Buyers Market: As the chart above shows, according to Altos Research, Saratoga CA has been a “buyers market” since late 2007.  This means that the rate at which homes are being absorbed (sold) is relatively slow compared with total available inventory.  This market condition is more the case in the upper price range, but there was a good price distribution of Saratoga home sales during 2010 as the detail below shows.  There was actually a hot market for homes within the Saratoga school district in the $1.3-1.5 million price ranges during the Spring, 2010.

Sales Volume: There were 287 homes sold in Saratoga, CA during 2010.  Note: this includes only those homes listed on the Multiple Listing Service and there were a few properties sold, but not listed.  This volume  is up from 2009 and 2008, but lower that previous years prior to the national recession.  The average and median price of Saratoga homes sold during 2010 was actually higher than in 2004.

Price Range: Prices of detached homes actually sold (closed escrow) in 2010 ranged in price from $5.6 million to $456,000.

Inventory : At the start of 2011 there were only 68 detached homes and 8 attached homes listed on the Multiple Listing Service in Saratoga, CA.  This is expected in increase seasonally this Spring.

Distressed Sales: There were only 20 detached homes sold through the MLS that were distressed (Real Estate Owner or Short Sales) – this represents less than 8% of the market!

Days on Market: Many overpriced homes have been on the market quite a while, but for those properties that actually sold (closed escrow) the DOM in 2010 was a reasonable 66 days.

Here is the detail for 2010 detached homes sales (closed escrow) in Saratoga, CA:

Here is the detail for attached homes sold (closed escrow) in Saratoga, CA:

Rick Bonetti | APR Referral Network | 408-8800 | DRE #01237009

The recession may not be over, but there are definitely more buyers out there in the west valley communities of Saratoga, Monte Sereno and Los Gatos.  Inventory is also very low, so it is a good time to be a home seller.

Rick Bonetti | Alain Pinel Realtors | 408-857-8800

Because of seasonally low inventory, home sales in Saratoga, CA are brisk in the under $2 million range if they are well priced.  One year ago inventory of single family homes was 167 – today it is only 106 homes available.  Pending sales increased from 17 last year to 41 at present, with frequent multiple offers for moderately sized family homes in the Saratoga school district.

There were 13 sales in the past week!:
21955 Via Regina – $3,250,000
19404 Sobey Rd. – $2,250,000
15142 Sobey Rd. – $2,195,000
18806 Harleigh Dr. – $1,850,000
14664 Bougainvillea Ct. – $1,849,000
16325 Sanborn Dr. – $1,610,250
19620 Scotland Dr. – $1,598,000
13132 Glen Brae Dr. – $1,595,000
19375 Portos Ct. – $1,498,000
13705 Howen Dr. – $1,398,000
12568 Northampton Ct. – $1,299,000
19935 Sea Gull Wy. – $1,200,000
18570 Aspesi Dr. – $899,000

Rick Bonetti | Alain Pinel Realtors | Saratoga, CA  |408-857-8800

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Rick Bonetti | Alain Pinel Realtors | Saratoga, CA | 408-857-8800

Inventory of homes for sale in Saratoga, CA 95070 is climbing, but is still a low 86 detached and 11 attached homes.  Last week 21 detached homes were added to the inventory including 3 homes where unfortunately the transaction fell through (TFT).  Four attached homes were added to the market of available homes for sale in Saratoga.

There were 6 new pending detached sales in Saratoga (including one high priced home on Cuvilly that went into contract last year) and 1 attached home.

Only one detached home on Kosich Ct. closed escrow at $1,160,000.

Go to my website www.RickBonetti.com for detailed information.

Rick Bonetti | Alain Pinel Realtors | 408-857-8800 | DRE # 01237009

Other sustainable suggestions from McLennan:

1. “If people have more money and are looking for a new place to live, the compelling message should not be to move into a larger home, but rather to invest in quality and design and to downsize or ‘rightsize’ based on your family size.
2. “Working at home drastically reduces green house gas emissions as transportation impacts are avoided. Additional square footage can be justified if people are working at home a significant amount of time. In these cases, I would propose a maximum 200 square feet bonus allowance to accommodate telecommuting for each working adult.”
3. “The square-foot-per-person metric lessens as more people join a household. (Sharing is also green.) So house size shrinks from 600 square feet per person down to 450 square feet per person as an overall average.”

Last week I reported the avalanche of positive market response to a Saratoga listing Moe Baniani and I have on Wolcot Way and how the Cupertino market is hot.  Today,  in an email to our Alain Pinel office, Alexis Lake, a new agent, gives more evidence as she reports her experience selling her personal home in Saratoga this past week vs. last fall:

“We just sold our house on Obrad in Saratoga with multiple offers to a highly qualified buyer who I’m very confident will perform. We had our Obrad house on the market 4 months ago for a short while and then withdrew it. The market certainly has shifted since September and a compelling statistic that supports this shift is the click thrus on the tour factory virtual tour.”

“In September, it felt like buyers were on Quaaludes, moving very slowly, with absolutely no sense of urgency. Worse, when they finally got in contract, I saw several transactions end up TFTing. (Slow and nervous)”

“Now, it is like buyers are on speed, have all their ducks in a row and are not only motivated and ready, but very likely to perform. (Fast and furious)”

“Take a look at these # of views from Tour Factory for the first 5 days on the market for 12320 Obrad Drive:

NOW                             THEN
1/25/10   1734     9/15/09     27
1/26/10  1,720    9/16/09    673
1/27/10     973     9/17/09    492
1/28/10     837     9/18/09    549
1/29/10     373     9/19/09    517
TOTAL    5,657                      2,258

“250% more views this time around – with the skew of the views towards the listing date vs. a somewhat even distribution of views in September.  Not sure how long this window of opportunity will last, but it sure looks like a good time to sell.”

Here is additional information from Alain Pinel agents Mark Wong and Carol Li:

Palo Alto

• “12 offers received Thursday on 3499 Greer Road. 4beds/2baths, 1,659sf, 8,591sf lot, original condition, Eichler house, listed at $969,000, sold over $1M.”
• Approx. 14 offers received Thursday on 842 Sycamore with 3beds/2baths,1363sf, listed at $949,000. Offers had no contingencies, as is, some with all cash offers.

Cupertino

• 1145 Hunterston Place with 3 bd 2ba, 1,190 sq ft in 6,400 sq ft lot listed at $918,000. With one open house attracted 17 offers and sold for $985,000. The buyers came in with NO contingencies and in AS-IS condition. Several were ALL CASH buyers.

“For the last 28 months, no property in Cupertino was sold over 2.6 million. Yes, there were quite a number of properties listed more than that and ended up with no sale and off the market. Suddenly there were 2 sales over 3 million in the last month. My take is that there are buyers (all cash) out there really see this once-a-lifetime opportunity to buy.”

“The climate in the high-end market, at least in Cupertino, is moving from a dormant to the active territory.The market has already hit the bottom, buyers are out trying to catch the last train. US dollar is still very weak. Oversea investors love bottom fishing and consider real estate in the United States very ‘cheap’.”

West San Jose

• “1212 Lynbrook Way was on the market for 6 days and attracted 21 offers. It is a 3/2 ranch house with 1,599 sq ft of living space. It was listed for $968,000 and sold with NO contingencies in AS-IS condition, about $100,000 over the listing price.”

“West San Jose 95129 with top Cupertino schools used to be the second choice for home buyers versus real Cupertino address 95014 with Monta Vista High. Not anymore…”

Foster City

• “Approx. 4+ offers received yesterday on 1121 Catamaran listed at $888,000,  4/2, 1900sf. It was on the market for about a week only.

East Palo Alto

• “5+ offers received on 128 Abelia way listed at $232,000. Those properties were sold at over $600K two years ago. Buyers are the investors and first time buyers.”

For more up to date reports from the “home front” subscribe to SaratogaVoice blog or call me to find out how these trends apply to your individual situation.

Rick Bonetti | Alain Pinel Realtors | 408-857-8800 | DRE # 01237009

The question if get asked most frequently is “How’s the real estate market?”  It used to be that everyone read the newspapers and got their somewhat distorted news from the headlines; now people get their news online and from multiple sources.

I hope I have earned the right for you to turn to SaratogaVoice.com when you want a balanced perspective on what’ss really happening in homes for sale in Silicon Valley, particularly in the west valley communities of Saratoga, Los Gatos, Monte Sereno, Campbell and surrounding San Jose.

I could tell you about the 100 shopper groups we had at a Saratoga open house in the Golden Triangle the weekend before last and the multiple offers we had.  I could also point to the positive news today about the consumer confidence or that Case-Schiller says that home prices are rising in 14 metropolitan areas.  But, I also need to tell you that because real estate is so localized and fragmented that one cannot truly speak accurately in generalities about what the market is doing – every neighborhood is different.

Let me start by writing about the economic environment we still find ourselves in (the good and the bad) and make some predictions for their impact on real estate in Silicon Valley in 2010:

•    The Economy – we are technically out of a recession with 2 quarters of positive GNP growth and into a mild and slow recovery, but as we all know, unemployment is still high, which will continue to be a problem throughout 2010.  The economy is still fragile.
•    The stock market, which had phenomenal recovery during 2009 will have a 10% adjustment in value early in 2010 before it rebounds to 11,000.
•    Corporate Profits are up due to downsizing.
•    Unemployment is actually worse than the numbers indicate, because many jobs lost will not be replaced, due to globalization. It will take longer for those unemployed to find work ant those that do find jobs will likely be at income levels 20% below what they were making before.
•   Mortgage rates are very low and expected to remain relatively stable in 2010 with a slight uptick of ½-1%.  There is a current window of opportunity now!
•   Retail Sales have recently been good at both ends of the spectrum (Walmart to Nordstrom).
•  Corporate capital outlays for equipment have been positive.
•    The Federal deficit will drag down recovery, with $500 billion/year interest on our debt.
•   The value of the dollar has declined precipitously in the last three years as the Fed has not supported it, but printed money instead.
•    Commodity values are up relative to the declining dollar.
•    Politics – 2010 will be a watershed year politically with an ugly battle between those in favor of unrestrained free market capitalism and those seeking more security of a “hybrid” government- controlled economy.  Uncertainty will limit risky business investments until corporations know the rules of the game.
•    Real Estate will be very different than the old model of the past.  It is now very fragmented – in terms of the players, market dynamics and geographic diversity.
•    Sellers now include more banks, distressed situations and investors as well as traditional sellers.
•    Buyers in some areas now include investment funds, foreign investors as well as traditional family buyers.
•    Real Estate Investors – will continue to be important part of the market in the low end because rental properties actually cash flow positive as well as have future appreciation potential.
•    Appraisals will continue to be a problem, even if there are multiple offers.  Buyers will have to come up with more cash if properties do not appraise due to 90 day past history, and some home sales will not stick.
•    Residential financing, although improving in 2010, will continue to be a big issue in getting deals closed.  A niche market opportunity will be for astute buyers to closely follow homes with pending sales, whose deal does not hold together through the initial contingency period.
•   Refinancing will be problematic for owners who have 5 year ARM’s coming due in neighborhoods where values have dropped.  This will cause a shift from owner-occupied to renter-occupied in some neighborhoods where owners have not choice but to default on their loan, but do not want to leave the neighborhood because of schools.
•   Banks – have dominion over many lower priced submarkets, now controlling both release of inventory they own and terms for buyers.
•   REO - purchases from banks will be influenced in 2010 by bulk sales to big investment funds from the east coast.
•    Commercial real estate – will be different too with vacancies going up and rents going down.  As much as 20% of apartments will go into default in 2010 too.  Funds, as buyers of groups of buildings will be a greater influence in 2010.
•   The low end of the home market will continue to see a firming up of prices as REO inventory is sold to multiple bidders.
. The middle residential market, up to $1.5 million in Silicon Valley, will be a sleeper market that comes alive in 2010, but buyers will still be looking for value, so sellers must be flexible to make a deal.
•    The higher-value residential market, from $2-5 million will still suffer as prices continue to erode 5-15%.  Inability of upper end buyers to get loans as well as sparse 2010 corporate bonuses will put many buyers on hold.
•    The ultra luxury residential market, above $5 million will have more sellers than buyers, who will not make such a discretionary purchase unless the property is rare or exactly what they want.
•    Home values – for luxury Silicon Valley homes purchased at the 2006 peak will soften to 2002-2003 levels and in some cases to their1997-98 level.

If you really want to know about what’s happening in real estate in the specific neighborhoods you are interested in, send me an email and I will let you know what I think.

Rick Bonetti | Alain Pinel Realtors | 408-857-8800 | DRE #01237009

Last week there was very light trading in the bond markets and mortgage rates didn’t move much although we did see a little improvement last Friday.

Current rates for 30 year fixed rate, fully amortized mortgage loans according to John Shapiro of Private Mortgage Advisors are as follows:

Conforming loans ($417K and under):  5.125%
High Balance conforming  ($417K to $729,750): 5.25%
Non-conforming jumbo loans (greater than $729,750):  5.70%

Interest rates are now quite low and home prices in many west valley neighborhoods such as Saratoga, Los Gatos and Monte Sereno are expected to be relatively flat in the near future, so I believe now is a good time to be either a homebuyer and home seller.

Rick Bonetti | APR Referral Network | 408-857-8800 | DRE #01237009