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Silicon Valley home sales bounced back in June, as lockdown restrictions eased, bringing sellers and buyers back to the marketplace. The San Francisco Bay Area saw a moderate 3.6 percent increase in home prices and a 69.2 percent sales increase from May. Santa Clara County made a major comeback in sales volume, price, and new listings.
“The housing market is making a good recovery which will hopefully continue,” said Mary Kay Groth, president of the Silicon Valley Association of REALTORS®. “The pandemic hasn’t stopped buyers.”
Santa Clara County saw June packed with a higher sales volume and strong prices, according to data from MLSListings presented in the Aculist Monthly Market Minute report by Aculist senior product marketing manager Michelle Ronco. Ronco noted the change in sales volume illustrates the market’s recovery. Santa Clara County sales volume in May was barely half (49 percent) of the sales volume in May 2019, then rose steadily in April to 62 percent. By June, sales volume increased to about 98 percent of sales volume in June 2019.
Santa Clara County’s median home price reached $1,382,000 in June, up 1.2 percent from May’s median of $1,365,000, and up 2.4 percent from the June 2019 median of $1,350,000. Although inventory is down 33 percent year-over year, new listings have increased for two straight months, from 732 in April, to 1,045 in May, and 1,066 in June – a clear sign that sellers are returning to the market. The county’s sales-to-list price ratio in June was 101 percent, just one percent lower than a year ago.
Further highlighting the market’s rebound are places that experienced month-over-month increased median home prices. These include cities in the local REALTOR® association’s service area, like Saratoga, Los Gatos, Los Altos, Los Altos Hills, Cupertino, Santa Clara, Palo Alto, Sunnyvale, Mountain View. The cities of Los Altos Hills, Mountain View, Sunnyvale, Los Gatos, Cupertino, Saratoga, Santa Clara, San Jose also saw new listings increase from May to June.
Ronco added average days on market dropped in June – in some cases by nearly half of the previous month. In hot markets, like Cupertino, the average DOM fell from 22 days in May to 12 in June, Monte Sereno, from 75 days to 44; and Sunnyvale, 27 days to 18. This means buyers have less time to decided on a purchase due to heightened competition.
“The virtual tours and virtual open houses have appealed to buyers. Traditional open houses are still not allowed, but in-person showings by appointment and limited to just three persons at one time, including the agent, have helped clinch many deals,” said Groth. “At our association’s REALTOR® district virtual meetings, our members are reporting multiple offers are taking place on properties that are priced competitively.”
The number of California homes that sold for a million dollars or more last year rose to the highest level in six years, and Silicon Valley neighborhoods continue to rank among the highest on the list of these high-end home sales.
A report from real estate information service DataQuick indicates a total of 39,175 California homes sold for a million dollars or more last year, up 45.1 percent from 26,993 in 2012. It was the highest number sold since 42,506 in 2007, according to DataQuick.
Hillsborough, Saratoga, Menlo Park, Cupertino, Los Altos, Woodside and Los Gatos, which are located in the five districts served by members of the Silicon Valley Association of REALTORS® (SILVAR), were on the list of communities with the highest number of million-dollar home sales in the state. Hillsborough had 436 million-dollar home sales last year, with the most expensive home selling for $13.3 million; Saratoga, 332 million-dollar home sales, the most expensive purchased for $12.3 million; Menlo Park, 321 million-dollar home sales, the most expensive purchased for $5.5 million; Cupertino, 317 million-dollar home sales, the most expensive sold for $3.8 million; Los Altos, 267 million-dollar home sales, the most expensive purchased for $14.3 million; Woodside, 273 million-dollar home sales, the most expensive sold for $12 million; and Los Gatos, 243 million-dollar home sales, the most expensive sold for $4.8 million.
David Tonna, president of SILVAR, attributed the rise in high-end home sales in the region to a robust economy and rising home prices. “We are fortunate to have an economy that has made a comeback quickly, thanks to tech companies that are growing, some by leaps and bounds. The high demand for homes and lack of inventory has led to the appreciation of many homes,” explained Tonna.
Statewide, 840 homes sold for more than $5 million last year, an all-time high and up 20.3 percent from the previous high of 698 in 2012. In the $4-$5 million range a record 596 homes sold, up 29.3 percent from 2012. In the $3-$4 million range, a record 1,455 homes sold, up 31.3 percent from 2012. In the $2-$3 million range sales totaled 4,492, a record and up 37.4 percent from 2012. In the $1-$2 million range, 25,352 sold last year, up 42.5 percent from 2012.
The DataQuick report indicated the most expensive confirmed purchase in 2013 was a 15,355-square-foot, 8-bedroom, 14-bathroom beachfront Malibu mansion which sold for $74,500,000. The largest was a 25,447-square-foot, 16-bedroom, 18-bathroom mansion in Indian Wells that sold for $2,250,000.
According to the real estate information service a record 10,602 homes that sold for $1 million or more were bought with cash, up from 7,791 in 2012. Cash was used more frequently the higher up the price scale. Of those who did finance their purchase last year, the median down payment was 30 percent of the purchase price.
It is expensive to live in the heart of Silicon Valley, but buyer demand for homes, including million-dollar homes, continues to be strong. Real estate information service DataQuick lists the following Silicon Valley communities among the highest ranked areas for million-dollar homes sales in California in the second quarter.
- Hillsborough topped the list with 134 sales in 2012 Q2, up from 118 in 2011 Q2, with the most expensive home purchased for $5.28 million.
- Saratoga ranked second with 126 million-dollar homes purchased in 2012 Q2, up from 93 in 2011 Q2, with the most expensive of purchased at $5.35 million.
- Cupertino ranked fifth (after Manhattan Beach and Newport Beach in Southern California) with 105 million-dollar homes sold in 2012 Q2, up from 88 in 2011 Q2, with the most expensive home purchased for $2.45 million.
- Los Altos ranked sixth after Cupertino with 102 million-dollar home sales in 2012 Q2. The most expensive home was purchased for $6 million. Los Altos had 81 million-dollar home sales in 2011 Q2.
- In Los Gatos, the most expensive home purchased cost $4.66 million. There were 67 million-dollar homes purchased in the zip code of 95032, up from 44 in 2011 Q2. In the Los Gatos zip code of 95030, 62 million-dollar homes were purchased last quarter, up from 31 in the second-quarter last year.
Despite the hype over Facebook’s IPO, Menlo Park and Palo Alto made the list, but had fewer million-dollar home sales in second-quarter 2012 than the same time last year, according to DataQuick. Menlo Park had 100 million-dollar homes sold in second-quarter 2012, down from 124 last year, with the most expensive home purchased for $4.8 million. Palo Alto had 62 million-dollar homes sold, down from 69 in 2011 Q2, with the most expensive home purchased for $3.15 million.
Silicon Valley Association of REALTORS® (SILVAR) president Suzanne Yost, who is an associate broker with Alain Pinel Realtors in Los Gatos, is not surprised that many of the communities located within SILVAR’s five districts made the list. “Silicon Valley’s economy is healthy compared with other parts of the state because it is the heart of innovation, with many successful tech companies,” said Yost.
Yost added, “Our members have reported a surge of foreign buyers. They are attracted to the region’s weather, diversity, excellent schools, good mix and proximity to shopping, entertainment, the arts and services. We’re not that far from San Francisco, close to the freeways and airports. Buyers know they can’t go wrong and they are willing to pay the price for these amenities.”
SILVAR has five member districts, allowing members to work closely with their communities. They are the Menlo Park/Atherton District (including Portola Valley, Woodside and East Palo Alto), Palo Alto District, Los Altos/Mountain View District (including Los Altos Hills), Cupertino/Sunnyvale District and the Los Gatos/Saratoga District (including Monte Sereno).
More than 140 golfers enjoyed a beautiful Monday on the golf course at Cinnabar Hills Golf Club in San Jose and even raised over $5,000 doing it at the Los Gatos/Saratoga District Charity Golf Tournament.
The District would like to thank the generous sponsors for a very successful event:
Lunch Sponsor: Thrasher Termite & Pest Control – Janet Thrasher
Appetizer Sponsor: First American Home Buyers Protection Corporation
Beverage Cart Sponsors: Tour Factory Bay Area, Darrell Monda, and State Farm Insurance Agents Yvonne Kendall and Laura Peterson
Hole Sponsors: Alain Pinel Realtors (Los Gatos), American Home Shield, Cort Furniture Rental, JCP/LGS Disclosures, Law Offices of Peter N. Brewer, Princeton Capital, Property I.D., and Von Kaenel Real Estate
Tee Bag Sponsor: Harrell Remodeling, Inc.
It was a pleasant day on the golf course and everyone appeared to have fun during the cocktail hour and program. Special items were also raffled, including the cash prize of $480, which was won by Phil Castaneda. A very special thanks goes to SILVAR Board Director John Tripp for overseeing this very successful event, as well as the Los Gatos/Saratoga District Council members for putting this event together.
The following are the golf tournament results:
First Place: (Score 56) Doug Evans, Matt Paulo, Tom Gibbons and Michael Geary. They received a certificate for a foursome of golf with carts at Half Moon Bay Golf Links, donated by Coldwell Banker – Los Gatos.
Second Place: (Score 57) Gregory Howell, Doug Hollingsworth, Rich Hamilton and Justin Estrada. They received a foursome of golf at Cinnabar Hills donated by Cinnabar Hills.
Third Place: (Score 59) Peter Ye, Dave Park, Charles Kim and Walter Kim
Closest to the Pin: (Canyon 5) Bob Cranmer-Brown 3’0”, (Mountain 6) Nick Pagonis 0’7”
Long Drive: (Canyon 1 Men) Doug Evans, (Canyon 1 Women) Connie Prince, (Mountain Men) Ron Minearo, (Mountain Women) Wendy Tomaro
The Third Place winners and winners of the Closest to the Pin and Long Drive each received a $72 gift certificate to Cinnabar Hills Golf Club.
Over 100 members attended Wednesday’s Los Gatos/Saratoga District meeting and listened to longtime appraiser Roger Miller from Taketa, Miller & Associates. Miller’s message was one of “guarded optimism” regarding 2011, but he is especially positive about this spring.
“Things are starting to turn around,” Miller remarked, and proceeded to share his data.
* At this time last year, there were 95 listings in Los Gatos; as of Tuesday evening, Miller indicated there were 111. A year ago, Saratoga had 73 listings; as of Tuesday night, it had 71.
* Pending sales in Los Gatos at this time last year were 39; they are 43 this year. Saratoga had 20 last year; it has 36 this year.
* 2010 home sales were up in Los Gatos 22 percent from 2009; Monte Sereno, up 42 percent; and Saratoga, up 25 percent.
* Homes priced at two million dollars and under are in a very strong market – 92 percent of last year’s home sales in Los Gatos were under $2 million; Monte Sereno, 65 percent; and Saratoga, 81 percent.
If a listing is under $2 million, if it’s priced right and in the Los Gatos school district, it will sell in one to two months or less. “If your listing is under a million (dollars) in Los Gatos and it hasn’t sold, there’s something wrong,” Miller told REALTORS®.
There is no question prices have dropped, some by as much as 20 percent, and others more, depending on the area. Miller said a home bought at the end of 2007 or at the beginning of 2008 would sell roughly for the same price today.
If there are many foreclosures and REOs in a neighborhood, the market will certainly be affected. This is not much of an issue in the Los Gatos area, according to Miller. There continue to be multiple offers in Silicon Valley – one home just received six offers recently. There are also a number of high-end homes that have sold in the $4 million and above range in Woodside, Atherton and Los Altos Hills.
Miller advised REALTORS® to always do a true history on comps and always check the absorption rate. In Los Gatos, for homes priced between $1 and 2 million, the absorption rate is three months; between $2 to 3 million, seven months; between $3 to 4 million, seven to10 months. In Saratoga, the absorption rate for homes priced under $1 million is one month; between $1 and 2 million, two months; between $2 and 3 million, eight months. Between $3 and 4 million, 5.5 months.
Miller said REALTORS® should NOT have to deal with out-of-town appraisers, unless the report is co-signed by an appraiser who knows the area. Speak with the bank manager; it is important to know the bank you are dealing with, he stressed.
There’s more optimism in the air, according to Miller. Here are some signs:
*Stocks have improved.
* The unemployment rate has gone down a bit – the unemployment rate in the San Jose-Sunnyvale-Santa Clara MSA was 10.7 percent in December 2010, down from a revised 10.9 percent in November 2010, and below the year-ago estimate of 11.5 percent, according to the Employment Development Department.
* Google is hiring 6,000 new employees nationwide and 2,000 locally.
* Heavier traffic these days points to more activity and more people being employed.
“Everything is starting to turn,” Miller repeated.
Miller, who is well-known for his expertise in the business, said he is very confident that the housing market in the region will do well this spring. But time is of essence. He told REALTORS® if they have sellers who are sitting on the fence, “tell them to get their house on the market now, within the next two weeks.”
After providing significant support behind an opposition campaign against Measure Q in Saratoga, SILVAR is pleased the measure proposing a two-story height limit for commercial and office property appears doomed.
The article, written by Joe Rodriguez of the Mercury News, concludes there are still ballots to be counted, but the measure is essentially headed for defeat. Rodriguez questions whether this would mean the Village “could grow taller than the town’s majestic redwood trees, and would development and increased traffic harm the surrounding neighborhoods,” as proponents of the measure fear.
Not so, says Councilman Chuck Page. Page, who won re-election and opposed the measure, says in the article that a previous 35-foot building height remains in effect and would prevent high-rise developments.
“The planning commission isn’t going to let anyone build to the max,” Page said in the article. “We have to do everything smartly and retain the character of the town, which is what everyone wants.”
Measure Q’s defeat is a huge victory for businesses and property owners in Saratoga!
By Adam Montgomery, SILVAR Government Affairs Director
Since August, SILVAR has been working to support property owners, businesses and residents in Saratoga, to work against an ill-conceived two-story height limit measure in Saratoga (Measure Q).
Going into the last two days of the campaign, there are almost no new ways to convince voters on an issue, so I would usually save my breath, but an e-mail I received this weekend, while picking out pumpkins with my wife, inspired me to share some thoughts on the current state of affairs in Saratoga.
On Saturday, I was forwarded a chain e-mail that originated as a neighborhood alert, warning residents through an alarming recent account of a robbery at gunpoint that occurred at a Saratoga home. A comment made by a supporter of Measure Q in the chain left me speechless: “Vote YES on Q. Do we really need to draw more attention to Saratoga?” The only way to interpret this comment is that either the campaign has directly contributed to the robbery, or a NO vote would mean more armed robberies.
This comment might make sense if this was a campaign to support public safety funding, but for a ballot box zoning measure to limit commercial, retail and office property to two stories for 30 years, is inflammatory. As I learned back in Constitutional Law 101, defamation is not a protected form of speech, but along with fear and intimidation, this has been a cornerstone for the YES campaign.
This is simply the nastiest campaign I have ever witnessed. Beyond the theft of over 150 legally placed signs in opposition to Q, threats of boycotts against businesses against Q, and unsolicited harassment of residents at street corners or at their home if they openly oppose Q, there have been many lies put out in support of Q.
Lie #1: SILVAR has no representation in Saratoga, with no board members residing there, and they should have no say over the residents of Saratoga. SILVAR does have a board member who lives in Saratoga – his name is Bryan Robertson. SILVAR also has over 300 members living there, representing over one percent of the population. Also, since when do REALTORS® have no say on real estate and land use issues? Last we checked, that is our bread and butter.
Lie #2: Measure Q will bring less attention, preventing armed robberies. The complete opposite may be true. Measure Q’s restrictions will turn businesses away from locating downtown, creating more blight and restricting the tax base used to fund public safety. Remember the broken glass theory – with blight and less foot traffic, come vagrants, loiterers and crime.
Lie #3: Measure Q will prevent overcrowding of Saratoga schools. Saratoga’s enrollment numbers have been declining for years. Downtown is the only area that could allow more than two stories under current height limits, which is not zoned currently for residential development. Also, the Measure Q restrictions will negatively impact commercial property value and tax receipts, reducing school revenues.
Lie #4: Without Measure Q, small businesses will be pushed out of Saratoga. There are no plans under the current rules changed by Measure Q to evict businesses. Business is going really bad in downtown, which has lost 30 businesses so far. Without some significant investment, Saratoga’s downtown will slowly dwindle into a ghost town. Measure Q will kill that investment and wipe out the businesses that have weathered this recent downturn.
Lie #5: Only out-of-towners oppose Q, most of the moneys spent against Q is from Los Angeles. Over 400 residents and businesses have shared their names in opposition to Q, including three council members and four planning commissioners. Our PAC is shared with the California Association of REALTORS®, which is located in Los Angeles, but our Saratoga members have given more money into the REALTOR® Action Fund in this election cycle than has been expended towards the campaign.
What is the moral of this story?
First, voters should not be making complicated land use decisions through the ballot. Voters chose their leaders to listen to their concerns, entrusting them to make the most educated and fair decisions to benefit of the entire community. Land use campaigns always fall victim to emotional and erroneous information. If poorly weighed, these campaigns can handcuff a city’s control over its own jurisdiction.
Second, our association has a duty to conduct our advocacy efforts at the same high ethical levels as our members in their business. We have resisted the temptation to run a tit for tat campaign by not resorting to cheap tricks and questionable behavior; instead, we have focused on educating voters on the facts of the measure. The good news is issue campaigns are usually won or lost on the merits of the arguments used. The more time spent slinging mud at your opposition, instead of the issue, does not typically bear good results.