding their own better than those "in town". It appears that all price points in the mountains are doing approximately the same in this realm.

Los Gatos Real Estate Pricing for Condos and Townhomes by Zip Code

The Silicon Valley condominium and townhouse market is often a little different than the market for single family homes, and this is true in Los Gatos as well as in much of San Jose.  Below, please note the more chaotic path that pricing has taken in the Los Gatos condo market this year:

And oddly, much different in 95032:

Although these two Los Gatos zip codes are quite different from each other, both have been seeing some rises from a low spot earlier this year. The 95030 prices are higher than they were at the beginning of the year in all quartiles. The 95032 prices are higher for the most expensive condos but lower for the bottom two quartiles. I believe that this is because of school districts - the lowest priced condos (except for The Commons, a senior condominium complex) are most all in the Campbell Union High School District rather than in the Los Gatos - Saratoga High School District.  (All of 95030 is in the Los Gatos schools area, and perhaps half of 95032 is in the same district and half is in CUHSD instead.)

Inventory of Los Gatos Homes for Sale

Inventory of Los Gatos homes has been rising in most segments of the market. (There are no townhouses or condominiums in the 95033 zip code.)

The lowest priced condos in the 95030 part of Los Gatos seem to be getting absorbed decently - inventory has barely risen there at all this year.

Days on Market for Los Gatos Homes for Sale - All Zip Codes

Los Gatos Houses in 95030:

Los Gatos Houses in 95032 are seeing declines in the average days on market:

And for condos and townhomes in Los Gatos, 95030, it looks bizarre, with lots of volatility and large ups and downs (not unlike the stock market of late):

Lastly, Los Gatos days on market for condos in 95032:

So what can we say of the general trends in Los Gatos homes for sale? For most Los Gatos homes:

• inventory is rising
• days on market are rising
• the condo market was faring worse earlier this year, but is improving now
• the single family home market has been sliding this year, but overall, it has not been steep

How does this compare to nearby areas? The "median market action index" combines the key factors to come up with a market pulse (higher is in the sellers favor, and lower is in the buyers favor).  If we look at just single family homes in the two Los Gatos areas  plus Saratoga (95070) and the Almaden Valley area of San Jose (95120), it looks like "we're all in the same boat":

The two Los Gatos zip codes are now in the same place. San Jose is doing a little better and Saratoga better still.  But the general trends for almost all nearby Silicon Valley real estate markets is a deepening buyers market.

Please call or email me if you'd like to discuss your particular situation.

What Does It Take to Sell Your Silicon Valley or Los Gatos Home in Today's Market?

The Silicon Valley real estate market is very much in the buyer's favor right now; in Los Gatos, San Jose, Saratoga, Campbell and elsewhere in Santa Clara County, most homes are not selling at all or only selling after a long time on the market and with several painful price reductions. Prices are falling, year over year,  in most of the valley - Monte Sereno appears to be the only possible exception.

That said, some homes are selling just the same. In Los Gatos, there are 248 houses and condos currently for sale. In the last month in 95032 and 95030, 21 houses and condos have closed escrow and 23 have gone sale pending in the same timeframe. So the percentage of homes selling is a little under 10%.

The question to ask yourself, if you want to sell your home right now, is "what does it take to sell my Silicon Valley home in today's market?"  You might also ask "how can I get the most money for my home in this market?"  What will it take to sell fast and for the best price this market will bear when only ten percent of listed homes are selling in Los Gatos? (It is worse in many other parts of the valley.)

1. Begin By Understanding Market Conditions and Pricing Realities for Your Neighborhood

To maximize your position, it is imperative to begin by understanding today's Silicon Valley real estate market and the real estate market in your home's neighborhood. For years we have experienced a seller's market in which every time a home sold, everyone else's home rose in value. We could price a little high and the market would catch up sooner or later. But not now.

Now, instead, prices are declining and one of the most important things for Los Gatos home sellers to understand is that they need to get ahead of the curve in pricing and be swift to adjust to changing conditions. (Cyberhomes.com puts the Los Gatos 95030 zip code as having lost 5% since last month and 95032 as having lost 3% since last month.)

Two kinds of homes seem to be selling now: completely remodeled homes which are priced well, or homes needing updating and remodeling that are priced at rock-bottom numbers, possibly even below current market value. Average homes with average prices are not selling. Homes priced in the bottom 10-20% are selling. These are the "shiny pennies". They are the homes in which owners understand that "it's a beauty contest and a price war".

There are several places online where you can get  real estate market trends in Silicon Valley as well as home values calculated online. These are automatically generated and do not involve an agent's input. Among them are these:

Silicon Valley Real Estate Report - Recent Listing & Sales Activity (view by map, no registration)
Cyberhomes.com 
Zillow.com

Because precise home valuations involve things that online estimators can't factor in (like school district, the presence of power lines, proximity to positive or negative things), your best bet will be to talk with a knowledgeable and experienced Realtor, who will factor in current market conditions for your exact neighborhood and type of home (historic, view property, etc.).

(To read more on pricing, please read this article on my main website: Pricing Your Silicon Valley Home Competitively and also Benefits of Realistic Pricing.)

2. Clean, Declutter, and Stage Your Silicon Valley Home to Sell

Buyers respond most favorably to homes in which they can see themselves. Too many of your personal effects and it's hard for them to see themselves living there. Getting your home sold today requires depersonalizing "your home" and making attractive and easy for buyers to see as "their home".

Most of us live in a somewhat cluttered way in our homes and yards, and thinning out the extra stuff that won't help to sell your home can be difficult both physically and emotionally. If you hire a good agent early on, he or she will assist you in knowing what is best to keep out and what's best to remove for selling.

Also during this stage, you'll want to get your home and garden into good shape, whether it's sprinklers that aren't working or windows that won't open. Clean and fix!

Sometimes getting through this stage can be overwhelming. Perhaps you'd like a hand? A resource I have used many times is "At Your Service", a concierge service at no cost to you. Karin Doll-Nichols runs this helpful company and she can hook you up with a handyman, a landscape person, someone to assist you in downsizing, you name it. My experiences with At Your Service have been very positive, and the prices are competitive too.

(For more information on this topic, please read Staging Your Silicon Valley Home, an article on my main website.)

3. Pre-Sale Inspections Are The Norm in the West Valley Communities of Silicon Valley

If you are serious about selling you home in Los Gatos or anywhere in Silicon Valley, it's important to also do pre-sale inspections. Depending on what type of home you have (condo, townhome, single family home or large estate), you could need anywhere from two inspections to perhaps a half dozen of them. Most sellers will need to have a pest (or termite) inspection and a home (or property) inspection. (For more information on inspections, please see my post on another blogsite of mine, What Kinds of Inspections and Reports Are Needed For Buying and Selling Homes in Silicon Valley? )

Home inspections often uncover surprises and having pre-sale inspections will enable you to repair or replace defective items, or if they are items you do not want to fix, at least give you the knowledge to counter defects out of any offers that come in. My suggestion is to allow a couple of extra weeks, at least, to do any unplanned repairs prior to the home going on the market. Buyers today are picky but they will write stronger offers if they know the condition of the home they want to buy, and stronger offers still if they feel that any issues are already resolved.

The quality of inspectors you hire can impact your transaction greatly, so I strongly advise that you hire your agent first and get recommendations on good inspectors prior to getting an inspector involved. Good Realtors know many inspectors by reputation or through past dealings and can assist you in hiring those who are reputable, honest, and fair.

 Finally. . .

It will be helpful to view things with the buyers perspective to understand what makes them choose one home and leave nine others behind. As a seller, view your property as being in competition with the rest of the homes. Ask yourself which home would you choose? Which one is the best value?

There are many important issues to tackle in order to not just sell your home, but to sell it for top dollar in the current market. Today we've addressed the initial areas only - this is just the starting point!  Perhaps the best thing you can do is get educated about the process and then hire well. There are hundreds of agents in close proximity so there's no shortage of choice. You can afford to take your time and be picky about selecting an agent who is knowledgeable, experienced, accessible and who will represent you well every step of the way.

If you would like to discuss selling your Silicon Valley home, please call or email me for a free, no cost, one hour consultation. My book, "Get the Best Deal When Selling Your Home in Silcon Valley", is my gift to you when you meet with me. It's a highly helpful resource that can get you started in selling your home.

Closed Sales of Homes in Los Gatos: Yes, The Numbers Are Down

How is the Los Gatos real estate market doing?

For many homesellers in Los Gatos (and Silicon Valley generally), and for their Realtors, the real estate market is extremely challenging right now. Buyers have been wary for many months already, but now they're concerned about a recession and job losses, not just the possibility of a real estate sales price that won't hold its value later. It is a deepening buyers market overall, but especially within the market for single family homes.

So what is happening with Los Gatos home sales?

Inventory is rising among single family homes and condos and townhomes. Right now there are 197 single family homes for sale (it was over 200 last week) and 44 condominiums or townhomes. A year ago, it was 113 houses and 23 condos. A month ago it was 184 SFH and 45 condos, and a year ago October it was 104 SFH and 22 condos.

Sales were down in October. We had a surge of sales in September, but then the meltdown on Wall Street happened and buyers put on the brakes. In Oct 2007 there were 12 condos closed, but in Oct 2008 just 9 (and with far more inventory).  In Oct 2007 there were 17 houses closed, but in Oct 2008 just 13 (and again, more inventory).

The real estate market in Los Gatos is mixed, depending on the type of housing (house, townhouse, mulit family dwelling, mobile home or other), the price point (entry level vs luxury), zip code, school district, and more. Of the 13 homes that closed last month, 3 were over $3 million. Surprisingly, 5 were under $1 million. Most often, the vast majority of sales is between $1 million and $2 mil or $2,5 mil, but the middle seems to be shrinking now. It's a strange phenomena! Low priced homes are being bought because, I believe, buyers can "get into Los Gatos" at great prices. The luxury home market is often independent of financing, so those homes are still selling fairly well (despite the loss of stock value in Google and Apple) for now. The middle price range, which often represents move-up buyers who do need at least some financing, appears to be the most impacted market right now.

 

Condos vs Houses: Which Are Selling Better in Los Gatos?

The Los Gatos condo market, which was really struggling earlier this year, has been improving since May. The Los Gatos single family home market, though, is the opposite: it has been worsening steadily since May. The condo market is very small compared to the single family home market, though, so the overall picture is a deepening of the buyers market in Los Gatos.

Below, please find a bar graph that makes these trends clear:  

The Los Gatos real estate market is made up of many micromarkets. For information on your particular home buying or home selling needs in Los Gatos, please contact me today.

Is The Economic Crisis Impacting Los Gatos Home Sales?

Several of my buyers have recently decided to hold off until things calm down with the economy. So I wondered if this was widespread or not. Tonight I checked the sales in Los Gatos (zips 95030 and 95032) for the period of 10/1 - 10/25 this year and last year. Sales are slower than last month but still ahead of last year, generally.

Among single family homes in Los Gatos, there have been 15 homes that went sale pending in that time frame this year, wheras there were 8 last year. For condos and townhomes it was 4 this year and 5 last year - close enough to not be significant in my opinion.

Right now, it does not look terribly bad. Sales are mostly ahead of last year at this same time. That said, we'll know more when ALL the factors are in - price points, list price to sales price ratio, days on market, etc.

Is the Financial Crisis on Wall Street Causing Fewer Home Sales in Los Gatos?

I have never followed the stock market so much as I have in the last two weeks. [My primary concern is my kids' 529 college savings plan, where the money is all in an index fund (that's how CA has it set up).]And I wondered if Los Gatos home buyers have their downpayments in stocks and may also be holding back, so I took a look at very recent sales data to see if there are any new trends.

From my initial study of the pending sales in Los Gatos and Monte Sereno in the 95030 and 95032 zip codes, it does not appear that a slowdown in buying is happening over & above what we were already experiencing prior to the roller coaster ride on Wall Street.

sales initiated	Houses	Condos
10/1/2008 - 10/11/2008	7	3
10/1/2007 - 10/11/2007	7	3
09/20/2008 - 09/30/2008	4	5
09/20/2007 - 09/30/2007	4	4

It may be that we will see a change in the Los Gatos real estate market that later we'll attribute to the financial catastrophe that is going on, but right now, I'm not seeing it.  Perhaps the Los Gatos and Monte Sereno home buyers have their downpayment readily accessible in cash. (That is the case with my buyers.)

Condos and Townhomes in Los Gatos: Market Update

The condo market in Los Gatos is improving after a few rough months. It remains a buyer's market, but not so deep a one as we saw in late spring and over the summer.

Although days on the market for Los Gatos condos and townhomes are considerably longer than they were a month or a year ago (78 days in Sept vs 32 in Aug and 33 a year ago), and the list price to sales price ratio is slipping (96.4% in Sept vs 98.7% in Aug and 99.2% in Sept 2007), there are some signs of improvement.  The number of homes on the market is the same, 44, as last month, but the number of closed sales has risen from 6 in August to 8 in September.

Surprisingly, the sales prices are up too (both average and median), both for month over month and year over year. Here are those numbers (care of The Real Estate Report, a subscription I have):

Trends At a Glance	Sep 2008	Previous Month	Year-over Year
Median Price	$850,000	$700,000 (+21.4%)	$800,000 (+6.3%)
Average Price	$768,021	$619,167 (+24.0%)	$741,417 (+3.6%)

And finally, one of the most helpful ways of understanding the market is the absorption rate, which may be calculated as days, weeks, or months of inventory. It's a reflection of how long it would take to sell off the current inventory if no new homes came on the market and homes continued to sell at the present rate. Below, please find the months of inventory for condos and townhomes in Los Gatos. NB that there is recent improvement in the numbers:

Next, here's a view of the condo and single family home market of Los Gatos side-by-side:

 If you'd like more information on how the Los Gatos townhome and Los Gatos condo market are faring, please visit my Real Estate Report for an interactive online report for all of the Silicon Valley real estate market.
 

Please call me if you'd like a private consultation about your real estate questions, plans, and hopes.


 

Los Gatos Single Family Home Absorption Rates and Market Conditions

The Los Gatos real estate market for single family homes is a bit of a mixed bag, with some indicators more positive than others, but on the whole, it's a deepening buyers market.

Below, please see the basic sales data on the closed single family homes in Los Gatos for September 2008. Note that saes are up, but days on market are longer, prices are mostly down (except the year over year average sp), and the list price to sales price ratio is dropping.

Trends At a Glance	Sep 2008	Previous Month	Year-over Year
Median Price	$1,205,000	$1,389,980 (-13.3%)	$1,280,000 (-5.9%)
Average Price	$1,609,960	$1,669,850 (-3.6%)	$1,346,230 (+19.6%)
No. of Sales	27	22 (+22.7%)	17 (+58.8%)
Active	170	138 (+23.2%)	106 (+60.4%)
Sale vs. List Price	94.9%	96.5% (-1.7%)	97.6% (-2.8%)
Days on Market	71	51 (+39.0%)	44 (+61.3%)

A good way to judge the market overall is by crunching the numbers to get the months of inventory (or days, or weeks of inventory), also known as the absorption rate. Next, please view the Los Gatos area (including Monte Sereno and some parts of Cambrian Park and possibly Campbell) known as "area 16" in our MLS.  This lines up almost exactly with Los Gatos and the zip codes 95032 and 95030:

As you can well see, it is going to take more and more time to sell off the current inventory of single family homes in the Los Gatos area. In fact, it is a strong trend that the buyers market has been deepening. The National Association of Realtors says that 6 months or less is a sellers market, but more than 6 months is a buyers market. We had a little dip in May through July where the sellers were under that threshold, but for the most part, it has not been much of a year for sellers in Los Gatos.

In most times, it's very challenging for buyers to purchase a home in Los Gatos as there are often multiple offers and high demands from the sellers. Buyers, now is your chance to get in at a reasonable time!  Sellers, if you want to sell, make your home gorgous and price it competitively!

To learn more, please visit my Real Estate Report online, an interactive monthly report that provides information for all of Santa Clara County, including Saratoga, Monte Sereno, Campbell, Almaden Valley, Santa Clara, Cupertino, Sunnyvale, etc., and separated by single family homes and condominiums and townhomes.