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 more balanced, to the benefit of the buyer, 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 $3 million or less are selling in a flash. Look any higher and you’ll start to see some dramatic slowdown over $3,000,000, and in the $4.5 – $5 million range there’s no movement. Homes over $5 million do not tend to sell quickly due to the limited number of buyers in that pricing tier, but even so, a sale did occur, and that’s been more common in recent months.


Los Gatos 95030 95032 months of inventory June 20 2018


And from about two months ago:

2a - Los Gatos real estate market trends

To see more about the months of inventory in Los Gatos by price point and high school district, please check out today’s article on the Live in Los Gatos blog, which breaks it down by homes with Los Gatos Saratoga Union High School District and those in the Campbell Union High School District:

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) there is a dire shortage of inventory. All of Santa Clara County is in the same boat, having extremely low inventory of homes for sale. Have a look:

Los Gatos inventory of single family homes 95030 95032


From this chart you can see that inventory from 2018 is a little more than the same time last year, but lower than every other year since 2012 (and likely before).

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.)

Low inventory means fewer sales.
Read more ›

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Cuperino California Real Estate Market

Cupertino has been a hot ticket item for a long while. With plenty of business, major employers like Apple, great public education and parks, it’s no surprise this is a highly desirable place to call home. Both the single family and condo markets have been hot for years, but with the prolonged seller’s market that’s surrounded the South Bay for the last year or more, things are even crazier than usual.

So how to we understand the market?

Using data from the MLS, below are two different charts for analysis. Firstly, the RE Report takes the data of home sales over the last month and compares it with the month prior and the year before to identify shifts and trends. At the bottom of this page is a graph taken from Altos Research, which used data gathered from the same source but divides the housing market into pricing tiers, showing the market trends and changes within these distinct groups from entry-level to luxury markets.

Cupertino Single Family Housing Market

For an average home in Cupertino, expect to pay no less than $2,000,000 – a high price for a popular community. The average and median price has risen slightly since last year, and with sales selling for higher above list price, the market is definitely hotter than 2016. Sales vs list price percentages are stable since last month, with homes selling well over list price. Homes are selling on average in about one month, a speedy turnover, and many more have sold than are active. There is a strong sellers market that refuses to let up in the single family market in Cupertino. Read the full RE Report with more information through the link.

Trends At a Glance Sep 2017 Previous Month Year-over-Year
Median Price $2,103,000 (-7.6%) $2,275,000 $2,067,500 (+1.7%)
Average Price $2,092,880 (-13.0%) $2,406,620 $2,068,280 (+1.2%)
No. of Sales 26 (+44.4%) 18 20 (+30.0%)
Pending 21 (-16.0%) 25 19 (+10.5%)
Active 10 (-33.3%) 15 28 (-64.3%)
Sale vs. List Price 110.7% (0.0%) 110.7% 106.3% (+4.2%)
Days on Market 31 (+82.6%) 17 18 (+72.8%)
Days of Inventory 11 (-55.4%) 25 41 (-72.5%)

And from last month:

Trends At a Glance Aug 2017 Previous Month Year-over-Year
Median Price $2,275,000 (+10.4%) $2,060,000 $1,880,000 (+21.0%)
Average Price $2,406,620 (+19.1%) $2,021,040 $1,959,810 (+22.8%)
No. of Sales 18 (-21.7%) 23 17 (+5.9%)
Pending 25 (+78.6%) 14 22 (+13.6%)
Active 15 (-25.0%) 20 26 (-42.3%)
Sale vs. List Price 110.7% (+0.9%) 109.7% 105.2% (+5.2%)
Days on Market 17 (+40.2%) 12 27 (-37.4%)
Days of Inventory 25 (-4.2%) 26 46 (-45.5%)


Cupertino Condo Market

In most markets, condos show very different trends from the housing market, usually being much slower. That being said, a prolonged seller’s market and a huge lingering demand has made many condo markets just as hot as their housing couterparts, and Cupertino is no exception. Sales vs list price shows that properties are selling on average at 110.5% of list price – almost as high as single family homes – and faster at a mere 18 days on market. With that in mind, notice what a small inventory the data is collected from. With low numbers, the percentages can swing wildly and are not as reliable. Looking at trends over many months is more helpful in this case. Condos have been selling quickly and well over list price for as far back as the charts show, meaning the condo market is a firey hot seller’s market. Read more in the full RE Report through the link.

Trends At a Glance Sep 2017 Previous Month Year-over-Year
Median Price $1,178,000 (-13.8%) $1,366,500 $1,000,000 (+17.8%)
Average Price $1,246,350 (-9.4%) $1,375,500 $1,100,270 (+13.3%)
No. of Sales 11 (+37.5%) 8 15 (-26.7%)
Pending (-42.9%) 7 (-50.0%)
Active (-50.0%) 2 (-87.5%)
Sale vs. List Price 110.5% (+3.2%) 107.0% 102.4% (+8.0%)
Days on Market 18 (+40.5%) 13 29 (-37.0%)
Days of Inventory (-64.8%) 8 15 (-83.0%)

And from last month:

Trends At a Glance Aug 2017 Previous Month Year-over-Year
Median Price $1,366,500 (+2.7%) $1,330,000 $1,001,000 (+36.5%)
Average Price $1,375,500 (+7.4%) $1,281,000 $1,046,130 (+31.5%)
No. of Sales (+60.0%) 5 14 (-42.9%)
Pending (0.0%) 7 15 (-53.3%)
Active (-50.0%) 4 11 (-81.8%)
Sale vs. List Price 107.0% (-2.9%) 110.2% 101.9% (+5.1%)
Days on Market 13 (+74.0%) 7 38 (-66.4%)
Days of Inventory (-68.8%) 24 24 (-68.2%)

2018: please see my new listing in west San Jose with Cupertino schools:
6922 Chantel Court, San Jose CA 95129 – condo for sale with Cupertino schools!

Altos Research Cupertino Market by Pricing Quartiles

The chart below shows market trends for Cupertino divided into four pricing tiers. Looking at it in quartiles shows not only the average cost of properties, but also the differing trends. Here you can see that the luxury sector has harsher high and low points, and that the current luxury market has falling prices for the first time in a while. the lowest price points are the most stable, and show a fair amount of stability through last spring and summer. The high-end (but not luxury) market may have some bumps, but it’s on a steady upward trajectory, meaning this might be where buyers are facing the greatest challenges and fighting to make competitive offers.

CupertinoQuartiles - Cuperino California Real Estate Market


If you’ve found this information helpful and you are interested in buying or selling a house in Cupertino or around Silicon Valley, I would love to hear from you! Feel free to check out more of my posts on housing markets and neighborhoods around the South Bay, as well as tips for buyers and sellers on my other blogs as well: Valley of Heart’s Delight and Live in Los Gatos.


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Campbell CA real estate market trends

Campbell water tower and bannerYou see it in the newspaper headlines, you hear it from your friends and neighbors – Silicon Valley real estate is a hot commodity. If you’re a home owner or shopping for your first Silicon Valley home, you’re probably making an effort to keep track of the housing market. For years I’ve been writing market updates on my Valley of Hearts Delight blog and my Live in Los Gatos blog, but in case you haven’t found them, I’m writing a new post for one of Santa Clara County’s most popular cities: Campbell!

An active community with a charming downtown, easy access to freeways and VTA lightrail systems, and backdropped by the lovely Santa Cruz mountains, it’s no wonder why Campbell is so popular. So how is the Campbell CA real estate market?


Campbell CA real estate market for Single Family Homes

Hot! Like the rest of the valley, Campbell is in a strong, continuous seller’s market. That means that the most desirable properties might see multiple offers, going higher than normal, and that homes that are less in demand are selling more quickly than usual. To keep track of these trends, I use data from the MLS (Multiple Listing Service) on recent home sales. Below are charts which use the same data to break down trends by month and compare; these are part of a service I provide called the RE Report.

Find the full RE Report for the Campbell single family housing market here.

Trends At a Glance Jan 2018 Previous Month Year-over-Year
Median Price $1,541,500 (-1.1%) $1,558,500 $1,200,000 (+28.5%)
Average Price $1,634,600 (+4.2%) $1,568,360 $1,378,990 (+18.5%)
No. of Sales 10 (-70.6%) 34 11 (-9.1%)
Pending 10 (-16.7%) 12 19 (-47.4%)
Active (+350.0%) 2 24 (-62.5%)
Sale vs. List Price 108.8% (-3.2%) 112.4% 100.0% (+8.8%)
Days on Market 13 (+37.9%) 10 24 (-43.7%)
Days of Inventory 27 (+1,430.0%) 2 65 (-58.7%)

Last month, the Campbell CA real estate market remained a clear seller’s market. Homes were selling well above list price, currently 108.8% of what was listed, and have been high for years at this point. Days on market low, putting turnover under two weeks. Though the number of active listings has risen since last month (both well below last year’s inventory), sales have lessened, which may be caused by a regular winter cooling trend.

And from the month before for comparison:

Trends At a Glance Dec 2017 Previous Month Year-over-Year
Median Price $1,558,500 (+7.2%) $1,453,250 $1,150,000 (+35.5%)
Average Price $1,568,360 (+4.0%) $1,507,670 $1,248,370 (+25.6%)
No. of Sales 34 (+30.8%) 26 23 (+47.8%)
Pending 12 (-61.3%) 31 15 (-20.0%)
Active (-77.8%) 9 19 (-89.5%)
Sale vs. List Price 112.4% (+2.0%) 110.2% 101.3% (+10.9%)
Days on Market 10 (-53.6%) 21 34 (-71.2%)
Days of Inventory (-82.4%) 10 25 (-92.9%)

Campbell CA real estate market for townhomes and condos

Most of the time, Silicon Valley condos have a cooler, slower market than the housing market. However, recently, the seller’s market has impacted condos as much as the housing market. That being said, inventory in the condo market is usually low and this small amount can make for big swings in data which may not be the most accurate representation of the market.

See more in the full RE Report for Campbell condos through the link.

Trends At a Glance Jan 2018 Previous Month Year-over-Year
Median Price $751,000 (-11.6%) $850,000 $767,500 (-2.1%)
Average Price $751,000 (-8.2%) $817,667 $716,700 (+4.8%)
No. of Sales (-83.3%) 12 10 (-80.0%)
Pending (+200.0%) 2 (-14.3%)
Active (N/A) 0 (-80.0%)
Sale vs. List Price 112.2% (+4.1%) 107.8% 101.2% (+10.9%)
Days on Market (-27.8%) 9 49 (-86.6%)
Days of Inventory 15 (N/A) 0 15 (0.0%)

Selling well above list price, the condo market has been as hot as, and sometimes stronger than, the single family housing market. Days on market half that of the housing market, which has been consistent for months. Though low inventory causes big changes in data, we can see that properties are selling quickly and well above list price and have been for many months. The Campbell condo market is hot, about equally strong a sellers market as the single family housing market in this area.

And from the month before for comparison:

Trends At a Glance Dec 2017 Previous Month Year-over-Year
Median Price $850,000 (-8.1%) $925,000 $755,000 (+12.6%)
Average Price $817,667 (-14.8%) $959,538 $717,977 (+13.9%)
No. of Sales 12 (-7.7%) 13 13 (-7.7%)
Pending (-81.8%) 11 (-77.8%)
Active (N/A) 0 (-100.0%)
Sale vs. List Price 107.8% (+2.3%) 105.4% 100.9% (+6.9%)
Days on Market (-49.1%) 18 37 (-76.0%)
Days of Inventory (N/A) 0 12 (-100.0%)

Pricing Trends by Quartiles

The final information included in this brief analysis is from Altos Research (to which I have a subscription). In this chart, the market is divided into four pricing tiers, from the lowest entry-level properties to luxury sales. Here you can see prices have been creeping upwards with very few dips steadily for over a year, though luxury homes have had the greatest peaks and valleys. Still, the current trend is clear: prices are rising in every market.

000 - Campbell CA real estate market trends

Median LIST price for single family homes in Campbell, CA:


app?pai=50109450&service=chart&st=CA&cid=69&zid=324&rt=sf&ra=a&q=a&s=median price&sz=m&ts=e&theme=oldchart - Campbell CA real estate market trends


app?pai=50109450&service=chart&st=CA&cid=2052060&zid=404&rt=sf&ra=a&q=a&s=median inventory&sz=m&ts=e&theme=oldchart - Campbell CA real estate market trends

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South San Jose

California poppies can be found in South San JoseSouth San Jose is one of the more affordable areas in Silicon Valley. It enjoys convenient freeway and transit access, running alongside Highway 101 and Highway 87 at points, and coming quite close to Highway 85, also. The Tamien light rail station is close to South San Jose – nearly in it. Cal Train can be accessed along Highway 101.

Coyote Creek graces the length of this district, offering lots of open space and park land. Downtown is nearby, and so is shopping at Eastridge Mall, or a visit to Raging Waters. South San Jose is close to just about everything!

Where is South San Jose?

As the name suggests, South SJ is a district south of downtown. The eastern side is bounded by Highway 101. On the northern end, it runs along a portion of Williams, near downtown.  The western border follows Highway 87 in part, then cuts east at Hillsdale and south again on Monterey Street.  The southern tip extends to Blossom Hill Road, where Highway 101 and Monterey Street are very close to one another. That area of South San Jose is part of what was once the town of Edenvale.

The zip codes for this area are 95111, and parts of 95112, 95116, 95121, 95136, and part of 95122.

South San Jose Map - South San Jose

Adjacent parts of San Jose are downtown San Jose (and specifically Naglee Park) to the north, Willow Glen to the west, Santa Teresa and Blossom Valley to the south, and Evergreen to the east.

Which neighborhoods are in South SJ?

Neighborhoods and subdivisions in South San Jose include Great Oaks, Riverview, Havens, Serenede, Melody, Seven Trees, Hellyer, Los Arboles, Sylvandale East, Rancho, Ramblewood, Locke, Stonegate West, Albanese, Cramer-Umbarger, Brenning, Summerside, Meadows, Rockspring, Kennedy, and Santee, among others.

What are the public schools?

For elementary and middle schools, most of this area is served by the Franklin-McKinley School District. The southern end of South SJ is part of the Oak Grove School District. All of this area is within the East Side Union High School District. Check out the map here: https://www.sanjoseca.gov/DocumentCenter/View/1351

South San Jose landmarks and popular places

South San Jose includes the much beloved Happy Hollow Park and Zoo and the Santa Clara County Fairgrounds. If you’ve adopted a pet in Silicon Valley, there’s a good chance that you were in South San Jose at the San Jose Animal Care Center. You also know of it for one of the largest, and oldest, cemeteries in the area: Oak Hill. Love to golf? The scenic Los Lagos Golf Course runs alongside Coyote Creek.

Last winter, part of South San Jose flooded during an extraordinarily heavy rainfall over a very short period of time. If you’re local, you heard about the devastating impact of the floods in areas along Coyote Creek. Several areas were hard-hit, including the Rockspring neighborhood.


How’s the real estate market in South San Jose? Check out all the current real estate market statistics and trends at the Silicon Valley Real Estate Report: South SJ real estate market info.

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Saratoga, CA

Saratoga California View from West Valley CollegeOnce a logging town known as Bank Mills, the Saratoga, CA, is now considered an upscale suburb of Silicon Valley and San Jose with a very high quality of life.

Where is the city of Saratoga? You’ll find it just north of Los Gatos and Monte Sereno along Highway 9, and like them, it sits at the foothills of the Santa Cruz Mountains and provides a path to the coast, also via Highway 9 (Big Basin Way).

Downtown Saratoga, CA, known as “Saratoga Village” or simply “the Village” is an active strip along Big Basin Way with shops, boutiques, restaurants, spas, and wine tasting bars. Just off this main drag you’ll also find the lovely Wildwood Park.   It is less busy at night than Los Gatos, so those who prefer things a little quieter will love it here.

There are plenty of events and entertainment to keep you busy with venues such as Villa Montalvo, the Mountain Winery, the Hakone historic estate and gardens, West Valley College, vineyards and horseback riding all within town limits.

  • Downtown Saratoga Village along Big Basin Way
    Downtown Saratoga Village along Big Basin Way

What are the Saratoga, CA neighborhoods like?

Saratoga, CA, neighborhoods by map

Saratoga, CA neighborhoods by map – please click to see details on Google Maps

Neighborhoods often boast meandering roads, no streetlights, and views of the hills giving Saratoga its signature rustic feel. There are some older, historic areas known as Heritage Lane (Austin Way still has a brick road!) with interesting architecture.  Like the rest of Santa Clara County, most of this lovely city has more contemporary and ranch style houses.

In most cases, the smallest lots are around 10,000 square feet, and the most modest homes as small as 1000 or 1200 square feet, generally, with values beginning at around $1 million for a smaller house that needs a whole lot of work (consider the Paseo and Quito Village areas or nearby for “entry level” houses, or any of the many condominium or townhouse communities for more affordable options). The most expensive homes are truly luxury estates, worth many millions of dollars and usually sitting on multiple acres, frequently with views and in hilly locations west of Highway 9.

Some of the neighborhoods are described on another page on this site:
Saratoga Real Estate And Saratoga Homes For Sale

Some of the neighborhood or area names you’ll want to know include these

  • The Golden Triangle
  • The Platinum Triangle / Montalvo / Glen Una area
  • Prides Crossing
  • Parker Ranch
  • Les Chateaux de Notre Dame
  • Austin Corners
  • Montewood
  • Fruitvale Area
  • Carnelian Glen
  • Toll Gate / Saratoga Heights
  • Pierce Road / Mount Eden
  • Civic Center
  • Shadow Oaks
  • Aspesi / Marshall Lane
  • Canon /West of Highway 9
  • Brookview
  • Blue Hills
  • Shadow Oaks
  • Saratoga Village
  • Portos / Harleigh
  • Paseo / Quito Village
  • Ravenswood
  • Madronia Historic area
  • West of Saratoga-Sunnyvale / Reid

Generally speaking, homes west of Highway 9 or west of Saratoga-Sunnyvale will be more expensive than those in the Golden Triangle – but not always.

Beyond home buying, Saratoga is a good place to retire, too: the Saratoga Retirement Community is a large campus with independent living, assisted living, and nursing care available in an extremely scenic setting.

For some, this pretty city also includes the last real estate they will ever need – the beautiful and historic Madronia Cemetery.

Saratoga is well known for its low crime rate and top notch schools. If this is what interests you, make sure you know where the school district boundaries lie! Read more ›

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San Jose – East Valley

Often known simply as East San Jose or the Eastside, the East Valley was once a city of its own, annexed by San Jose, its name sake, in 1911. (Today, the East Valley encompasses more than just the former city bearing the same name.)

A celebrated historic East Valley resident was César Chávez, and the East Valley was the first area to begin the grape boycott.

The East Valley terrain includes foothills and flat lands at their base. The eastern foothills are part of the Diablo range, and many neighborhoods have views of the range or the valley. The Diablo Range also provides plenty of natural space, and a blend of parks and private ranch land with residential areas in the foothills. Parks include the Mount Diablo State Park, Alum Rock Park, Sierra Vista Open Space Preserve, Joseph D Grant Ranch Park (the largest park in Santa Clara County), and more.

Entertainment and leisure opportunities for the family include Raging Waters water park, Eastridge Mall the Mexican Heritage Plaza, Lake Cunningham, and Kelley Park, which includes Happy Hollow Zoo, the Japanese Friendship Garden, the History Park, and two museums, the Portuguese Historical Museum and Viet Museum, along with plenty of picnic areas, walking paths, lawns, tree groves, and more.

Access to two major lines of public transit, BART (Bay Area Rapid Transit) which will be installed in the next couple of years and current VTA (Valley Transit Authority) connection, makes travel simple. This is a more affordable area in the Valley, but as such schools do not rate as highly in this area as in others and the crime rates could be better. CalTrain is accessed along Highway 101, too.

Below please find a live Altos Research chart, showing the median list price of homes for sale – this will give you an idea of what a house might cost there.

Real Estate Market Chart by Altos Research www.altosresearch.com

Read more ›

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Menlo Commons

I recently had the pleasure of closing on a listing in Menlo Commons, a senior community, located at 2140 Santa Cruz Ave in the lovely city of Menlo Park!
Menlo Commons is a 55+ community, meaning that at least one resident must be age 55 or older, but other residents can be any age. Residents enjoy plenty of features in the resort-like community space, with common areas including a large kitchen, a large formal dining or meeting room, an exercise room, plenty of lounge areas with large windows, grass fields, and a pool and hot tub, to name a few. Common areas, grounds, and resident parking are gated with ample open parking to residents and visitors. Units come in one to two bedroom floorplans, each with balconies, and Home Owners Association (HOA) Dues are appx $600-$760 per month for one and two bed units respectively.
What makes Menlo Commons really special is it’s fantastic location. This complex is stationed near the boarder of Menlo Park and Stanford with plenty of benefits to it’s location. Menlo Commons has easy access to both 280 and 82 and is tied into a bus route. Shopping and entertainment abound, with Stanford Golf Course about a block away, a Safeway less than half a mile away, Stanford Shopping Center about 1.5 miles down the road with downtown Menlo Park only a little farther. Living so close to the university makes it a snap to enjoy regular outings to enjoy musical, theatrical, and sports events.
Over the last 6 months or so, units have been selling between $690,000 and $910,000. Only one of these five sales was a single bed unit, and it was the only one which sold below list price. With over 120 units and showing 13 sales in the year 2017, most selling in under a month, there appears to be a slow but regular inventory of units available in Menlo Commons and a similar demand. Who wouldn’t want to live in a place with so much to offer!
Interested in the City of Menlo Park? View the market report, updated monthly, here: Menlo Park condo real estate market
Menlo Commons Community

Some of the community spaces in Menlo Commons.

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Buyer closing costs and property taxes

dollar billOne of the more confusing elements for home buyers attempting to anticipate their closing costs is the property tax prorations, which are referenced in the purchase agreement or contract, but not explained. As most Silicon Valley real estate consumers know, home owners in California do pay property taxes. When a home is being sold, the sellers pay that tax up to the date of closing, and the buyers pay it from the date of closing on. Put another way, the property tax is prorated.
While that seems simple enough in theory, the ins and outs of it are not so straightforward due to the way the county collects the funds and how slowly the county’s system updates the amount owed after the change of ownership. It may be particularly confusing to first time home buyers, but all may be caught off guard.

How property taxes work – the fiscal year in Santa Clara County

The county’s tax assessor’s office works off of a fiscal year that runs from July 1st to June 30th. The property tax bill is issued once a year, in the fall, based on the assessed value as of January 1st of that year. It may be paid twice, once in late fall (due Nov 1, delinquent after Dec 10), and once more a few months later, into the new year (due Feb. 1, delinquent after April 10th (not the 15th, the Federal Income Tax deadline to file and pay, which confuses people).
Please note the long lag time between when the property is assessed and when the real estate taxes may be due. Your home could be assessed on January 1 2018, but the second installment of the tax bill for that assessment is not required to be paid until April 10th 2019.  Now overlay the long lag time on top of home buying and selling in our pricey San Jose area with our equally high real estate taxes for new home owners and you begin to see where trouble may be brewing.

Property taxes prorated at the close of escrow

 Whenever you close escrow, there will be a property tax amount due for the current installment which the home buyer needs to pay at the time of closing. If the seller has already paid that installment (which will be a lower rate than the new home buyer’s rate most years), the buyer must reimburse the seller for all the days after close of escrow for that billing period for which the seller has already paid. If someone closes escrow on June 28, it would be a very small amount, since the tax year begins again on July 1st. If it is at the beginning of the billing period, it would be larger. If it is early in the payment cycle, say, January 10th, and the bill has not yet been paid, there will be a more significant tax bill due to the county, of course, since it is more months being covered. Whether paying the county directly or reimbursing the seller, the payment for the current installment will be made in escrow and will be a part of the closing costs.
Now let’s get into the nuances of it.  If you, the Silicon Valley home buyer, are better prepared, you won’t face a financial surprise later.

Your new property tax rate will be due, but won’t be charged for months after closing

 As I mentioned, the rate that you as a home buyer pays at close of escrow is the seller’s current installment, which is based on a January 1st assessment of the property either the same year (1st installment) or the year before (2nd installment).  If the sellers bought their home 30 years ago, the tax rate charged at closing will be super low. If they bought it 1 year ago, it will be far higher. Either way, it is the old rate – not the buyer’s new rate.
Real property, or real estate, is reassessed when a house or condo is bought or sold.  The new property tax rate will be approximately 1.25% of the purchase price initially. After that, the assessed rate goes up a max of 2% per year. In other words, the property tax which will be due from the date of ownership forward will be based on the sale price, not the current seller’s tax bill.  However, at the time of closing, buyers are not charged their new or real rate. They are charged the seller’s rate, which is lower than the true new rate the buyer will owe. It’s not a gift that you pay less at closing – no such luck! The government will ask for the balance later (usually as soon as the buyer forgets about the taxes that will be due).

Concretely, on a $1,000,000 purchase, that means $12,500 per year, or a little more than $1,000 per month ($1041.67) for property tax will be due in reality, no matter what amount someone buying the property paid at closing. Perhaps the seller’s rate was  $600 per year, and that’s what you are charged at close of escrow. The rest will be due later, when the county catches up.

Supplemental taxes are sometimes called escaped taxes.  This is what will be due when the county catches up to what is truly owed. A few months after close of escrow, another tax bill comes, this time for supplemental taxes due.  The new home owner may already have paid the 2nd installment when the bill for supplemental property taxes arrives in the mail and find the bill very confusing. “How could I owe more? I paid in escrow AND I paid the next bill – early!”  But in fact this is money that the county should have collected upfront, were it more organized.  (We are in Silicon Valley. How can the county not automatically compute the tax due at closing and simply bill people correctly from the beginning? How complicated could that be?)
Also note that if you have an impound account for your mortgage and taxes, you may need to still pay the supplemental tax bill directly. Check with the holder of your impound account on how to handle that.

How to plan for the supplemental property tax bill

When reviewing closing costs for purchasing a new townhouse, condo, or single family home, the actual property tax rate is not covered – it is a hidden cost. It is not due right at closing, so it’s fair to only calculate what must be paid as of closing. But somewhere in the margins, it would be good to know the amount of the bill that will be coming in 3 to 6 months, before that money is spent on new curtains and furnishings for the home or some other worthy cause.  Home buyers can calculate this by making use of the county’s supplemental property tax calculator on the assessor’s website. Or ask the escrow officer to help compute the amount that will be due so there will be no surprise. Put it in your monthly calendar that “X amount” will be due until the bill comes and you’ve paid it.


See also:

When are Silicon Valley property taxes due?

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Los Gatos neighborhood videos

As readers of this site may know, I host a number of Silicon Valley area blogs, including one called Live in Los Gatos.  Over time, I created Los Gatos neighborhood videos to showcase many of the communities within the town.  A collection of the Los Gatos neighborhood drive throughs and pans can be found on my YouTube channel, or you can enjoy them here.

Los Gatos neighborhood videos - Mary Pope-Handy YouTube Channel

Featured Los Gatos neighborhood videos include single family homes right now, but the plan is to expand the list to offer drive throughs to popular townhome communities such as Rinconada Hills, Charter Oaks, Los Gatos Village and more.  For many more neighborhood profiles, see the LiveInLosGatosBlog.com.

  • Glenridge and Bachman Park
  • Ohlone Court (newer neighborhood near Vasona Lake County Park)
  • Heritage Grove (newer Summerhill development in east Los Gatos)
  • Belwood of Los Gatos, Belgatos, and Surmont areas plus Alerche and Harwood
  • Almond Grove (historic district)
  • Blossom Manor
  • Fairview Plaza (historic district)
  • Saratoga Highlands, Rio Rinconada, Granada Way area & La Rinconada Park neighborhood (west Los Gatos)
  • Hillbrook Drive neighborhood
  • Vista del Monte neighborhood
  • Surrey Farm
  • El Gato, Loma Vista and Linda Neighborhood of Los Gatos
  • Alta Vista neighborhood slideshow

Wondering what Los Gatos neighborhoods are like?  Sit back and enjoy the tour!


My Valley of Heart’s Delight blog features neighborhood profiles and real estate market reports for Los Gatos, the Almaden Valley area of San Jose, the Cambrian Park area of San Jose, plus some in Saratoga and various other parts of Santa Clara Valley / Silicon Valley.  My hope is to create a library of neighborhood profiles with videos, photos, maps, and unique information that you won’t find anywhere else. At some point I hope to finish my Los Gatos neighborhood videos, and at that point begin to include other nearby communities as well.

Related Reading:

Los Gatos real estate market trends

Loma Vista, El Gato, Rancho Padre subdivisions


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The Role of the Internet

Mollie Wasserman's internet warningGiven the revolution in technology that we’ve experienced over the last few years we must look  at what technology can  and  cannot do.  This  differentiation is especially crucial when dealing with real estate, an  environment where online companies clutter the bandwidth and your inbox with schemes to save incredible amounts of money and time by using their services.

Now  let’s  be  clear: technology, and specifically the internet, is a wonderful thing! Technology is a fabulous way  to  gather data and can do  functionary tasks  better, faster and cheaper than any  human being ever could. But the danger does  not lie  in understanding that technol- ogy.  The  danger is that by  itself,  the internet can never provide the fiduciary counsel required in services such as mortgage lending, law and real estate.

Functionary, fiduciary—why do  we keep  using these “f” words? Simply, it’s very important to  understand the difference between the data that you  can  get online and the advice, counsel and interpretation of that data that only your  Realtor®  can  provide if you’re  to get the best deal  when you  sell a home.

Information Versus Knowledge

As web-savvy Realtors® who generate a significant portion of our business online, we are big believers in the free  flow  of information. You will  find that both online and off, this new breed of Realtor®  usually provides the most complete sources of  information that you’ll find anywhere.

Yet,  we  have had many of  our  colleagues question why  we give  out so much information, often saying: “If you  give out too  much information, people will have no reason to call you.” We  disagree. Although we  give  out information freely,  we  have never had a shortage of requests to retain our  services for Silicon Valley real estate sales. That’s because there’s a big difference between information and knowledge. Read more ›

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