How’s the real estate market for the Belwood of Los Gatos, Belgatos and Surmont neighborhoods of Los Gatos? Today I present some detailed views of the state of the real estate market in 2012, viewed from several angles. This is a lengthy article, but one I hope my neighbors and would-be neighbors will find very helpful.
Inventory was low across all of Los Gatos and Silicon Valley, and turnover in this corner of east Los Gatos 9part of the 95032 zip code) is never high, so it’s not surprising to learn that a mere 13 houses sold over the last year. Most home owners would like to know whether values are rising or falling, how tough it is to sell a house, and whether or not homes are selling over the asking price. We’ll have a look at these questions, and more, using graphs I created from our local real estate multiple listings provider, MLSListings.com.
There were 13 closed sales in Belwood, Belgatos and Surmont plus 4 houses that did not sell in 2012
There were 13 sales of houses in 2013 – not too many for a neighborhood with more than 300 houses! There were four others which did not sell, however. One is currently for sale, and 3 more are cancelled, expired, or withdrawn. In every market, no matter how “hot”, some homes do not sell. This is important to remember. Too many home owners get euphoric about the sales prices and multiple offers which they hear about. What’s usually not considered is the “market rejection” that other properties get. It is a sobering balance to the multiple offer frenzy stories which one hears.
This first graph displays the closed numbers of sales by price point. This is helpful not just for sellers, but home buyers interested in purchasing here. Last week I got an email from a resident of Santa Clara County indicating a desire to see properties here with 2200 square feet or more available at under $1,000,000. Is that possible? Let’s see.
In the graph above, we find that three properties sold here between $800,000 and $1 million. We do not yet know from the data anything more about the houses, whether they were small, big, regular sales or distressed properties. A quick look at the MLS just now shows that all of the sold houses were regular sales except one, a short sale on Belwood Gateway which was in that lowest pricing tier (and which took about 2/3 of a year to sell).
Days on market or average days to sell in Belwood, Belgatos and Surmont area
Next, the average days to sell (meaning to have an accepted purchase offer or contract) for the houses on the market that did sell – not all of those offered in 2012 were purchased! (In every market, there are homes that do not sell. Most of the time it is because they are overpriced.)
From the time the house is showing on the MLS as active or available, how long until there was a ratified contract? In most cases, not long at all. For the lowest price group, the average days to sell is badly skewed by the short sale on Belwood Gateway – that one took 213 days to sell due to transactions falling through and the difficulties of getting a distressed property closed. When I eliminate the short sale from the mix, the average days on market for the other 12 properties was a very fast 17. The longest was 66 and the shortest was 2. The graph below shows the days on market of all sold houses by price point. Although it appears that the least expensive homes are the hardest to sell, that’s not really the case. The short sale tilts the average.
Average list prices of Surmont, Belgatos and Belwood homes that sold in 2012
What about home values and pricing? Below, please find the average list price of properties by month. For most of 2012, the majority of houses for sale ranged between one million and $1.4 million. There are higher and lower priced properties, of course, but this range gives home buyers a general sense of area values for typical homes. Newer one, view lots, extra large homes or custom built properties will cost more. Houses on Blossom Hill Road, older homes, properties needing extensive renovation etc. will sell for less. Have a look:
The Median List Price of Homes Sold
A tweak on the same type of data – the median list price (where half of all homes listed for more, half for less) as opposed to the average list price. Numbers are a little lower for this data set, but overall, pointing to about $900k to $1.35 mil or so.
Months of Inventory or Absorption Rate
The months of inventory helps us to understand supply and demand for the neighborhood. Generally speaking, 6 months of inventory is a “balanced market”. (Months of inventory is calculated based on properties for sale/available and those closing escrow. If no new inventory came on the market, and houses continued selling and closing at the same rate, how long would it take for all available inventory to sell off?)
Throughout all of 2012, the Belwood, Belgatos and Surmont areas were in the seller’s market territory, though in March 2012 it was approaching balanced as we had more houses for sale then, but a single month later, the pendulum swung the other way with one of the lowest months of inventory of the year!
Average Price per Square Foot
How much home can you get for your money? The price per square foot is one hint of value – but only one as some of the lot sizes are very large, may have views, etc., and some homes are highly renovated while others need a ton of work. Larger homes also sell for less on a per SF basis. So – disclaimers aside – a general sense of values is that most homes in our area run from a low of $400 per SF to a high of a little more than $500.
When I pulled these out individually, I found that the highest price per SF was the least expensive sale in the area, which was on Belglen for $840,000. That is a small house, a fixer, and sold for $587.41 per SF. Conversely, the least expensive “regular sale” house sold was the most expensive sale in the area, a house on Surmont on a 20,000 SF lot for $1,750,000 that sold at $408.02 per SF. (The second most expensive house sold was on Westhill Drive for $1,273,000 and $449.51 per SF.) The very least per square foot was the short sale on Belwood Gateway, which went for $384.27 per SF.
Median Sales Price per Pricing Tier
The median sales price for Surmont, Belgatos and Belwood is our next graph. Again, most are somewhere between about $900k and $1.3.
For the chart above, let me break it down by numbers of sales in each price group:
$1,750,000 – 1 sale
$1,200,000 – $1,300,000 – 5 sales
$1,100,000 – $1,200,000 – 3 sales
$1,000,000 to $1,100,000 – 1 sale
$900,000 to $1,000,000 – 1 sale
$800,000 to $900,000 – 2 sales (one of them a short sale, the other needed considerable work, a “fixer upper“)
Sales Price to List Price Ratio
How close are these properties selling to list price? Do many sell over list price and get multiple offers? Usually if the sales price to list price is over 100%, it’s a multiple offer situation. Let’s have a look at 2012 in terms of this ratio next.
The average list price in the neighborhood for the 13 closed sales was $1,149,303. The average sales price was $1,165,938. Most of the time, then, homes are selling for more! This is great for home owners generally. Not every home sold for more, but 7 of the 13 did. Here’s how it looks as spread out of the year, month to month.
In March there were longer months of inventory – but the best SP to LP ratio came in August. These probably are connected: scarcity tends to lure multiple offers and push prices up.
Now let’s look at the same ratio by price point rather than months of the year, because it is very different to sell a high end home than a more modest one here. The graph below proves this point exactly, though it should be remembered that there was only 1 very expensive home sold this year, so the data may not be as helpful as we’d like.
Generally speaking, home values are rising here and it’s a good time to sell overall. Although about 25% of listed homes did not sell (the usual culprit is overpricing, but there can be other issues too), most homes in our part of Los Gatos sold quickly (17 days for “regular sales) and over list price in a bit more than half of the cases. Obviously, getting multiple offers and overbids will greatly improve your sales price. My goal, when working with home sellers in Silicon Valley, is to obtain the best price and terms possible.
Want to sell your home in 2013? Please give me a call or email me and we can arrange a confidential, no obligation, no pressure consultation. We can further refine the relevant properties to establish your house’s probable market value or probable buyer’s value and discuss the most effective marketing and negotiation strategies to maximize your net from the sale.
Realtor, Sereno Group – top 5% real estate agent
DRE License # 01153805
Licensed & full time since February 1993
Belwood Resident since 1999
2011 voted “Best Real Estate Agent in Silicon Valley” by San Jose Mercury News in Reader Poll
mary (at) popehandy.com