April 01, 2008
Please have a look at my latest market update for the town of Los Gatos, broken down by zip, for this week. (Data from Altos Research, a subscription service I have. Disclaimer: they use list prices for their reports.) The following links are to pdf files for these reports.
March 25, 2008
We won’t have the March stats (or first quarter statistics) for the Los Gatos residential real estate market for another week or two, but I wanted to provide a snapshot of the realty market to keep you updated.
As of this morning, there were 149 single family homes available (as “status 1”) for sale in the Town of Los Gatos (zip codes 95030 and 95032). There were also 28 pending sales of single family homes (so an 18.7% ratio). As before, approximately one home in five is selling right now.
Breaking it down by price point (but all areas), in the under two million dollar range, there were 86 homes available and 20 pending sale – so a 23% ratio. Homes are selling better in the more moderate price ranges. Looking lower at the up to and under $1.3 million, there were 41 for sale and 8 pending (19.5%).
Looking at just the $1 to $2 million range, there are 25 for sale and 5 pending (20%) in the Campbell Union High School District, and 41 for sale and 13 pending in the Los Gatos-Saratoga Union High School District (30.2%).
The sweet spot in today’s Los Gatos real estate market, then, is the moderately priced house “in the schools”. Any home that is nicely improved, staged, marketed, and above all priced well can sell in today’s market, though – it’s all about positioning for the current market conditions.
December 07, 2007
The Condo and Townhome market in Los Gatos is a mixed bag. Values are holding and appear to even be rising slightly, the “days on market” are short (a mere 14 days in November), and the list price to sales price ratio is amazing at over 101%. But just as with single family homes, the number of sales is way down.
Is this seasonal or is it “the market”?
One way to check against a seasonal fluctuation is to look at all recent Novembers and see how this one compares. Let’s have a look:
As you can see, the 5 closings in November is the least number of sales over the last decade. Sales are way, way off. And, like with single family homes viewed the same way (see yesterday’s post), it’s about half of what’s average.
If we look at the months of inventory, or the absorption rate, does it look any better?
The condo market remains under 6 months of inventory, which is the point at which the National Association of Realtors would say it moves from being a sellers’ market to a buyers’ market. These numbers are much better than those for the single family home market in Los Gatos (which had 8.79 months of inventory for November – and those numbers appear to be rising steadily, wheras these numbers are up and down so they appear less predictable).
As of today, there are 5 pending condos or townhouses in Los Gatos (zip codes 95030 and 95032) and a total inventory of 26 available townhomes or condominiums in town. So approximately 20% of the homes on the market are selling. Those that do sell, sell fast and apparently for a great ratio.
But that leaves 80% of the homes that aren’t selling at all. So all the good news about “fast days on market” and “great list price to sales price” is not very heartwarming to that 80% whose homes don’t seem to want to sell.
In a market like this one, buyers are passing up homes (whether houses or lofts or anything else) with “issues” like busy roads, deferred updating, and of course especially overpriced homes. The property which is fixed up, in a superior location and priced aggressively – the gem, the deal – is selling fast.
This is not a market to see if you can get a price. It’s a market for people serious about putting a home in top condition on the market, and pricing it to attract a buyer who’s frankly looking for a good deal. Your home needs to be that good deal to sell right now.
Will it be better in the spring? Possibly. The market is really not bad now. There are always overpriced homes in less than ideal locations and with less than perfect condition that don’t sell because the price isn’t low enough to compensate for the problems. So don’t let the failure of some properties worry you about yours. Just get it in the right shape and price it for what today’s market will bear (not what you want it to be worth, not what you need, not what someone else told you it is worth).
If you are buying another home after selling the condo or townhome, you are in luck. The market gets softer as you move up the ranks, and there’s a good chance you will make up for any felt loss on the next purchase. But hurry. No one knows whether it will suddenly become a different kind of market in the new year!
Call me if you’d like to chat about your real estate needs. I’m around and working through the holidays with just a couple of days off near Christmas – and I have time to visit with you and strategize to help you get the best deal when selling your home.
Wishing you and yours a very Happy Hanukkah, a Merry Christmas, and a Happy New Year (and anything else you might be celebrating in these days)!
December 06, 2007
For the MOST CURRENT Los Gatos real estate market information, please click on the header above to visit the most recent posts. Each week there will be an update to the housing market in Los Gatos, so return often!
The real estate market for single family homes in Los Gatos is moving more into a buyers’ market. Values may be slipping some, but the big story is the fact that so few homes are selling and closing. Whether you compare November 2007 against other recent months or against other Novembers in the last ten years, sales are clearly, and dramatically, way off.
Let’s take the number of closed sales from November for the last 10 years, then we’ll look at the absorption rate, or “months of inventory” for Los Gatos in recent months.
As is apparent in the graph, closings are at an all-time low for November over the last decade, and in fact is about half of average. This movement is not exclusive to Los Gatos but is being seen all over Silicon Valley; this is the reason there are so many layoffs among lenders, title companies, and real estate offices (in support staff, not commissioned sales people). So even “seasonally”, this is unusual.
Next, let’s look at the “months of inventory”, meaning how long it would take to sell off the current inventory (how many months) if nothing new came on the market and homes continued to sell off at the rate of the closeds for the month. Here, too, the figures show a deepening buyers’ market. (Under 6 months is considered a sellers’ market by the National Association of Realtors, over 6 months a buyers’ market.)
Again, the month to month view is a clear reflection of the slowing market and the reality that fewer homes are selling. The larger the number of months, the harder it is to sell.
Some experts predict that things will calm down in 2008 and we’ll have a flat or normal market, or very slight appreciation at best. Other experts predict a worsening real estate market.
Silicon Valley often marches to the beat of its own drummer. Since we have geographical constraints (two sets of mountains and a bay), a good economy and a housing shortage, I believe things will go fairly flat for most of the valley in the next year or two.
It always comes down to supply and demand. Right now there’s plenty of supply in Los Gatos (about 108 homes). In neighboring Saratoga, though, there are fewer than 75 homes available – so the absorption rate there looks very different. If, in the new year, there are a lot of homes on the market, it will put downward pressure on pricing and homes will sell for less than they’re selling today. If inventory tightens up, that won’t happen.
Tomorrow: the real estate market for condos and townhomes in Los Gatos.
September 08, 2007
In contrast to much of Silicon Valley, the Los Gatos market is continuing to experience appreciation and is a fairly “balanced” market overall.
I. Single Family Homes
Compared to last year, August’s closed sales of single family homes were smaller in number (off 6.5%) but up in price (median up 35.9%, average up 23.7%). Inventory is far lower than last year too – listings were down 26.4% from last year. The lower inventory is helping to keep this market balanced, as opposed to the buyers’ market it is elsewhere.
Compared to last month, August’s closed sales of houses in Los Gatos were down 6.5%, listings were up 6.2%, and prices were up noticeably (4.8% for the median and 7.2% for the average).
II. Condos and Townhomes
The condo market is somewhat similar in The Cats, with the numbers of listings and sales falling, inventory shrinking, and prices rising.
Compared to last year, the closed sales were down by a whopping 66.7%, listings were down by 23.5%, and prices were up strongly (28.2% median, 15% average). Normally, sales do fall off in August, so we expect to see a month to-month drop, but to see a drop from one August to the next is very noteworthy.
Compared to last month, sales of townhomes and condominiums were down 69.2% and listings were up 18.2%. Prices skyrocked though, up 45.7% for the median and 30.1% for the average.
III. Give me the Cliff Notes Version
For both single family homes, townhouses and condos, this summer has been a whole lot better a time in which to sell than the year before. Inventory is down, prices are up. Sales are down tremendously, but fewer homeowners are trying to sell now than a year ago. If you could not sell your home last year, try again – things are much improved! Just make sure your price is realistic and the condition is top-notch.
Often the Los Gatos market follows a fairly predictable pattern for inventory, sales and appreciation: in January there are more buyers than sellers, and prices get pushed up. This inequality of supply and demand tends to remain (most years) through late spring or into summer as inventory rises.
Some years the balancing point is in May, others in July – it varies. By summer, though, usually there are more listings than buyers and prices quit rising. In the second half of the year, prices may be stable, they may drop slightly, or they may do some dropping in August and rising again between Labor Day and Halloween, when we get a second burst of folks who want to get in before the year ends. Often inventory shrinks in winter and again in late summer. In the first graph above, you can see that pattern roughly played out.
Where are we now? It is early September and if the market follows what is typical (which is what we are seeing now), we will have a very healthy market this month and next. For buyers, there’s usually more selection as houses come on the market. For sellers, there’s a renewed interest among buyers and well-priced, well-staged, and well-marketed real estate sells well. Now is a good time to both sell and to buy in Los Gatos.
If you would like more information on the market (both condos and single family homes in Los Gatos, Saratoga, San Jose and around Silicon Valley), please see my online Silicon Valley real estate market report. Or call me at 408 204-7673 for a private and confidential consultation.
June 14, 2007
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.