Los Gatos Short Sales: Snapshot of Today's Activity

March 27, 2010

The Los Gatos Short Sale Real Estate MarketWhat’s happening with short sales in Los Gatos?

In the 95030 & 95032 zip codes and with a Los Gatos mailing address (so not necessarily the “incorporated” part that actually belongs to the town per se), for condos, townhomes, houses, and duet homes onlyhomes, right now there are

14 for sale or available (8 houses, 6 condos or townhomes)
16 sale pending
3 closed within the last 30 days (2 houses, 1 condo/TH)

Of the active listings, two of them have been on the market for close to a year.

Info on the Los Gatos short sales which are sold & closed recently:

Of the solds, 2 were houses and one was a townhome. The houses sold for appx 5% less than list, the condo sold for almost 5% over.

If someone were shopping specifically for a Los Gatos short sale, the months of inventory for this subset of the real estate market is currently 4.6 MOI – a seller’s market.  And, like in the rest of the market, the good ones go relatively fast. If the home is well priced, nicely presented and appropriately marketed, there are good odds that the home will go under contract.

The average Days on Market of the solds is 50 (but that’s a bit unfair as their numbers were 114 for the townhome and 51 and 12 for the houses).

Average length of escrow (time between everyone agrees on the contract and when the home actually transfers ownership): about 3 1/2 months. (Most escrows close in about 30 days now, unless they’re FHA backed financing, in which case 45 is more typical.)  This is the hardest part of the whole process – it is very long, with lots of extra steps and contingencies involved, which means there are loads more opportunities for something to go wrong.

What are the odds that a short sale listing will sell and also close escrow?

It used to be that very few short sales would ever make it to the closing table.  A couple of years ago, it seemed that only 20% of short sales were ever closing.  Things are improving, though.  It takes a lot of time and effort, but more often than not, they are selling. (And this is good for everyone.  Banks only make about 40 cents on the dollar on homes they take back in foreclosure, but they make about 65 cents on the dollar in a short sale. It’s all about loss mitigation.)

I ran the numbers and chased down the history on part of the Los Gatos short sale market this afternoon.  (95030 and 95032, houses & duet homes only.)

For the period of January 1, 2009 to June 30, 2009, there were 20 different homes listed for sale as short sale listings in Los Gatos, 95030 or 95032. (Some were listed more than once, by different brokers perhaps, so this is just per address.)  As of today, a year later, here’s the breakdown of what happened to those 20 properties:

12 are sold and closed – that’s 60%
3 are still on the market
1 is currently a pending sale
4 are off the MLS (show as expired, cancelled or withrawn)

Of the four removed from the MLS, some may have sold privately, been lost to foreclosure, or perhaps the owners were able to work out some other solution, such as a loan modification or getting a tenant into the property to help make the payments. 

Overall, though, we do know that 60% of the short sales listed a year ago did eventually sell and close.  Most of the rest are still trying.   

Whether you’re a buyer or a seller interested in working through a short sale, this change in success rates is good news.  You will still need time, skill and patience to work these through, but they are an opportunity – one that seems to be growing all the time. 

Please also see these posts for more information on Los Gatos Short Sales

Silicon Valley Short Sale Listings: Tracking the Numbers in Los Gatos, Monte Sereno, Saratoga and the Cambrian Park Area of San Jose

Browse Short Sale Listings & Bank Owned Properties for Sale in Los Gatos (on my other blog, the Valley of Heart’s Delight)

Are There Many Short Sale or Bank Owned Homes for Sale in Los Gatos?

November 16, 2009

Are there bargain homes to be found in Los Gatos (and Monte Sereno), as in a lot of short sales or bank owned houses, condos & townhomes on the market? These types of properties have been in far shorter supply in the Los Gatos area than in most of Silicon Valley (San Jose, Santa Clara County).  Yesterday I logged onto MLSListings.com and did the research on the “Area 16” or Los Gatos – Monte Sereno real estate market – tedious, but interesting. (Area 16 includes Monte Sereno, consists of the 95030 and 95032 zip codes and a sliver of Campbell and San Jose, Cambrian Park – but is about 95% Los Gatos).  Results below:

Los Gatos home sale types: regular, short sale, bank owned (REO) houses, condos and townhomes as of Nov 15 2009

If you are a Los Gatos homebuyer, you’ll find that there are not very many distressed properties on the market. 

Los Gatos Houses for Sale 

Of the 142 active listings in “area 16” (the Los Gatos area, including Monte Sereno and an exceedingly small sliver of Campbell and San Jose – Cambrian Park), only 10 are distressed homes for sale (short sales and REOs combined).  That’s just 7% of the available pool of Los Gatos houses for sale are distressed properties (4% short sale, 3% bank owned).

Los Gatos Condos and Townhomes for Sale

Among the condo market, about 10% is short sales and none is a bank owned property.

Pending & Closed Sales of Homes in Los Gatos

The pendings show a lot more activity among short sales – but will they close escrow?  (Unfortunately a significant percentage of short sales never close.  Buyers get tired of waiting, banks request things that sellers won’t do, such as sign a promissory note, or foreclosure happens prior to the short sale being completed – just a few of the reasons why the success rate is lower than with either regular sales or REOs.)  Although about half of all homes in escrow are short sales, a look at the closeds over the last month belies that most won’t close – only about 3% of the combined closed sales in the last month are short sales. Fourteen percent are bank owned – still a small fraction of the combined market (12% are distressed properties).

Will the info (and percentages of sale type) be different if we view it “year to date”?It’s pretty similar in that the distressed homes in Los Gatos are a small pert of the market – among the single family homes sold in 2009 in Los Gatos, about 6% are short sales, 11% are bank owned homes (about 17% of the solds are “distressed” sales).  Interestingly, the amount of recently closed houses that are distressed is a lot less than the year-to-date. 

Among the condo and townhome market, year to date about 8% of the sales are short sales and about 5% are bank owned home sales (13% are distressed sales).  For the current month, it’s a similar 12%.

The distressed element of the Los Gatos real estate market is significant but a minor part of the available, pending, and sold properties in the Los Gatos area.  The lower prices of short sales and bank owned homes will have a negative effect on home valuations, but not nearly so strong as is seen in most of the San Jose area.  Depending on your price point and location, there may be more or less of an impact on your home’s value (or the value of the home you wish to buy). 

For more posts on short sales & bank owned homes in & near Los Gatos, please see:
http://www.realtown.com/LiveInLosGatos/blog/short-sales-and-bank-owned-homes

Can You Get a Cheap Home in Los Gatos by Finding a Bank Owned Property or Short Sale?

July 25, 2009

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 Saratoga, 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.