As everyone knows, real estate is highly localized, so within a relatively small geographical area there may be both fast moving, lower-priced sub-markets with multiple offers and nearby, more expensive communities where sales are still relatively slow and inventory is growing seasonally. 

That’s the case in Silicon Valley, where there is rapid absorption of REO eating up available inventory in some sub-markets.  Click>here for a spreadsheet showing total pending and available single family inventory by MLS Market Area and the proportions of those totals that are “distressed properties” (either short sales or REO).

For example, Alum Rock (area 4) and South San Jose (area 11) have 440 homes and 304 homes pending respectively, but 86% and 88% of all homes in these areas are short sales or REO!  These are definitely “distressed” or “impacted” sub-markets.

In contrast, Los Gatos/Monte Sereno (area 16), Saratoga (area 17), Los Gatos Mountains (area 23) and Los Altos Hills (areas 221) have relatively low proportion of pending sales vs. total inventory, so are “slower selling” sub-markets.  However, they also have a very low proportion of REO or short sales and are not considered “distressed”.  Prices are soft from lagging demand in the upper price points.

Palo Alto (areas 230-240), Los Altos (areas 211-214), Mountain View (areas 200-210), Cupertino (area 18) and Almaden (area 13) have both a very strong absorption rates and very low rates of foreclosures.  These are some of the strongest sub-markets in Silicon Valley.  With that said, buyers are still quite price conscious and will not overpay; specific school scores may also determine if a property sells quickly or not.

Cambrian (area 15), Campbell (area 14), Sunnyvale (area 19) and Santa Clara (area 8) have higher proportions of foreclosures, but also good absorption.  These areas are experiencing brisk sales activity, sometimes with multiple offers.  Some buyers think they can “low-ball” prices only to find that others have bid over list price.

The Wall Street Journal had an article today that noted locations around the country with bidding wars (multiple offers).   While they did not specifically mention Santa Clara County, this is a spotty local phenomenum here too.

I hope this information “from the front lines” helps flesh out and adds understanding to broader scope articles such as in the Silicon Valley Business Journal which is based on historical Dataquick statistics.