Lowest Priced Homes Remain the "Best Sellers" in Los Gatos

October 16, 2009

As readers of this blog know, Los Gatos is full of micro-markets, and that can make generalizations about how the “Los Gatos real estate market” is doing a bit skewed. So whatever you read online, or hear about in your neighborhood or from friends, do take with a grain of salt since your home may or not be similar to whatever other home you’re hearing about in terms of how it might sell (or if you’re a buyer, the home you may want to purchase may be different….).

Disclaimer aside, I did a few minutes of data-collecting on MLSListings just now for single family homes (houses or attached/duet homes, but not condos or townhomes) in the town of Los Gatos (not Monte Sereno, but LG with zip codes 95032 and 95030). It appears that the general trend continues: the most affordable Los Gatos homes, generally, are selling fairly well.

What I did was run the numbers (agents: using the “preview” button on REIL), then simply added two other criteria: high school district (Saratoga-Los Gatos High School District and Campbell Union High School District) and then list price of up to $1.5 million. Then I figured out the absorption rate, or the months of inventory (MOI). The solds are homes which have closed in the last month.

Where the MOI is greater than 6, it is a buyer’s market, and where it’s under 6 it is a seller’s market – six months is considered a “balanced” market.

So, looking at the first set, for Los Gatos overall the absorption rate is 5.6 months – or very close to a balanced market. But we know that some areas and price points are selling much slower than others. Surprisingly, when all of Los Gatos with “the schools” are considered, the MOI is 7.7. Given that it feels like entry level homes in that part of town feel like they’re flying off the market, this doesn’t sound right. So look at the second group of numbers, where the price range is limited to those under 1.5 million. We can see that there are only 39 such homes for sale now (vs 101 for all price points) and the MOI is a brisk 3.55. That makes sense. So what’s slower are the more expensive homes, generally. Entry level homes in the schools are selling at a healthy pace.

Interestingly, homes in the Campbell Union High School District are faring even better – and the data is inverted, slightly, as to where the sweeter spot of the market lies. For these homes, those under 1.5 mil are going at a quick 2.4 months of inventory. The market as a whole for Los Gatos houses for sale in this area is lower still, though – 2.23. That demonstrates that the market is even faster in the higher priced homes. My belief is that this is the case because those homes – high end homes in the CUHSD – have taken a bigger hit on pricing and buyers are responding. Cannot prove it in this brief blog post entry, though, but that’s my (hopefully educated) hunch.

What about your neighborhood, or where you’d like to buy? Get hyper local when you think about how “the market” is. Feel free to visit my Los Gatos Real Estate Report and see local sales in your neighborhood. Make it more precise by indating the beds/baths you want to consider, and how far out (in a radius) you’d like to see the comps, or how far back in time. Best part: you don’t have to register, you don’t have to leave a footprint. (Your search is not saved on my site, so I will not be showing up on your front porch!) Or call or email me for a confidential, no obligation, no-pressure consultation.

St Mary's Country Fair Is On! Oct 9 – 11, 2009

October 09, 2009

The St. Mary’s Country Fair in downtown Los Gatos is back through Sunday the 11th at 5pm. 

This year the fair is a little more kid-centric and there are more inflated play structures.  Things are not all where they were in the past, but the best of the best is all still there: great food, live entertainment, games, rides, and goods to purchase. (Jim and I just got back in from enjoying supper and a 2.5 hour stint overseeing the Obstacle Course – part playhouse, part inflated balloon attraction). 

Everyone’s welcome. The fair’s proceeds are split between the school and the parish, and helps to support outreach work in the community too. Please stop on by!  The fair can be accessed off of West Main Street and Lyndon Avenue or off of Bean Avenue near Tait.   There’s no entry fee!

Historic Homes Tour in Los Gatos, November 7 and 8, 2009

September 23, 2009

The highly appreciated Los Gatos Historic Homes Tour will be returning on November 7 – 8, 2009, 10am to 4pm each day.  Seven beautiful Los Gatos homes will be on display, with docents at each home to point out special aspects of the home.

Not only are the homes lovely to see, but it’s a fabulous way to get a taste of the history of Los Gatos.  I highly recommend this event, particularly to folks new to the town!

Tickets are $35 per person.  Learn more at www.MuseumsOfLosGatos.org. Proceeds go to support the towns two museums (one a history museum, the other an art museum).

Would you like to volunteer to help put it on? You can do that and enjoy a free pass to the homes on tour. 

http://www.museumsoflosgatos.org/HHT_Tour.html

Overview of the Condo and Townhome Market – Two Year Vantage

September 13, 2009

Let’s take a look at the real estate market for Los Gatos condos and townhomes from a very high vantage point: a two year overview. (Graphs created by me using Clarus Market Metrics, a subscription of my board and MLS.)

For the “really big picture”, let’s start with the “Supply & Demand by Month”, going from August 2007 to August 2009. Green represents demand, and red represents supply.

As you can see, there’s a big gap between available homes and how many are sought & purchased – so clearly this is a strong buyer’s market.

Now let’s turn to the absorption rate, or months supply of inventory. Below is the chart for all of “area 16”, which is Los Gatos/Monte Sereno (with a few homes in San Jose or Campbell along the border included – but by and large, it’s Los Gatos).

Los Gatos real estate: condo and townhome months of inventory Aug 07 to Aug 09

The condo and townhome market has improved tremendously since the doom and gloom of last Decemeber (then nearly 22 months, today less than 5).

As I’ve mentioned in other posts, the market can vary a lot depending on zip code, price point, and school district. This particular tool, the Clarus Market Metrics, does not use schools as a variable, unfortunately. But we can see what happens just with price point by breaking it down to home under and over $500,000.

Immediately below: absorption rate for Los Gatos homes priced UNDER $500,000 (condos & TH):

and next, months of inventory (absorption rate) of homes priced between $500,000 and $1,000,000:

Interestingly, the “sweet spot” of the Los Gatos condominium and townhome market is not in the least expensive condos and townhouses, but those between $500k and $1 mil. (I should add that there are some condominiums and townhouses priced over a million, but not a lot and the data gets squirrelly due to the low numbers so I am not using them in this post).

This is curious because the lowest priced homes are usually the “hottest”, but not here. Why? I only have theories, but my thinking is this:

  • the lowest priced condos are mostly either senior condos (along Alberto Way, the Los Gatos Commons) or very small units
  • if seniors are hoping to downsize to move to a smaller place, they are probably electing to wait so that their home values “recover” some
  • some people will elect to purchase a single family home in San Jose for $500,000, but perhaps others are buying a more expensive condo or townhouse to enjoy the benefit of the schools – so this would not be super tiny (more than 1 bedroom) since they are purchases for the schools

I may do more digging in the future to see what’s causing this trend, but this is my hunch. I welcome any comments from my readers on what they see happening with the condo market here in Los Gatos.

Invitation: Visit Our Facebook Page for Los Gatos Real Estate and Homes

September 04, 2009

Are you on Facebook?  If so, let’s connect! 

Recently I started a business page on Facebook for Los Gatos Real Estate & Homes. Inside there are a few easy-to-navigate tabs with realty market data, a quick way to search for listed homes, photos of Los Gatos and links to information about buying & selling homes as well as living in Los Gatos.

My personal profile is there too:  www.facebook.com/popehandy. Hope to see you there!  (And yes, I’m also on Twitter – find me at www.Twitter.com/MaryPopeHandy.)

Fires in Bonny Doon Remind Us to be Careful, Especially in the "Fire Season"

August 14, 2009

August brings very little rainfall to Los Gatos, Saratoga, and San Jose.  The long, dry days make our wooded hills and grassy meadows particularly vulnerable to fire.  A small spark from an untended burn or an electric motor – perhaps even clearing the brush to prevent fires – can have disastrous consequences.  The current fire just “over the hill” in Bonny Doon and close to Santa Cruz is a big reminder to us that we live with the risk of fire year-round, but especially at this time of year.

Los Gatos has an old history with fire disasters, both in town and in the nearby mountain communities.  I’m not referring to the Lexington fire of 1985 (which happened about three weeks before my wedding).  I’m referring to our collective “wild west” history.  A serious fire levelled part of downtown Los Gatos on July 26, 1891, destroying nine “buildings on both sides of East Main Street from the bridge to College Avenue”.  Again on October 13, 1901, a livery fire on Montebello Road destroyed ” much of the business district along West Main Street, from the bridge to the railroad tracks. Nearly 60 buildings burn to the ground.”   Among the casualties of that fire was the bell tower to alert the townspeople of fire!  (Both of these quotes from a timeline produced by the Los Gatos Times Weekly.)  See photos of the fires and the firefighters at the Santa Clara County Fire Department’s page on Los Gatos and the hiistory of fire fighting in our town.)

In January 1934, there was a fire at the Jesuit Novitiate.  The water supply was inadequate so the decision was made to pump out the wine to extinguish the fire. Some 60,000 gallons of newer wine was used – and saved 200,000 gallons of old wine (plus the vineyards, which would have taken years to be fruitful again if lost to fire).  This was a repeat of a similar event in the mountains in the late 1800s, when red wine used to battle the fire caused the Los Gatos Creek to run red.  We can only imagine how the townspeople felt when they saw the creek turn a plague-like red! 

But back to today (even though the history – and what’s above is only partial – of Los Gatos and fires is fascinating), we want to make sure that this type of history doesn’t repeat itself. Besides, you probably don’t have 60,000 gallons of wine to throw at a fire anyway.

What can you do to lower your risk of fire?

There are varying levels of risk.  If you have a large parcel of land with a lot of vegetation that dries out in summer, you’ll have much more risk than a homeowner with a green lawn and plants close to the home.  In all cases, clear any dead brush, vegetation, bushes, etc away from your home; the Cal Fire site suggests 100′  for riskier areas (which makes sense if you are in a rural area, but perhaps is not so feasible in a suburban or tract neighborhood). It’s better to cut weeds, grass and bushes back prior to 10am, when there’s more humidity (and less chance of a spark turning into a flame).  Do not stack firewood up against your home. Do not have open fires or untended fires, particularly if embers can get away. It goes without saying, of course, to be especially careful with cigarettes, fireworks, and other burning or smoldering items.  It’s not worth the risk to be careless.  Please see the Cal Fire site for more info for homeowners: http://www.fire.ca.gov/fire_prevention/fire_prevention_wildland_zones.php

If you are in a “very high fire danger area” – places next to large, open and wooded parks, homes on large parcels up against the hills – you should know if your home is in that zone – you’ll have extra responsibilities.  You will be required to have that clearance mentioned above, for instance.  You can find the zone maps and the regulations here, on the California Department of Forestry and Fire Prevention site.

Fires are risky for homeowners, pets, wildlife, and the men and women who risk it all to battle the blazes for us.  The cost is very high when a fire takes hold – when  a home goes down from fire, so much is lost that simply can never be replaced.  Nothing is worse than the loss of human life, though.  Many thanks to the firefighters who are out there waging war on the flames right now.  Let’s do our best to give them nothing to do.

Rising Prices in Los Gatos?

August 09, 2009

Are home prices rising in Los Gatos? It does appear that way. What is reported, though, may not be what it seems.

Below are the stats for the closed sales in July – they are still off, year over year, considerably, but they are up from the month before.

Los Gatos Single Family Home Statistics – Closed Sales

Trends At a Glance Jul 2009 Previous Month Year-over Year
Median Price $1,185,000 $1,080,000 (+9.7%) $1,347,500 (-12.1%)
Average Price $1,333,290 $1,082,350 (+23.2%) $1,492,650 (-10.7%)
No. of Sales 28 27 (+3.7%) 26 (+7.7%)
Pending Properties 23 40 (-42.5%) 23 (0.0%)
Active 168 157 (+7.0%) 164 (+2.4%)
Sale vs. List Price 96.0% 95.8% (+0.1%) 98.3% (-2.4%)
Days on Market 62 66 (-6.3%) 31 (+96.8%)

Los Gatos Condominium and Townhouse Statistics – Closed Sales

Trends At a Glance Jul 2009 Previous Month Year-over Year
Median Price $518,000 $635,000 (-18.4%) $668,000 (-22.5%)
Average Price $534,806 $615,000 (-13.0%) $605,600 (-11.7%)
No. of Sales 8 7 (+14.3%) 5 (+60.0%)
Pending Properties 12 9 (+33.3%) 5 (+140.0%)
Active 45 52 (-13.5%) 54 (-16.7%)
Sale vs. List Price 99.2% 95.4% (+4.1%) 95.3% (+4.2%)
Days on Market 86 112 (-23.7%) 44 (+94.9%)

What does it mean?

Clearly, while single family home sold prices are higher than a month ago, this is not the case for condos and townhomes (which have been “beat up” in this market, all over San Jose and also countywide). This is our first clue that “the Los Gatos Market” is again not one unified block, with everyone benefitting equally. Rather, there are micro-markets. Part of the market is advancing strongly – the lower priced homes in the Los Gatos School District – and those homes are selling and appreciating briskly. Other parts of the market, such as the townhouse and condominium market, the luxury market, and the homes not in the Los Gatos school area, are not faring as well. In fact, most homes in Los Gatos are not selling at all, and overall, it is still very much a buyer’s market, but it IS improving.

Below, please see a chart displaying the “market barometer” for Los Gatos. N the gap between the number of properties on the market (168) and those sold (28) – divide the former by the latter to get the “months of inventory”, which is 6 months right now. According to the National Association of Realtors, 6 months is a “balanced market” or a “neutral market”.

How can this be? How is it possible for it to be a neutral market (or in some segments of Los Gatos, a buyer’s market) when prices are rising (and homebuyers are experiencing multiple offers in places)?

It’s not happening in every segment of the Los Gatos market, that’s how. The homes that are selling are doing well. But many – most – remain unsold.

 

Broad sweep – here’s a view of inventory by Los Gatos zip code (95030 and 95032):

Real Estate Market Chart by Altos Research www.altosresearch.com

As you can see, inventory is rising among homes in the 95030 part of Los Gatos, but falling among 95032 (often more affordable).

Here’s the 95030 zip code area by price quartile:Real Estate Market Chart by Altos Research www.altosresearch.com

And here’s the 95032 part of Los Gatos by price quartile:Real Estate Market Chart by Altos Research www.altosresearch.com

Unfortunately, I cannot break out the school district differential with this subscription, but anecdotal information indicates that homes “in the schools” are the ones selling with multiple offers if they are priced low (close to or under $1 million). So I went to the MLS and checked a few numbers myself.

Right now in 95030 and 95032, there are 47 single family homes for sale in the Campbell Union High School District (meaning Leigh High & Westmont High), and 4 closed sales of the same in the last month. That is an 11.75 month supply of inventory.

Right now in 95030 and 95032 there are 159 single family homes for sale in the Los Gatos-Saratoga High School District, with 28 closed sales in the last month, which is a 5.67 month supply of inventory.

Price point aside
, the school district is the driving force.

List prices by zip code in Los Gatos:Real Estate Market Chart by Altos Research www.altosresearch.com

Prices are rising more in the 95032 part of Los Gatos than in the less-affordable 95030 part of town. Knowing what we do about the months of inventory, what we see are that the most affordable homes with the schools are the “hot” segment of the market.

What homes are these? The ones where a buyer can get into a single family home for close to a million dollars or less (up to about 1.3 mil max) and enjoy the Los Gatos Schools. Even so, houses must be “turnkey” and priced aggressively.

Homes outside of this parameter – which is most of the Los Gatos real estate market – are struggling.

Please contact me for help in buying or selling a home anywhere in Los Gatos.