May 30, 2009
The Silicon Valley real estate market continues to improve, generally. It is a seller’s market in the lowest priced homes, especially if they are in good areas such as the Rosegarden or Naglee Park. In those parts of Santa Clara County, we’re seeing multiple offers and overbids.
As the price point rises, though, the market cools. In the most expensive parts of Silicon Valley, homes are not selling well and it remains a buyer’s market. (Six months of inventory is considered balanced, 7 or more than 7 is a buyer’s market, and 5 or less than 5 is a seller’s market.)
In Cambrian Park, about half of all homes are selling and there are only 2 months of inventory. As of today, there are 100 single family homes available in Cambrian, 118 single family homes in some stage of “sale pending” and 51 have closed escrow in the last month. (Months of inventory = 1.96 – it’s the inventory divided by the closed sales that month.)
In Almaden Valley, there are currently 113 single family homes for sale, 56 “sale pending”, and 25 closed in the last month. The months of inventory in Almaden, a more expensive part of San Jose than Cambrian Park, is currently 4.52.
In Los Gatos, we have 167 single family homes for sale, 44 pending sales, and 25 closed in the last month. Months of inventory = 6.68.
In Monte Sereno, there are 29 houses available, 4 under contract, and 4 which closed escrow in the last month. Months of inventory is 7.25.
Finally, in Saratoga, 164 homes are for sale, 38 are pending sale, and 19 have closed in the last month. The months of inventory = 8.63.
That said, within each market that are smaller markets and a lot of the performance depends on how well the home in particular appeals to a broad audience, its general condition and how aggressively its priced. Many sellers are just “testing the market” and those homes may or may not sell.
What did sell recently in Los Gatos? Below, have a peek at some of the success stories. These are the houses in Los Gatos that not only got an acceptable offer, but passed all the hurdles of inspection, appraisal, and financing and made it to the finish line, the closing table.
|SOLD||Beds||Baths||Home SF||Lot SF||List Price||Sales Price|
|Rosalie Ct||5||3 1/2||3,034||15,576||$1,699,990||$1,650,000|
|Johnson Av||4||2 1/2||2,125||6,250||$1,649,950||$1,560,000|
|Vista Del Monte||4||2 1/2||2,220||10,800||$1,699,000||$1,550,000|
|Frank Av||4||2 1/2||2,765||16,960||$1,399,000||$1,275,000|
|Loma Alta Av||3||2||2,254||4,840||$1,299,000||$1,225,000|
|Old Adobe Rd||5||2 1/2||2,461||10,455||$1,099,950||$1,035,000|
|Via De Tesoros||6+||3||3,505||10,500||$949,900||$910,000|
|Cambrian View Wy||4||3||2,073||8,760||$864,900||$800,000|
|Jamie Ct||4||2 1/2||2,339||8,008||$756,218||$756,218|
|Blossom Valley Dr||4||3||1,602||7,920||$749,000||$749,000|
|Creekside Village Dr||3||2 1/2||1,390||1,742||$749,000||$675,000|
|Blossom Hill Rd||6+||3||2,784||12,144||$699,900||$610,000|
On average, homes are selling upwards of 95% of list price in Los Gatos right now. As you can see, some are selling right at list and occassionally one sells a little over.
What about prices? Generally, it appears that prices are still slipping in some areas but are level in others. We may be close to (or perhaps just past) the bottom. Time will tell.
In the lowest priced areas of Silicon Valley as well as some prime areas of the more expensive west valley, though, the multiple offers and overbids are driving prices up. For entry level buyers, it’s time to get off the fence. Home prices are rising and, equally importantly, interest rates are rising.
Those most negatively impacted right now are move-up buyers (who’d love to move up but are trapped by negative equity) and retirees who would love to sell and move to a retirement community but need to wait for more of a recovery. The retirees are doubly hit because they relied on retirement portfolios that may well be worth half of what they were worth a couple of years ago.
Where’s the opportunity in this market? First time homebuyers, this is as good as it gets. You can now purchase a home with only 3.5% down (though you’ll need another 2-3% for closing costs) with an FHA insured home loan. Not only are prices great, but there’s an $8000 first time homebuyer credit that you may be able to use toward your closing costs. This is not an open ended offer – hurry!