Los Gatos real estate market trends

How's the Los Gatos real estate market? How are Los Gatos Real Estate Market Trends?The Los Gatos real estate market trends are strongly in the seller’s favor in the more affordable price points, and strongly in the buyer’s favor in the luxury bracket of the market. Let’s take a quick view of the months of inventory and you’ll see what I mean.

The chart below comes from my Live in Los Gatos blog in an article titled “Los Gatos real estate market trends by price point and high school district“.  It reflects the absorption rate for single family homes (99% houses but a few duet homes or attached houses – duet homes are not the same as duplexes, by the way.)  Homes offered at 2.5 million or less are flying off the market.  But check out the 14 homes listed at $3,000,000 to $3,499,999 – almost no takers there! Homes over $5 million do not tend to sell quickly due to the limited number of buyers in that pricing tier, and the long months of inventory is a hint at that reality.

Los Gatos CA Months of Inventory as of July 17, 2017

The inventory shortage in Los Gatos

 

In the more affordable price points of Los Gatos 95030 & 95032 (“in town” as opposed to 95033 in the Santa Cruz or Los Gatos Mountains) have a dire shortage of inventory.  All of Santa Clara County is really in the same boat with extremely low inventory of homes for sale.  Have a look:

Inventory of single family homes for sale in Los Gatos 95030 and 95032

In the lower price points, it does not seem to matter which school district the home is in – if the basics are all there (good list price, professional photography, careful marketing with the usual pre-sale inspections, reasonable showing access), the homes are selling fairly quickly.  In higher tiers, buyers care more whether the property is in this or that school area (see the linked article above for info on that.)

With low inventory comes low numbers of sales.  That is tough on people in the real estate industry, such as people at title insurance companies, inspectors, appraisers, and of course real estate sales people and brokerages.  For some Realtors, the loss of sales volume is partially offset by rising prices, if they are able to make sales in this climate.

General Comment: What is selling fastest in Los Gatos?

Turnkey houses in areas with no issues and no major repairs or updating needed are selling fast. This is even more true if they are nicely remodeled and priced appropriately or a little under market value. Examples of issues include being too close to high voltage power lines or other negative elements.  And, of course, they are in the lower pricing tiers of appx $2 million or less (or a little more, but under $3 million).

The highest priced homes over $3 – $5 million will sell better if they are in the Los Gatos Union School District.  It is especially challenging to sell a very high end home in east Los Gatos with Leigh High, both because at that price point most home buyers want Los Gatos High, but also it’s a further commute to most employment centers closer to Palo Alto.

School districts aside, many homes are having trouble selling, though – some of these properties have not been updated, have been over-improved for the immediate neighborhood, or were overpriced.  Often the over-pricing is because comps from the hot spring market were relied upon instead of the cooler summer or fall / winter market. It’s an easy mistake to make as the market is shifting.

The ultra luxury market over $5 million often struggles, though, no matter what school district it’s in.  There just are not a lot of buyers wanting to spend or able to lay out that much money.

Resources for the Los Gatos Real Estate Market Trends

Here are some resources to help you better understand the statistics and market direction for our beautiful town, updated frequently:

A great overview of the statistics for the town of Los Gatos 95030 & 95032 can be found on my Real Estate Report by navigating to Los Gatos and then under “zips” choose which part of town you want to understand better.  Or view the same report on my Live in Los Gatos Blog.

On my Live in Los Gatos Blog, you’ll find an article updated often which considers the Los Gatos months of inventory, or the absorption rate, by price point and high school district.  Here it is extremely clear that we have a consortium of realty markets, not just one market per se.

Additionally, I have a subscription to Altos Research, which provides market data based on currently listed homes for sale.  Altos displays info by zip code, and those charts will be posted below.  They are automatically updated each week, so please bookmark this page and return often.

Altos Research: Los Gatos 95030

90-day stats for Single Family properties in
LOS GATOS, CA 95030 as of August 11, 2017
Median List Price:$3,271,231Average List Price:$4,115,233
Total Inventory:27Price per Square Foot:$993
Average Home Size:3,427Median Lot Size:44,465
Average # Beds:4.07Average # Baths:3.60
Homes Absorbed:3Newly Listed:3
Days on Market:122Average Age:48

90-day stats for Condo properties in
LOS GATOS, CA 95030 as of August 11, 2017
Median List Price:$1,342,690Average List Price:$1,342,690
Total Inventory:1Price per Square Foot:$705
Average Home Size:1,903Median Lot Size:n/a
Average # Beds:3.00Average # Baths:2.50
Homes Absorbed:0Newly Listed:0
Days on Market:65Average Age:49

Median List price of homes for sale in Los Gatos

median inventory of Los Gatos real estate - active listings

Los Gatos CA days on market

Call Mary Pope-Handy, Realtor, at 408 204-7673 to buy or sell homes in Los Gatos, San Jose, or Silicon Valley

Los Gatos real estate market trends

Altos Research: Los Gatos 95032

90-day stats for Single Family properties in
LOS GATOS, CA 95032 as of August 11, 2017
Median List Price:$2,751,448Average List Price:$3,162,080
Total Inventory:35Price per Square Foot:$806
Average Home Size:3,313Median Lot Size:13,423
Average # Beds:4.33Average # Baths:3.88
Homes Absorbed:7Newly Listed:6
Days on Market:84Average Age:33

90-day stats for Condo properties in
LOS GATOS, CA 95032 as of August 11, 2017
Median List Price:$1,125,027Average List Price:$1,126,990
Total Inventory:7Price per Square Foot:$630
Average Home Size:1,724Median Lot Size:n/a
Average # Beds:2.80Average # Baths:2.38
Homes Absorbed:2Newly Listed:2
Days on Market:18Average Age:41

Los Gatos real estate market trends

median per square feet

Meading Los Gatos Market Heat

Los Gatos Mountains 95033

90-day stats for Single Family properties in
LOS GATOS, CA 95033 as of August 11, 2017
Median List Price:$1,305,577Average List Price:$1,596,529
Total Inventory:38Price per Square Foot:$496
Average Home Size:2,552Median Lot Size:157,841
Average # Beds:3.77Average # Baths:3.03
Homes Absorbed:3Newly Listed:4
Days on Market:89Average Age:37

 

Why do you get so much more home for your money in Los Gatos than in a similar place like Los Altos? Why are the Los Gatos Real Estate Market Trends milder than Palo Alto or nearby?

Silicon Valley has a  concentration of high tech jobs close to Palo Alto, Mountain View, Sunnyvale and nearby, plus many others in Santa Clara, north San Jose and Cupertino.  Los Gatos is not the “closest in” for most of these companies (Netflix excluded!).  Traffic here is pretty terrible, especially on highway 85, so being a little further out has kept the Los Gatos housing market somewhat less in demand than our neighbors to the north like Cupertino and Los Altos. This is especially true for east Los Gatos, which is more dependent on Highway 85 south of 17. Even so, it’s not a far commute to Apple.  With everything that this town has to offer, prices here are really a very good deal for what you get!

For more information on the Los Gatos real estate market trends which are relevant to your property, or the one you’d like to buy, please contact me.  I would be happy to meet with you and discuss working together so that you can get the best deal possible with the current climate.

Please also visit my Silicon Valley real estate report, which includes info on all the cities and towns in San Mateo County, Santa Clara County, and Santa Cruz County. Here’s the link to the Los Gatos page. Also view the Los Gatos real estate market report on my SanJoseRealEstateLosGatosHomes.com site.

Browse Los Gatos homes for sale on the Live in Los Gatos blog.
Los Gatos homes for sale – view by map on the Live in Los Gatos blog.

Posted in Home, Los Gatos Tagged with: , , , ,

Low flow toilets will be required soon

As of January 1, 2017, all single-family homes in California built before 1994 will be required to have only low flow toilets and certain other water saving fixtures installed.

Homeowners are required to replace older commodes with low flow toilets as of Jan 1 2017

What constitutes a low flow toilet?

Low flow toilets will be designed to use no more than 1.6 gallons on average per flush. Some water conserving commodes will have dual flushes, with one for solids that uses more than 1.6 gallons, and one for liquids which will utilize fewer than 1.6 gallons.

What must be replaced?

Most of the attention has been around Low flow toilets, but they aren’t the only objects of the new law. What fixtures won’t pass the standards of the upcoming law?

  • Toilets manufactured to use more than 1.6 gallons per flush on average
  • Urinals manufactured to use more than one gallon of water per flush
  • Showerheads manufactured to use more than 2.5 gallons of water per minute
  • Interior faucets emitting more than 2.2 gallons of water per minute

You might have anticipated the answer if you’ve been watching Santa Clara County’s water saving efforts during the drought. Showerheads and faucet filters have been offered for free in many instances and there was the HET toilet rebate program, too.

Take note that the law requires the replacement of units manufactured for a high level of water use, so displacing water in your toilet tank with a brick, bottle, or by other means does not make the fixture pass law.

What changes will this effect in real estate transactions?

This is not a point-of-sale law. So what does that mean? Owners must install WCP fixtures (Water-Conserving Plumbing fixtures), including low flow toilets, whether they are selling or not. If you own a home you must comply. If a homeowner does not comply, however, it will not affect a property transaction. Either way the seller is required to disclose.

What should be disclosed when selling a home regarding these devices?

  1. The legal requirements in writing.
  2. Any and all compliant and/or noncompliant fixtures, if any, on the property in writing.
  3. “Seller’s affirmation,” meaning the seller’s confirmation that the disclosures provided are in fact the sellers and not the agents, that they are not part of the contract, nor a warranty, and do not substitute a buyer’s inspection. Mandatory when a TDS is used.

Both the TDS (Transfer Disclosure Statement) and the ESD (Exempt Seller Disclosure) will be (or have been) modified to include the legal language explaining the regulations as required by the new law, which takes care of disclosure #1.

The second disclosure requirement, disclosing compliance and/or noncompliance, will also be covered in the ESD forms. The TDS provides check boxes to disclose compliant fixtures. The law is still being fine-tuned, so it is yet unclear whether an unchecked box on the TDS disclosing replaced fixtures is enough of a disclosure for noncomplying fixtures.

The third provision is only required with a TDS and will be part of the Seller Property Questionnaire (form SPQ) update in December.

However…

Many local laws do have point-of-sale WCP fixture requirements, which this law will grandfather in so long as they were in effect before July 1st, 2009. Even if the requirements are less severe, such as allowing a higher gallon limiter, these local laws will continue to apply.

Newer local ordinances, those established any time after July 1st, 2009 or in the future, are allowed to establish or promote stricter regulation and will not be supplanted by the state law.

In conclusion

Plan to update old fixtures, but check local law before you do for more or less stringent laws. Homeowners, plan to invest in thsee updates between now and the new year (plumbers might be busier than usual for a while). And look for freebies and rebates which are becoming less frequently available.

Posted in Home Improvement, Water conservation Tagged with: ,

Earthquake Insurance

Earthquake damaged house in Santa Cruz after the Loma Prieta quake in 1989 (San Andreas fault) - earthquake insurance would help to pay for rebuilding here

Earthquake damaged house in Santa Cruz after the Loma Prieta quake in 1989 (San Andreas fault)

Do you need earthquake insurance?  If you live in Los Gatos, Saratoga, San Jose, or anywhere in Silicon Valley, you are probably aware that it is very likely that we’ll experience a violent quake within the next 30 years.  The San Francisco Bay Area is woven with a number of different faults, some very active, others quiet for thousands of years: San Andreas, Hayward, Calaveras, San Gregorio, Greenville, Silver Creek, Monta Vista – Shannon, and many more.  It is not hard to imagine one of them letting off some serious pressure.

What are the odds of a very severe earthquake in the Bay Area?

I looked up the stats on the USGS site, and there’s a 72% chance of an earthquake of 6.7 on the Richter Scale or more between now and 2043.  The most likely area is the Hayward fault (33%), followed by the San Andreas (22%), per this USGS report:

http://pubs.usgs.gov/fs/2016/3020/fs20163020.pdfOn that same report, page 1, it says there’s a 98% chance of a 6.0 quake somewhere in the Bay Area between now and 2043.   So it’s wise to take it seriously (this is reminding me to update my emergency supplies!) Click the image below to go to the pdf referenced above.

San Francisco Bay Area Earthquake Faults and Probability of Major Quake by 2043

San Francisco Bay Area Earthquake Faults and Probability of Major Quake by 2043

What does earthquake insurance cost?

Your premium for earthquake insurance varies based on many factors, including the age of the home, whether or not it is bolted to the foundation, the size of the structure, the exact location, etc.  For instance, if you buy a house in the Santa Cruz Mountains which sits directly on top of the San Andreas Fault, or in Fremont along the Hayward Fault, you would expect to pay more than if you were many miles away from either of these areas.  Further, the amount of your deductible will impact the cost, too – the lower your deductible, the higher your premium.
Also, it should be noted that earthquake insurance covers the structure and may not include the contents of the home.  The point of it is to make sure you can rebuild or repair after a major temblor.    There are separate policies or riders for possessions, but primarily for the essentials, not the frills.  Things such as fine Belleek china (which we lost in the 1989 Loma Prieta shaking) will not be covered.
Most people who obtain this type of insurance will get it from the State of California (even if it’s offered via their regular insurance agent).

 

Here’s a great resource for info from the California Dept of Insurance:
http://www.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/eq-ins.cfm
There’s a link on the page above that goes to the actual CA state insurance site, and there you’ll find a calculator for the cost of premiums from the California Earthquake Authority. [The CEA site says “CEA is a not-for-profit. We are privately funded, and publicly managed by a governing board. We are not tied to the state budget. We are financially strong, with a total claim-paying capacity exceeding $12 billion. Our participating insurance companies sell and service our policies (Homeowners, Mobilehome owners, Condo unit owners, and Renters) on our behalf.]  This is pretty cool as it allows you to change the deductible to as low as 5% and to increase or decrease things like “loss of use” coverage.  http://www2.earthquakeauthority.com/Pages/calc.aspx
For most people, this type of insurance is very costly, perhaps running $2,000 to $3,000 per month with a large deductible and no possessions covered.  Prior to the Loma Prieta (1989) and Northridge (1994) quakes, this type of insurance was more affordable and was more commonly bought by home owners.  Today, the reverse is true.  Statewide, only about 10% of home owners opt to purchase this coverage.

More resources on earthquake insurance

Consumer Reports article from 2014: Should you buy earthquake insurance, is it worth it?http://www.consumerreports.org/cro/news/2014/08/should-you-buy-earthquake-insurance/index.htm

MarketWatch article from 2014, updated June 2016: Despite quakes, most California homeowners don’t have earthquake insurance
http://www.marketwatch.com/story/25-years-after-bay-area-quake-most-dont-have-earthquake-insurance-2014-10-17

What is a cripple wall? (on this site)

Posted in Buying tips, Finance Information, First time homebuyers Tagged with: , , , ,

San Mateo County listings of homes for sale on the MLS

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Foster City, California Real Estate

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Hillsborough, California Real Estate

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Menlo Park, California Real Estate

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Burlingame, California Real Estate

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Can you buy a Silicon Valley home with ten percent down?

House Key:  Can you buy a home with just ten percent down?Silicon Valley Realtors have been seeing a “shifting market” for about a year now, at least in many segments of the real estate market. What does that mean for home buyers and home sellers? One major difference is the amount of cash, or the percentage of cash down, needed to compete in the bidding wars of recent years. Ten percent down purchase offers may become viable again.

Quick reviewL the years of bidding wars – high amounts of cash down, few or no contingencies

Since 2012, we have seen an incredible run up in Silicon Valley home prices, particularly in the hotbed areas of Palo Alto, Mountain View, Cupertino, Sunnyvale, and nearby areas. For each property that went for sale, there were multiple offers – at least most of the time! With some of the extreme cases, homes were selling with more than a dozen offers, sometimes more than two dozen, and selling “all cash, no loans” and also with no contingencies. Sometimes, buyers were lucky and there were no cash offers to compete with. In those cases, the strongest offers (large down payment and few or no contingencies) would simply go to a buyer with the largest down payment and the smallest number of contingencies for things like loan, appraisal and inspection. Much of the time, it would be 30% or more down and no contingencies. (You can check the market stats going back to 2002 at my Silicon Valley Real Estate Report.)

Silicon Valley real estate history repeating itself

For those new to the area, this isn’t the only time when we’ve had a crazy red hot market. We saw this just before the great recession, we saw it in 2000, and we saw it in the mid to late 1980s, and before, too. In fact, it seems to happen about every 10 years. It’s a pattern: economy good, inventory low, qualified buyers fighting to buy a limited supply of Silicon Valley real estate, prices escalate, clauses get increasingly insane (no contingencies, huge down or all cash).

Hard as it can be to imagine, that became the norm. Especially for the nicest homes in the premium areas with shorter commutes and great schools. If anyone asked “Can you buy a Silicon Valley home with ten percent down?”, the answer was a resounding “no” – very very unlikely.

For that reason, in recent years, it has been challenging for home buyers to purchase with less than about 25% down (because with multiple offers, even the gold standard 20% wasn’t enough). The market has been softening a bit, though. Most homes are still selling fast by national standards, but the days on market have been increasing and the sale price to list price has been decreasing. Some homes don’t sell until they’ve had a price reduction. And then they sell with just one offer. We are seeing the return of contingencies.

Smaller down payments will come with a slower, quieter market that is more balanced. A 20% down offer will no longer be viewed badly at all. Read more ›

Posted in Buying tips, Finance Information, First time homebuyers Tagged with:

What is a cripple wall?

What is a cripple wall? The wall between the foundation and the first floor is a cripple wall.What is a cripple wall? If you are buying or selling real estate in Silicon Valley, you most likely have seen a seller questionnaire asking if the house has a cripple wall, and if so, has it been reinforced.  Most people have no idea what it is, let alone if they have one that’s been improved.

What is a cripple wall?

A cripple wall is a wooden wall between the foundation and the first floor of a wood frame house.  This wooden wall is usually less than a full story high and runs between the foundation and the first floor.  Often it looks like it’s half the height of a regular wall, and it is part of a basement. (Again, there are not many basements in Silicon Valley, so  it’s not a common sight in most neighborhoods. Although many homes have a crawl space, these do not usually have cripple walls if they are on a level lot.)

Put another way, a cripple wall is found when there is a distance of several feet  between the foundation and the first floor.  When you visit those lovely Victorian homes in which you walk up about 6 or 10 steps to get to the front door, and sometimes there are windows peering out from a basement – there’s a cripple wall.  It is the wall between the foundation and the first floor. In the photo, you see basement windows resting on or near the foundation. Above them is the first floor.  This older house has a cripple wall.

Cripple walls are also found on sloped hillside homes. With an inclined lot, part of the first floor may be directly on the foundation, but perhaps not all of it.  Part of the house may have a cripple wall in that case.

Most of the time, cripple walls are found in older, possibly historic homes.  Los Gatos has a number of historic districts and houses that qualify as historic. Part of it was badly hit in the 1989 quake.

What is the risk with a cripple wall?

In California, we have periodic earthquakes, and unreinforced cripple walls can be the weakest part of the structure when a quake hits.  If the walls aren’t strengthened, they can buckle and collapse. The taller the cripple wall is, the more at risk it seems to be for collapsing during a temblor.

Jim and I were living in Santa Cruz and just about to close on the purchase of our first home in the Cambrian area when we experienced the Loma Prieta earthquake.  Our Neary’s Lagoon neighborhood was very badly hit, with many older houses extensively damaged or destroyed. Many had cripple walls that were apparently not reinforced, or not sufficiently reinforced for earthquake safety. (Luckily, our rental townhome stayed structurally sound, though everything inside moved violently.)  The photo below was taken by my better half of a house about a block from where we lived.  Before this happened, they may not have been able to answer our question of the day, “what is a cripple wall?”  But I am sure that in the hours and days after the quake, they found out how dangerous it was to have an unreinforced one.

House with cripple walls destroyed in Loma Prieta earthquake of 1989

Older Santa Cruz house with cripple walls destroyed in Loma Prieta earthquake of 1989

Here’s a helpful video, which I think lays out the risk of danger much better.

How to improve the safety of cripple walls

The goal is to strengthen the cripple wall, usually making a shear wall so that the short wooden wall won’t buckle and give way. Here are a couple of resources that should be helpful for anyone wanting to improve safety with a cripple wall.

FEMA has a guide regarding reinforcement of cripple walls (it is a pdf)
Earthquake Strengthening of Cripple Walls in Wood-Frame Dwellings

And one more helpful video from the same contractor. (I don’t know him but he has a great set of vidos on YouTube.)

Related: Earthquake Insurance

Posted in Home Improvement, Older & Historic Homes, Safety Tagged with: ,