The Los Gatos real estate market had been cooling down, but suddenly the activity level is up noticeably, and when we get the statistics for December’s closed sales, I believe we will see a rise in pricing, too. At office meetings and with friends in the industry I am hearing many stories of multiple offers and overbids. In one case, a property I was watching (near but not in LG) sold for 16% over list price. Many are surprised by the surge in buyer interest, which appears to be strongest in the lowest priced homes which are in good locations and in excellent condition (meaning recently and thoroughly remodeled).
Market uptick in November: pending sales increase
Throughout Santa Clara County and San Mateo County, pending sales increased dramatically in November, and the ratio between active listings and pending sales narrowed (chart below). When this happens, meaning that the absorption rate increases, prices normally rise. The reason is simple: supply and demand. Typically, supply shrinks in fall, but demand does not always shrink as much as supply. Hence, selling in autumn can be good in that the odds of selling increase. That’s good for sellers. For buyers, it may be tougher to buy due to limited choices, but prices often are a little softer in the late months of the year than they are in spring. Bottom line: if you need to buy or sell, it can happen in the last quarter of the year. Buyers cannot be too picky, though, as selection is limited. (See similar data for the Santa Clara County real estate market on the Valley of Heart’s Delight blog.)
Active and pending listings in Los Gatos 95030 and 95032
Below please find a chart of 2019 active listings of single family homes in Los Gatos (MLS area 16, zip codes 95030 and 95032) in relation to the pending sales the same month. When active listings far outnumber the pending or contingent sales, it’s harder to sell and easier to buy. Conversely, when the two are closer together, a larger percentage of properties are going under contract. Notice how close they are in November of this year.