The Los Gatos real estate market trends are cooling a little after a hot summer market, affected by seasonal trends and the prolonged shelter in place order with limitations on the real estate market.
As of this writing, November 17th, open houses seem unlikely to return this year, but all listed properties may be shown by appointment only and following certain restrictions such as limiting showings to only one agent and two buyers from the same household at a time. The market statistics are also showing an unusual market impacted by the many changes over the last few months. The Shelter in Place order kicked in here on March 18th for the general population and March 17th for those over 65 or with chronic health conditions and, while real estate has adjusted to the “new normal” since then, there are likely going the be more changes in store for us over the next few months.
To see more on the coronavirus impact on real estate sales, please follow the link to the Valley of Heart’s Delight blog.
In general, though, the market did OK in March, but sales really slowed through spring in most of the South Bay. Markets started to heat up again through summer as restrictions eased. The current status is that not as many homeowners are selling compared to past years while demand from buyers is as hot as ever.
As always, the homes selling fastest are in “turnkey” condition, have no location issues, and are priced a little low or right at the perceived market value, and not aiming too high on the list price. That is true in all markets locally.
First, some data from Altos Research, with data based on currently listed properties (not sold homes) by zip code. This will automatically update each week.
Los Gatos real estate market trends in 95030: schools and downtown proximity
The chart above represents 95030 in Los Gatos (only, not Monte Sereno). Right now this chart shows that for Los Gatos homes in the 95030 zip code days on market are rising slightly, inventory has had some surprising growth, the market action has recently plummeted, and it remains a slight seller’s market.
If you’d like to see the FULL weekly report, use the following link and save it, as it will be updated automatically every 7 days:
This part of Los Gatos has the Los Gatos Union School District and features locations closer to downtown Los Gatos than 95032 or most of 95033 (the Los Gatos Mountains area). For that reason, it’s a little pricier than other parts of town. With the higher prices comes a bit slower of a real estate market, so a milder market is not out of the ordinary.
Los Gatos real estate market trends 95032: schools and commute
The chart above represents 95032 based on list prices, not sold. The prices are a little lower in this Los Gatos market, though it’s presenting as a strong seller’s market with much faster turnover compared to 95030.
The 95032 zip code in Los Gatos is more complicated than 95030 for a few reasons. First, part of it is in the Los Gatos Union School District, part is in the Campbell Union School District (west Los Gatos near the Saratoga and Campbell borders), and part is in the Union School District (shared with the Cambrian zip code of 95124 in San Jose). All are good to great schools at the elementary and middle school level. At the high school level, Los Gatos High will have a little more draw due to stronger scores than Westmont or Leigh High (in the Campbell Union High School District), so that part of 95032 will sell for a bit more.
Check out the Altos Research Weekly Report for Los Gatos 9503032 for more.
Additionally, since west Los Gatos is closer to Cupertino and Apple, and other high tech employment centers, that side of 95032 will sell for a little more than east Los Gatos – though that could change with the new Google complex in downtown San Jose.
Inventory & Sales for Los Gatos 95030 and 95032 (MLS Area 16)
Below you will find a chart of the history of the Los Gatos inventory & sales of single family homes from the last 12 months to the present. From this chart, the activity doesn’t really look too bad, but look at how the seasonal trends have shifted in sales. After March, sales shrink for two months – usually spring is when we see the most growth in this sector! That spike was delayed and in summer we see a rapid incline like we would have expected much earlier in the year. Coming into fall, both sales and active listings appear to be dropping off again.
Back in March, I tracked the very first stages of the pandemic response on the Los Gatos real estate market, and I saw this:
The chart above shows numbers pulled from the MLS showing listings going sale-pending by week during March with a flag for the week that shelter-in-place was ordered. Sales had fallen off as of mid-March absolutely, but there was probably also an impact earlier than that as consumers saw the virus coming closer. It may seem surprising, then, that the numbers didn’t fall more significantly in April. While there had initially been a complete freeze on showing homes, by April vacant homes could be shown and further restrictions were lifted in May allowing for greater market activity.
Los Gatos 95033: mountains, schools, and affordability
The chart above updates regularly, displaying real-time changes in the market for Los Gatos Mountain area for 95033. Currently, it shows a slight seller’s advantage as it has for months. It’s still cooler than either 95030 or 95032.
The Los Gatos Mountains area of 95033 enjoys great schools, beautiful mountain land, and a lot more house for the money than you’ll get “in town”. (There are some challenges, so it’s a trade off.) This is mostly a county pocket, and not part of incorporated Los Gatos, though some close in areas, such as Montevina Road, are both 95033 and “in town”.
Note how much lower the median list price is (as well as the price per SF) as compared to either 95030 or 95032! When many websites aggregate home prices in Los Gatos, they include 95030, 95032, and 95033 – the last one pulling the median or average price down to artificial levels if the consumer sees it thinking it’s an “in town” price.
Most of the time, as it appears today, homes in 95033 have much longer days on market than homes in 95030 & 95032. That being said, the homes here can vary wildly and when inventory or sales are low it can throw the data. It might be that if you compared homes listed between $1 and $2 million across these three zip codes, the marketability would look different.
Sale price to list price ratio
One way of assessing the market is to check the sale price to list price ratio. In the chart below we see how 2020 picked up into March before falling through spring. In July it began to pick up again, which you can see from past years is an unusual time to trend up. From March through May it fell by 3.5%, and from June to October it’s regained 3.3%. Like September, this October has the highest ratio looking back across all years.
Sale price to list price ratio in the Los Gatos mountains 95033
There are very low numbers of sales in the mountains, so this will be the only chart for the moment.
When the other two zip codes hit their low in May, Mountain homes were selling a little better than usual. Because of the smaller number of sales and inventory in this area, however, the data usually isn’t as stable as the others. Looking back since March of this year, comparing to recent years, this market seems about par for the course. We’ll have to see how it goes through the rest the year.
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. In a normal market, 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, there will always be homes that are having trouble selling. 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 of bad comps (market comparables), such as using numbers from a hot spring market instead of the cooler summer or fall / winter market, or when things like differences in lot size or school district within a neighborhood are not considered in pricing. 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
Below are live updating charts. The first two here are the 90-Day statistics for Single Family Homes and then Condos in Los Gatos 95030.
As of the latest update (as of this writing, November), Single Family Homes in 95030 are taking over three months to sell on average. With a small number of sales, though, this data can change quickly. Condos in this zip code are selling much faster, in around two months.
The graph above shows the Median Price for condos and homes in 95030. The condo market follows a more erratic path, though both generally follow the same trends. This chart clearly shows the dip beginning in March with turnaround beginning in June and peaking in summer. Right now, prices are beginning to cool off again for single family homes as we enter autumn.
The graph above compares the same two for total inventory. While the housing market has its ups and downs, the condo market is flat-lining only a smidgen above zero.
Here’s something a little different. This graph shows the Average Days on Market. Houses in this sector clearly take a lot longer than in the valley to sell, but condos are taking a longer than usual time to sell at a little over 2 months. The housing market heated up through the middle of the year, but it’s currently moving slower than last winter.
This chart shows a bit of a surprise, and good news for buyers in the 95030 area. The Median Price per Sqft has been on a slow but steady increase for single family homes in this area for a long time, but there’s been a very clear dip in both SFH and condo price per square foot since the start of March. The condo value, however, is often all over the place.
And the last graph for this sector is the Median Market Action Index, roughly indicating how hot the market is. Again, the condo market has been more erratic, but both are close to one another and currently count as mild seller’s markets.
Altos Research: Los Gatos 95032
Below are the Altos charts covering the 95032 zip code. Again, we’ll start with the 90-day statistics.
Homes are taking less time to sell here compared to 95030, coming in a little over 2 months, but condos are taking roughly the same amount of time here as their in-town counterparts. Still, small data pools means these percentages could fluctuate quickly.
Above is the Median Price graph comparison between Condos and Single Family homes in 95032. They usually show similar trends, though this year they almost look inverted. Both condos and homes leveled off in the third quarter and have experienced some cooling since. Surprisingly, prices continued to rise through March and peaked around April – a little later than the in-town market.
The graph above shows that inventory in both houses and condos increased since the start of spring, though not to anywhere near the volume from last year. Both are cooling at the moment.
Days on market are low for both houses and condos, though condos have begun to climb again after bottoming out in June. Homes are taking a little less time to sell than they were a year ago at a little over 2 months on average.
Single family homes have been stable in the price per sqft since around May, but condos have been falling consistently since then and are close to their earlier winter low.
Lastly, the Median Market Action Index shows the housing and condo sectors switched places again around the middle of the year with single family homes currently showing an extremely high market action while condos are significantly milder. Condos saw their peak activity in March and April and it’s been falling since with single family homes still climbing.
Now we have one final Altos chart with the 90-day statistics for Los Gatos Mountains 95033:
Days on Market in this update are heating up, but still looking slower than homes in the 95030 sector by a good deal. This might look different if things were broken down by price point, however.
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.