The Belwood of Los Gatos house on Belblossom Drive was not overpriced in the 9’s, but it hasn’t sold and the price has just dropped like a rock to $799,000. I wish I could buy it myself at that price!
Is this a hint of what is to come?
It might be.
The east side of the Santa Clara Valley and the south county areas have been suffering with a very difficult real estate market these last few months.
Maybe it’s spreading to the west valley communities now too.
For a long time we had a “bifurcated market”. The westside was still hot-hot-hot. Homes in Sunnyvale and Palo Alto were flying off the market. Multiple offers. As is sales. All of that – continuing despite the travails on the poorer side of the San Jose market.
But now it looks like we’re seeing the market stalling out. By early next week we should have the real estate statistics for September, but from my cursory look at homes online and in the MLS in Los Gatos and Saratoga, I see a very noticeable slowdown in sales activity.
In the case of one of my buyer clients, I got an email that he and his wife are going to wait. “The interest rate is .75% higher than I was budgeting”, he lamented.
In a buyer’s market, buyers don’t buy. They wait. They wait for interest rates to improve (by the way, that often happens in the dead of winter) and/or for prices to improve.
I think what is happening now – hindsight is always 20/20 but figuring out the current market is trickier – is that we are caught in a changing tide. I believe that our “neutral” or balanced market is now falling into a stronger buyer’s market.
If that is the case, prepare for more drastic price cuts in Los Gatos and Saratoga and all of Silicon Valley to get homes sold.
That’s what the buyers are waiting for.
