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)!