Today I pulled the sales info for our corner of east Los Gatos and thought you’d like to see how the year shook out for the real estate market here. There were 21 closed sales of single family homes in 2018.
The first sale listed above with a closing the first week in January of course went under contract in 2017.
There is also one pending sale which is scheduled to close escrow later this month, but went pending in 2018.
Additionally, there were 3 properties which went on the market but did not sell – they were canceled, expired, and / or withdrawn.
What are the odds of selling success?
The odds were pretty good for home sellers here in 2018: of 24 properties listed in 2018 (not the first sold, but including the pending, 21 total), 88% did sell. This includes the large estate style homes and properties with views as well as fixers and houses on busier roads.
Why is it that not every home sells in a strong seller’s market? Each case is different, of course, just as every seller and his or her property is unique. There are a few usual culprits, though, most often being price, but other challenges can be present as well. You can learn more about why some houses get listed but do not sell on my Valley of Heart’s Delight blog: https://sanjoserealestatelosgatoshomes.com/why-didnt-my-san-jose-home-sell/
What do we expect for the 2019 real estate market?
It’s all about supply and demand. Right now, demand is decent and supply is low. Here’s a look at the inventory of single family homes for sale in recent years by month, first in town and then for the county.
Inventory of single family homes for sale in Los Gatos 95030 & 95032 from Jan 2012 – Jan 2019:
In town (not including the Los Gatos mountains area), Los Gatos has extremely low inventory. I ran the numbers and this is lower than any other January since 2002, the longest back that the MLS will let me go. Locally, that bodes well for those looking to sell in Los Gatos. (Currently there are NO homes for sale in the Belwood, Belgatos, Surmont, or nearby areas of LG.)
What about the broader area? Most of the county has looser inventory than we do in LG. Have a look:
Inventory of single family homes for sale in Santa Clara County Jan 2012 – Jan 2019:
I think it is really important to view this month’s inventory for the county not just in relation to January 2018 (“inventory is up 8% from last year, oh no!”) but in the context of all the recent years since we’ve been in recovery from the Great Recession. Yes, inventory IS up from last year for Santa Clara County, when the first 6 months of 2018 saw prices shooting up like a geyser due to highly restricted inventory and ongoing demand. Most of 2017 and early 2018 were off-the-charts into overdrive. From early 2012 through 2016, we had a market that was appreciating at a good pace – too fast for some buyers, who opted to become permanent renters rather than to participate. Current inventory levels are very low relative to 2012 and later.
A return of some of the normal patterns?
Inventory tends to rise throughout the first half of the year, so I am expecting that to happen again in 2019. To the left, see a chart displaying the inventory of homes for sale in Los Gatos 95030 & 95032 from Jan 2016 to today. This is a pattern we usually see – though of course, it’s not a rule, and it can change.
Prices also tend to rise in the early part of the new year as inventory does not keep pace with demand, and I see no reason why that would not happen again.
Equally important is to understand that in the 2nd half of any given year, prices often soften. Home sellers sometimes believe that “summer is the right time to sell”, so get their homes on the market then. But activity from buyers slackens after the spring buying season, so in many years, inventory is higher than demand – so prices level off or even decline.
In 2018, prices in LG and the county did decline dramatically from the spring peaks, perhaps in the 12-15% range, generally.
Economists tell us that they expect the first half of 2019 to be decent to good, but not as wild a ride as early 2018. (Milder appreciation, 3-5%?) Some believe that the second half of 2019 will be much softer. A real estate correction is expected sometime between now and 2-3 years from now. We do believe that locally, in Silicon Valley, we are at or near the top of this real estate cycle. For those wishing to sell and move out of the area, 2019 could be a good year in which to do that. It’s impossible to pinpoint the exact top or bottom of the market, though. That is something we only know when it’s passed, just like with the stock market.
The Belwood of Los Gatos, Belgatos, Surmont, and contiguous neighborhoods in east Los Gatos saw strong appreciation in 2017. With a low amount of available real estate inventory and high buyer demand, properties listed under $2 million often saw multiple offers and good overbids. Over $2 million, the market was cooler, but still not too challenging to sell if done right.
Early 2017 was a bit sluggish, with homes taking longer to sell and recording under list price through February. These homes were priced on the higher end for homes in the area, and they were selling during the typically cooler winter months, both of which might have contributed to the slower turnover. By March the market was heating up again with the large majority selling above list price (likely multiple offers) in under a month through to the end of the year. The three that took longest to sell (from March through November) also sold below list price.
Below is the chart of all home sales in the Belwood & adjoining area listed on the multiple listing service for 2017 organised by date descending oldest to newest. DOM stands for “days on the market”. (There was one off-market or private sale of a 1400 SF house on Bacigalupi for $1,250,000 that is not included. It appears to have been a fixer upper.)
Most challenging to sell are the luxury tier properties offered at $3 million or more. In 2017, the house with the longest days on market was in this category. This is normal for the luxury market in east Los Gatos.
In summary, through most of the year there was high demand and quick turnover for homes in the Belwood area in moderate price points. These fast moving homes provide approximately 3-5 bedrooms and list in the price range of %1.5 to $2 million.
If we remove the luxury tier home, a profile of homes sold in this area in 2017 would be along these lines:
Average list price: $1,719,144
Average sale price: $1,758.263
Average square footage: 2316 SF of living space
Average age of home: 42 years
The last couple of months in 2017, prices began shooting up with the news of Google’s expansion into downtown San Jose. The ripples were felt through Willow Glen, Cambrian, and into Los Gatos. What sold for $1,750,000 in the middle of 2017 is likely to sell for significantly more in 2018.
If you’re interested in buying or selling a home in this beautiful corner of Los Gatos, please reach out to me and we can have a confidential and no-obligation conversation / consultation.
Of the homes first listed for sale in the Belwood of Los Gatos, Belgatos, or Surmont subdivisions in 2015 so far, only one did not selll (it was pulled off after a month, which is about the time when a price reduction would likely be getting discussed). One other is currently under contract (contingencies are in place) and five homes have been sold and closed.
Overall, houses in this neighborhood have gone pending fairly quickly, with the average days on market being a brisk 9 for the five closed sales. Homes sold so far are all selling over list price, and the average amount over is about 3% ($38,000).
(There was one other closing on Bacigalupi in January from a sale in December that I did not include since I was looking for sales that were ratified in 2015, but that home had 2448 SF and closed at $1,525,000 fyi.)
The odds are good that you could sell a home in this area without too much trouble in most cases. In every market, though, there are some homes that don’t sell or do not sell quickly. To learn more about that situation, please visit my Valley of Heart’s Delight blog and read this article:
Today I’m working on an article for another blog of mine on the topic of saving for a down payment and residential real estate appreciation in Silicon Valley. Long story short, right now, home buyers cannot save as fast as the home prices are going up. For some, the saving effort is to get to 20% down or more. For others, the goal is to buy all cash. In both cases, though, the danger is getting priced out of the market while the would-be home owner is putting away money. For people who wanted to buy 2 years ago but decided to wait and save, that now means either not buying at all or buying in less nice home or area than they were targeting.
This is certainly true for home buyers wanting to get into Belwood of Los Gatos and nearby. Let’s look at our corner of Los Gatos and take a sampling of what has happened since 2000 (a “boom year”) for a typical 2400 square foot house on a typical 9,000 to appx 10,000 square foot lot (in Belwood, Belgatos or Surmont). For this, we will consider homes sold in 2000 and homes sold within the last 12 months. I ran the numbers this afternoon on MLS Listings, our local multiple listing service provider.
1-1-2000 through 12-31-2000: a home of about 2400 SF on a 9,000 – 10,000 SF lot averaged a sale price of $860,000 (prices ranging from a low of $750,000 to a high of $950,000). A 25% down payment would have been $215,000 and the loan amount would have been $645,000, using that average number. Many buyers would have purchased with 20% down, and some with 30% or more, though.
Fast forward to today and the last 12 months leading up to today – approximately 15 years later.
6-9-2014 through 6-9-2015: same sized home and lot averaged a sale price of $1,512,000 (prices ranging from a low of $1,350,000 to a high of $1,660,000). This does not include pending sales, of course – just those which have closed escrow.
Home prices have almost doubled in that time. Continue reading
This afternoon I ran the recent listings and sales in the Belwood of Los Gatos, Belgatos, Surmont and nearby areas. These contiguous east Los Gatos neighborhoods have extremely low turnover, so not surprisingly, there are few sales!!
It should be noted that larger homes on larger lots usually sell for far less on a price per square foot basis – so it’s not really fair to compare a house on an acre with one sitting on a 10,000 sf lot. Additionally, homes in the $2 million plus range are a very different creature than those closer to $1 million in terms of multiple offers and the sale price to list price ratio. In some cases, though, even these higher end homes get multiple offers and sell for more than the asking price.
Finally, the type in the image below is a little small, but if you click on it, you will get a larger, more readable version.
Real estate sales this year in the east Los Gatos areas including Surmont, Belgatos, Belwood of Los Gatos and homes close to Harwood but within the Los Gatos town boundaries have been small in number due to the extraordinarily tight inventory levels. Below are the closed and pending sales as reported in the MLS for this calendar year so far.
Of the nine closed sales, 5 sold for more than list price – most or all of these were multiple offer situations. The other four had a variety of situations: one was bank owned, one needed several hundred thousand in finishing work (there was no kitchen, there were no bathrooms, etc.). The one on Alerche sold “off market” and “off mls”.
Interested in buying or selling a home in or near this pretty corner of Los Gatos? Please give me a call or send me an email today!
Sometimes the search engines cause more harm than good when they begin to label Los Gatos neighborhoods for us. In the case of Surmont, as well as Heritage Grove, Belwood and Belgatos, that is certainly the case.
Bing has published a map with the wrong answers. So let’s set it right for the good people trying to figure out what is where. This mislabeled map puts Surmont across both where it does belong and neighboring Heritage Grove. It has Heritage Grove north of Strathmore neighborhood (which is correctly placed). Belwood and Belgatos seem to be either one and the same or north/south of each other.
Of 5 named neighborhoods, one of them is correct.
So let’s set the record straight.
Where is the Surmont neighborhood of Los Gatos?
Surmont starts with Westhill Drive and runs through approximately halfway between Old Orchard and Belblossom. These homes are a little older than those in Belwood and Belgatos. Many of them are custom or semi-custom, and a few have large lots with views. The streets include Westhill Drive, Surmont Drive, Surmont Court, Old Orchard Drive and Campos Verde.
Where is the Belgatos neighborhood of Los Gatos?
Belgatos begins with the end of the Surmont subdivision and continues up to Belgatos Road. Like Surmont, some of the homes along Westhill have bigger lots and views. These seem to be custom homes built to take advantage of valley vistas. Other houses down on the flatter area look to be semi custom in many cases. Streets found here are part of Westhill, part of Belblossom, part of Belvue, and part of Belgatos.
Where is the Belwood neighborhood of Los Gatos?
Belwood of Los Gatos runs approximately between Belgatos Road and Harwood. Some of this area was added about 10 years later (part of Bacigalupi Drive and Jamie Court behind it) and they are not part of the original Belwood subdivision. This area has optional dues and may use the pool if paying that year. The rest of Belwood pays lower dues but it’s not option. The newer stretch also has smaller lots, mostly about 8,000 SF lots instead of 10,000 SF lots. Please see the HOA’s website, BelwoodHomes.org, to get more precise boundary information for Belwood and the pool. Westhill continues into this area, though the homes appear more semi custom than Belwood generally. Most of the streets begin with “Bel” as in Belridge, Belcrest, Belglen, Belwood Gateway.
Where is the Heritage Grove neighborhood of Los Gatos?
Heritage Grove is a newer (for Los Gatos) subdivision just off of Blossom Hill Road. The roads there are Regent Drive, Heintz Court, Ayala Court and Ramohs Way. If you’d like more information on this younger, upscale subdivision, please read the following article in my Valley of Hearts Delight blog, which includes a slideshow and a bit of local history:
The Heritage Grove Neighborhood in Los Gatos and the Heintz Open Space Preserve
If you enjoy this blog and would like more information on Los Gatos or the San Jose and Silicon Valley areas generally, please have a look at my other blogs:
Update on the Nextdoor.com private intranet for neighbors in the Surmont-Belgatos-Belwood and beyond areas – We launched our site November 17th, 2011, and 2 months later, got up to 39 people (in 32 households). As of Nov 17, 2013, our 2 year anniversary, it was 317 members in 245 homes (see image at right). We are still growing and now have a roster of 321 neighbors (248 of 567 households) or 44% of households participating. Thank you to all who’ve been active in sharing news and inviting neighbors to join us!
For those who aren’t onboard and are wondering, what is Nextdoor all about?
This is a private, online social network site for neighbors sharing with neighbors things that matter to them. Often this includes issues and concerns that otherwise we wouldn’t know about, whether a problem (break ins, solicitors), a need (babysitters, gardeners, house cleaners), an alert (coyotes spotted, skunk problems) event or other positive happenings.
Many times, this is almost like a virtual “neighborhood watch”.
I do know that people worry about their information being public. The system requires members to be verified, either by mail (free) or by phone (which requires a one cent charge to a credit card). This is done to insure that everyone in this private site is actually a neighbor – for everyone’s protection. Also, you don’t have to share your email address or phone number, but of course you can if you choose.
On the fence? Log in, have a look and see what you think. There’s a lot to like about it!
Please check it out:
And for current members, PLEASE INVITE YOUR NEIGHBORS! You can do this for free by sending postcards! Just click on the “invite” button on the top right side. The system will allow you to mail a few cards each month at no cost.
Finally, if you are not within these boundaries but are interested in Nextdoor for your area, just go to Nextdoor.com and input your address. You’ll find out right away if you are within an established neighborhood. If so, join! If not, perhaps you can begin one there yourself. It’s a great way to keep in touch.
Houses in the Belwood, Belgatos, Surmont and nearby areas priced under $1,500,000 are selling at a very healthy rate, many with multiple offers and significant overbids. In the last year or so, there have been 18 sales of single family homes in this area (see map at right). Of those, 16 were on the open market of of those 16, 13 sold for more than list price.
Two properties sold “off market”, or not on the multiple listing service with a real estate professional involved. One of them was a sale from a landlord to tenants already in the property. The other was an off market short sale.
As of this writing, there are 2 pending sales in the neighborhood, both between $1.2 million and $1.5 million.
Additionally, there are 3 properties available for purchase. They range in price from $2.4 million and $2.8 million, and all have been on the market for more than a month.
Below, please have a look at what has sold – street names rather than precise addresses are used to provide privacy to the owners.
Interested in selling your east Los Gatos home? Please call or email me for a confidential, no obligation consultation today.
Mary Pope-Handy email@example.com 408 204-7673