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.

First, some data from Altos Research, with data based on listings (not solds) by zip code.

Los Gatos 95030: schools and downtown proximity

The chart at the right represents 95030 in Los Gatos (not Monte Sereno). 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:

Altos Research Weekly Report for Los Gatos 95030

This part of Los Gatos has the Los Gatos Union School District and features locations closer to downtown Los Gatos than 95032 or 95033 (the Los Gatos Mountains area). For that reason, it’s a little pricier than other parts of town. With the higher prices come a bit slower of a real estate market, so here Altos says that it’s a market only slightly in the seller’s favor.

The hottest segment of this zip code is the 3rd (from the top) pricing tier, homes listing at about 2.8 million or so.

Los Gatos 95032: schools and commute

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 than Westmont or Leigh High (in the Campbell Union High School District), so that part of 95032 will sell for a bit more.

Altos Research Weekly Report for Los Gatos 9503032

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.

The 95032 zip code used to sell for a significant amount less than 95030 (especially if there’s a jump from non LG schools to “the schools”). But please notice that the median list price for 95030 and 95032 are not terribly far apart: less than 5% at the moment. Years ago, it was common to see a 10-20% delta between the two. 

What’s changed? The schools in Campbell and in Cambrian have been improving dramatically over the last 20 or 30 years. Highly educated home buyers who were priced out of Los Gatos schools opted for Union or Campbell, and as they moved in, the schools improved.

The chart above indicates a less than 5% price difference, but please note that the climate is a much stronger seller’s market. Why? Affordability. I believe that there’s a threshold somewhere between $1 mil and $1.5 at which many buyers just cannot cope, so they move to Almaden, Blossom Valley, Cambrian, Willow Glen or other more affordable areas, like the Santa Cruz or Los Gatos Mountains, 95033.

Los Gatos 95033: mountains, schools, and affordability

The Los Gatos Mountains area of 95033 enjoys great schools, clean mountain area, 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.

This area also enjoys a slight seller’s advantage right now. Most of the time, homes in 95033 have much longer days on market than homes in 95030 & 95032. Right now, though, it’s moving better than 95030 overall – probably because of the extremely high average list or sale price. It might be that if you compared homes listed between 1 and 2 million in these 3 zip codes, the marketability would look different.

Altos Research Weekly Report for Los Gatos 950303

Inventory of homes for sale in town, 95030 and 95032

The data below was pulled by me on January 1st, 2019. I was surprised that inventory in Los Gatos 95030 & 95032 was lower than on the same date in 2018, since for the county 2019 is higher than  2018.  Tight inventory generally bodes well for home sellers.

General comments on the Los Gatos housing market

Right now we are early in the new year, which tends to have the lowest prices and the least amount of market activity of the year. Normally it picks up after the Super Bowl (Feb 3rd this year) or around Valentine’s Day (Feb 14th), so please be sure to check back in a month or so to see what’s happening.

Months of inventory by price point and high school district

Please see my article on the Live in Los Gatos blog, updated every 2-3 months, on the months of inventory or absorption rate by price point and high school district for Los Gatos 95030 and 95032

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).

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.

 

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.

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 July 19, 2019
Median List Price:$3,537,962Average List Price:$4,242,243
Total Inventory:31Price per Square Foot:$1,080
Average Home Size:3,797Median Lot Size:37,951
Average # Beds:4.31Average # Baths:3.94
Homes Absorbed:3Newly Listed:4
Days on Market:84Average Age:51

90-day stats for Condo properties in
LOS GATOS, CA 95030 as of July 19, 2019
Median List Price:$1,548,885Average List Price:$1,587,756
Total Inventory:2Price per Square Foot:$794
Average Home Size:1,840Median Lot Size:n/a
Average # Beds:2.79Average # Baths:2.45
Homes Absorbed:0Newly Listed:0
Days on Market:14Average Age:47

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 July 19, 2019
Median List Price:$2,505,731Average List Price:$3,318,543
Total Inventory:41Price per Square Foot:$888
Average Home Size:2,870Median Lot Size:12,246
Average # Beds:4.11Average # Baths:3.38
Homes Absorbed:6Newly Listed:6
Days on Market:78Average Age:46

90-day stats for Condo properties in
LOS GATOS, CA 95032 as of July 19, 2019
Median List Price:$1,276,731Average List Price:$1,225,758
Total Inventory:13Price per Square Foot:$745
Average Home Size:1,685Median Lot Size:n/a
Average # Beds:2.76Average # Baths:2.33
Homes Absorbed:2Newly Listed:3
Days on Market:28Average Age:39

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 July 19, 2019
Median List Price:$1,617,577Average List Price:$1,949,873
Total Inventory:42Price per Square Foot:$593
Average Home Size:2,927Median Lot Size:130,768
Average # Beds:3.87Average # Baths:3.17
Homes Absorbed:3Newly Listed:4
Days on Market:88Average Age:40

 

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.

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