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 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).

The market in Los Gatos is showing a mild slowdown in the months of inventory when viewed against the spring market. It is not dramatic, though, for the town as a whole.

Los Gatos 95030 and 95032

From June:

Los Gatos 95030 95032 months of inventory June 20 2018

And from April:

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:
http://liveinlosgatosblog.com/los-gatos-real-estate-market-trends-by-price-point-and-high-school-district/

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.)

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 notable shortage of inventory. All of Santa Clara County is in the same boat, having extremely low inventory of homes for sale. Inventory IS rising, but it is making a bigger splash in the news than I feel is warranted, if you consider any kind of historical context beyond 2017, which was an aberration.

Have a look:

 

Inventory now is lower than in June or July.  Now look at other years – 2017 was off the charts over heated, as we know.  Today’s numbers are a little lower than 2016 and a little higher than 2014. The October average between 2012 and 2017 is 75.33. To me, this looks like it’s within the range of “seasonally normal” for recent years.

How about a little more historical info? Let’s consider the inventory for October in all of the years from 2001 to the present, since the MLS won’t let me dig back further than that:

Inventory of single family homes for sale in October of the following years:

2001 – 154
2002 – 167
2003 – 99
2004 – 122
2005 – 110
2006 – 158
2007 –  117
2008 – 198
2009 – 169
2010 – 190
2011 – 133
2012 – 102
2013 – 102
2014 – 66
2015 – 61
2016 – 76
2017 – 45
2018 – 70

It is true that in general, inventory of available homes has been shrinking in Silicon Valley since 2000 or so, and perhaps the shrinking inventory in Los Gatos has warped our collective sense of what is normal.  Having 80 to 100 homes for sale is not a crazy deep buyer’s market here.

Fewer sales: what does it mean?

A few years back, when prices were rising rapidly throughout Santa Clara County, a Realtor commented that “smaller numbers of buyers are propping up the values“. That stuck with me and is a true assessment of what happens as people either get buyer fatigue or get priced out of the market. It only takes one buyer capable and willing to pay a high price to create a new high price in a community. When you have it happening consistently, even if it’s a small pool of buyers willing to pay the high prices, collectively, those determined buyers bring values up.

Not everyone can or will pay to own, though, and the rental prices here are actually a good deal compared to the purchase prices.  Looked at the other way, if you wanted to buy a property to rent it out, you could not break even (between the costs and income) with 30% down, which is a fair number to use for investors across the country. Here, in the greater San Jose and Los Gatos area, you’d need 45% down, or possibly 50%, to break even each month. (People who buy investment properties do it either for cash flow or for appreciation. Here, cash flow isn’t good, but appreciation normally is good.)

Other aspects of low inventory (that don’t make the news):

Low inventory means fewer 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 whose paychecks come from commissions on these sales. For some Realtors, the loss of sales volume is partially offset by rising prices, if they are among those 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. 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

90-day stats for Single Family properties in
LOS GATOS, CA 95030 as of December 7, 2018
Median List Price:$3,095,000Average List Price:$3,788,953
Total Inventory:33Price per Square Foot:$982
Average Home Size:3,372Median Lot Size:19,592
Average # Beds:4.21Average # Baths:3.99
Homes Absorbed:3Newly Listed:2
Days on Market:164Average Age:50

90-day stats for Condo properties in
LOS GATOS, CA 95030 as of December 7, 2018
Median List Price:$1,376,056Average List Price:$1,376,056
Total Inventory:2Price per Square Foot:$758
Average Home Size:1,827Median Lot Size:n/a
Average # Beds:2.83Average # Baths:2.83
Homes Absorbed:0Newly Listed:0
Days on Market:12Average 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 December 7, 2018
Median List Price:$2,510,069Average List Price:$3,134,451
Total Inventory:35Price per Square Foot:$938
Average Home Size:2,818Median Lot Size:10,634
Average # Beds:4.11Average # Baths:3.47
Homes Absorbed:6Newly Listed:5
Days on Market:67Average Age:43

90-day stats for Condo properties in
LOS GATOS, CA 95032 as of December 7, 2018
Median List Price:$985,546Average List Price:$1,003,945
Total Inventory:14Price per Square Foot:$694
Average Home Size:1,211Median Lot Size:n/a
Average # Beds:2.47Average # Baths:2.33
Homes Absorbed:2Newly Listed:1
Days on Market:53Average Age:43

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 December 7, 2018
Median List Price:$1,309,577Average List Price:$1,468,507
Total Inventory:51Price per Square Foot:$526
Average Home Size:2,477Median Lot Size:105,554
Average # Beds:3.38Average # Baths:2.68
Homes Absorbed:5Newly Listed:4
Days on Market:110Average Age:42

 

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.

Tagged with: , , , ,