Los Gatos is the “gateway to the Pacific” from Silicon Valley – and vice versa. Snuggled into the base of the Los Gatos Mountains, this scenic area offers a charming downtown, architecturally interesting homes and commercial areas, a beautiful natural setting and great public and private schools to boot. Housing costs are high here, so many wanting to make the town their home may investigate buying a townhouse or townhome rather than a single family home.
What does it cost to buy a Los Gatos townhouse?
Housing prices for townhomes varies with the school district, walkability, and proximity to downtown or other features such as having a view. And, of course, the size of home, number of beds and baths, the outside space, and its condition will all impact the home prices.
Most of the townhouses are 2 or 3 bedrooms. There are some 4 bedroom homes and once in a blue moon, you may stumble upon a 1 bedroom.
On the low end, it may be possible to purchase a small Los Gatos townhouse for about $500,000 for a 1 bedroom, if you can find it. At the high end, they can soar past $2 million. For the 48 townhomes in sold in the last 180 days, anywhere in Los Gatos 95030 or Los Gatos 95032, here are the average numbers (list price, sale price, square footage, days on market, HOA fee, price per square foot) all together, for the Campbell Union High School District area of town and for the Los Gatos-Saratoga Joint Union High School District part of town:
What I found most surprising is that buying a townhouse “in the schools” is not so much more expensive than one with Campbell or Union Schools.
What are typical HOA dues for townhomes in Los Gatos?
The Home Owner Association or HOA dues are often a shock to home buyers. As you see in the chart above, an average HOA fee paid for the homes sold in the last 6 months was $530. But they are not all so expensive – or so inexpensive.
A couple of weeks ago, my family and I were up at the old Jesuit Novitiate, Sacred Heart Jesuit Center, visiting my uncle, and saw the demolition of the nearby Holy Names Sisters old convent as we left.
The sisters’ property is where the wonderful Casa Maria Montessori School stood and has been near and dear to our now grown kids and to us. It was a very loving environment and the expansive grounds provided a myriad of exploration opportunities for the youngsters.
Additionally, though, of course we ar eall very sympathetic to the nuns need to sell the land to support the elderly members of their community. Sadly for them, the elderly sisters had to be moved not entirely together, but with one group going to one location and another going elsewhere. (I would love to see a larger Catholic retirement home in the San Jose area that could accommodate them and others, and have blogged about that elsewhere. Such a place would have provided an alternative that could have kept the sisters together. Mercy Care & Retirement Center in Oakland is such a place….)
While the houses will be beautiful, no doubt, and perhaps I will be fortunate enough to sell one or more of them, even so, it’s hard to see the convent and grounds get torn up. Here are a few photos that my husband, Jim, took from that day.
How far does your money go in Los Gatos, whether 95030 or 95032, and how does that compare to our nearby neighbors of Saratoga, Almaden, Cambrian, Campbell, Cupertino or San Jose, generally? Today I am snagging a chart from my Altos Research Reports which give a good sense of what a million dollars (or other amounts) can get for you in these areas. These charts use LIST PRICES, and remember, the sales prices are often different (frequently more!). Let’s have a look.
Los Gatos 95030
This is the more central part of town, the area closest to downtown Los Gatos and most of it is “in the schools”. Here a million dollars is unlikely to get you a house at all, though it could be something small that needs a lot of work if not in the downtown area…maybe….
Los Gatos 95032
Conversely, although about 1/3 of this area is in the Los Gatos Union School District, most of it is not, and this area is usually (though not always) further out so less expensive for both reasons. Interestingly, the high end prices aren’t so far apart between 95030 and 95032 from this vantage, but the gap widens a lot at the bottom quartile. In 95032 a million will get you a small house, most likely in east Los Gatos (west is a little more expensive, usually) – and it will probably need work. Something to note is that all of the elementary and middle schools in Los Gatos, no matter which school district, are high scoring, high performing institutions. The scores do change at the high school level pretty noticeably. But the improving schools in the further out areas of LG, especially in east Los Gatos, is causing the pricing gap to shrink somewhat.
So in Los Gatos, $1 million is unlikely to get you a house, though it may if it is small and not too close in to downtown (or if you are buying land value).
The San Jose Mercury News reports that a group home for developmentally disabled adults is coming to Los Gatos. Since Agnews Developmental Center in Santa Clara is closing, those residents must all be placed elsewhere. Five of them will be housed in Los Gatos in a home being built on Mulberry Drive (which is off Wedgewood Dr, between Lora Drive and La Rinconada Drive) near the golf course.
For neighbors, this is a concern due to lack of parking already; the five residents plus caregivers and visitors will make the area more congested still.
In early October, we’ll get a great breakdown of the September market from various sources. Retrospect is always 20/20, they say.
But I’m impatient and want to know NOW what’s happening. I’m seeing a slowdown in market areas that were previously fairly robust.
One way of getting a pulse on the market is to check the amount of homes going under contract. So I did a quick sampling of condos, townhomes, and single family homes that sold (not closed, but went pending) in recent weeks. Here’s what I found:
Aug 30 – Sept 6 (Labor Day timeperiod) – 6 sales (starting inventory of 128) Sept 7 -13 17 sales (starting inventory of 120) Sept 14 – 20 16 sales (starting inventory of 115) Sept 21- 27 12 sales (starting inventory of 125)
Inventory has stayed fairly consistent (bouncing around just a little) but sales have been dropping in the last three weeks. So yes, the market in Los Gatos is cooling overall.
A neat place to see graphs and charts on the housing climate is Altos Research. There’s a widget on the right margin of this blog and if you click on it, it will bring you to their website and give more data on the real estate market.
And in a week or so I’ll have more data still on our changing housing market here in Los Gatos.
The Los Gatos single family real estate market appears to be split, with some price ranges faring far better than others, but overall, it is clearly a buyer’s market. For the homes that do sell, prices are appreciating somewhat.
Since June 1st, there have been just 9 closings among single family homes. Of these, the average “days on market” was a brisk 15, with one house selling after 55 days on the market and another after 33 days – both of these, however, sold for significantly less than asking price, while homes that sold fast generally sold at list price or higher than list price. None of the closeds were under $1 million or over $1.6 million (average sales price was $1,376,865).
There have been 13 pending sales since June 1st (compared to an inventory of available single family homes in this same are of 101). Not one of the most recent sales is under $1 million and not one of the recent sales is over $2 million (there are not so many available under $1 million, wheras there are lots available over $2 million).
If we consider ALL pending sales, there are 20 to view and the range of all pending sales prices (not just sold in the last 2 weeks) is a little wider than with the closeds: 2 were just a hair under $1 million, one was a low $729,000 (for an “attached” single family home) (so 3 under a million, compared to 10 available) and four ranged from $2 million to $2.5 million (compared to 53 available). Most recently pending sales are priced solidly between $1 and $2 million.
So what are a seller’s odds of selling? Right now, for all homes priced under $2 million, about one in three. For homes more than $2 million, it’s about 16% (there are 9 pendings – not just since June 1st but generally – and 53 available properties in that range). You are most likely to sell if your home is the middle range between 1 and 2 million and if your property has Los Gatos Schools with no adverse conditions (high voltage power lines, freeway too close, etc.).
Sales are down 15 – 20% from a year ago, and sales then were down significantly from the year before that. Prices have been rising modestly but that doesn’t help a seller if the home doesn’t sell! Inventory is continuing to rise and appears that we are going into a deeper buyer’s market at this time. The market does ordinarily begin to soften around this time each year, so seasonally this is not out of the ordinary. But the number of sales and the narrow range within which they are selling is key. (And this quick view did not even consider school districts or other issues that can impact value.)
Sellers: This is not a market to see if you can “get your price”. You will be wasting your time. This is not a market for homes that are dirty, difficult to view, poorly staged, needing work, or overpriced. The real estate market is unsympathetic to what a seller wants to get out of the house (just like the stock market), and the market is the one thing that neither the agent, nor the seller, can control. If it is important to you to sell now, then you need to put your best foot forward on all fronts, from staging to marketing to accessibility to pricing – most of all pricing. (Most homes that do not sell fail to do so because they are overpriced.)
Buyers: If you are in the market for a luxury property, now is the time to move on it, particularly if you are an all-cash buyer. Another good angle for you is to find a property that needs updating and/or has been sitting on the market awhile, since the longer the days on market, the more likely you are to get a good price. However, the seller has to be motivated for that to happen – and in every market, there are sellers who will only sell if they get their price. Don’t assume that you can get a bargain just because the DOM is long. (But hey, it’s worth a try.) Understand that if you buy in the most desireable areas and with the best schools, and if the home is priced well and beautifully updated, you could pay $50,000 over list price to get that “shiney penny”.
For advice specific to your area, please contact me.
When is the best time to sell a home in Los Gatos, or Silicon Valley generally?
Many people think it’s spring, others summer. But is there a best time?
The answer is: it depends. . . and it varies.
Usually there’s a runup in real estate pricing from January to some point later in the year. Then it levels off. Sometimes it even declines a little. Sometimes not. Once in awhile, there’s a second runup in the real estate market too. A couple of years ago, August saw a 2% increase in pricing (other years, we’ve seen a decrease in pricing then). It’s actually hard to predict. But normally, things heat up in January, February, and March. That part is usually fairly predictable.
Some years, the “peak” of the pricing for the year is early (March, or close to it). Other years, it’s later – sometimes as late as July.
Last year, the realty market began declining in March and that “correction” continued until September. Then home prices leveled off and skated along, pretty much holding value, until January. Then they took off like a rocket again in the higher priced homes of Silicon Valley. Not so for places on the east side, really.
Other years, we’ve seen the market stall out because of something like an earthquake (October 1989) or a terrorist attack (September 2001), These things cannot be predicted but they do impact the market.
Besides pricing, another consideration is the cost of money. That is, what are interest rates doing? Remember that you don’t really “get” a loan, you “buy” one.You are purchasing a loan product. It’s a supply and demand issue. So when the demand is high, generally interest rates will be higher as compared to when the demand is low. Demand for loan products tends to be at a low point in the dead of winter. Interest rates often start ratcheting up close to Valentine’s Day (mid-February).
There are not a lot of easy answers. Selling your Silicon Valley house in the dead of winter can be very advantageous because interest rates are low, there’s not much inventory, and the “absorption rate” (the rate at which inventory is “absorbed” by the market) is often better than it is in summer.
Another consideration is what you’re planning to do once you sell your house or condo: cash out or buy another home. For move up buyers who are not picky but really want “a good deal”, it may be best to sell first in spring or early summer and buy later, in late summer for instance, when the market may soften. For pickier buyers, it may be good to sell their property early in the year (or more in winter) and buy later (more in spring) because the rise in inventory will provide more choices – though usually at a steeper price.
No matter when you want to sell your home, there are some key things to keep in mind, including realistic, strategic pricing (overpricing is the number one reason why homes won’t sell), good staging (knowing which improvements to make, decluttering, keeping the home clean), and good marketing (make sure it’s on the web and in all the right places!) are all key. It is also very, very important to hire well. A poor agent can make or break your home sale from the start. A good agent will assist you – if you let him or her and follow the advice given – to maximize your place in the market.
A couple of years ago, I co-authored a book, “Get The Best Deal When Selling Your Home In Silicon Valley“. The book covers a myriad of topics from how to choose your local agent to pricing and what to expect in escrow and how to do a move-up sale/purchase. The book is available at local public libraries (Los Gatos and San Jose), at Border’s Books, at nearby Barnes and Noble, and via Amazon.com. Or you can ask me to view your home and talk about your plans or thoughts on selling and I’ll bring you a copy when I visit. But in any event, I do suggest you read this book (no matter whom you hire to help you sell it) so that you go into the home selling process the wiser.
Your best timing depends on a number of things, but most of all, it depends on your particular circumstances. Beware the idea that there is “one right” month to go on the market. It just isn’t so. In my practice, I have seen countless people try to time the market right, but fail to stage or price the home correctly – and so despite the timing issue, it doesn’t sell. And conversely, I’ve seen others work hard to stage and price a home correctly and seen it sell under the most adverse of conditions.
Timing matters. But contrary to popular belief, timing isn’t everything. It’s only one part of the puzzle.
If you do it right, you can be successful at selling your Los Gatos home at any time in the year.