The Los Gatos real estate market has fared better than many other parts of Silicon Valley in recent months, but prices are declining, days on the market area increasing and inventory is climing.
The median sales (sold) price of homes is down about 26% year over year in Los Gatos (95030 and 95032). List prices appear to be flat (see graph below, which is from Altos Research, a subscription I have) but in many price points, homes are being reduced multiple times prior to selling.
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The higher priced homes seem to be hurting more than the entry level homes. This is interesting because most of the “correction” we have been seeing is due to the mortgage mess, and a large portion of the very high end homes (more than 3 mil) are not terribly dependant on loans. Many of them are bought “all cash”.
What about our east Los Gatos enclave of Surmont, Belgatos and Belwood? We, too, have rising inventories. At the moment, there are six homes for sale in these three Los Gatos neighborhoods. I can comment a little on these and perhaps it will seem less gloomy when I do.
Two of the six are tenant occupied and difficult to see. They are not being actively marketed except on the MLS (no signs, no ads, no open houses – only the MLS and related web advertising). When homes are hard to see, they are hard to sell. One of them desperately needs a coat of paint and for someone to water the front yard, which has dead grass in it.
Another of the six homes is really large and at the high end of the scale for neighborhood pricing.
That leaves us with three other homes on the market. Every home has some kind of issue, and these three do too, but they are nice enough that they should procure an offer, even if not close to list price.
Having homes on the MLS that don’t sell tends to really hurt the ones that DO want to sell. Bad makes worse.
What next?
It’s hard to say. This morning at the Los Gatos – Saratoga Realtors board meeting, one lender said that it hasn’t been this bad since 1981. So it’s a challenging time for sure!
It’s a good time to buy, but buyers need to carefully handle their loan papers to avoid glitches. Selling is doable, but sellers must realize that it’s a price war and a beauty contest. Homes that aren’t in top condition and priced aggressively are going to have a tough time selling.
Please call me or email me if you would like a confidential meeting to discuss your real estate wants and needs. I’m happy to help!
Mary
PS Please see also my Live in Los Gatos blog – I do market updates about once a week there.
Mary Pope-Handy
408 204 7673
Mary@PopeHandy.com
