Home Buying in San Jose>Question Details

Phil, Home Buyer in 92677

I am looking to buy a 3BR plus house in San Jose (1500 sqft plus) and neighboring towns for up to $950k. Where?

Asked by Phil, 92677 Sun Oct 7, 2012

I have two young kids so the property must feed into top schools, a score of 8 and up. Also, dont want to drive more than 30 min to downtown San Jose. It feels like Los Gatos, Mountainview, Cupertino, Saratoga and Palo Alto are too expensive. Is that the case, and if not, which one should I focus on? Any other neighborhoods I should consider? Finally, it looks like the prices have softened a bit over the last few weeks, what are the changes that that trend will continue over the winter months?
Thanks!

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15
Thank you Phil for your response:

With respect to price reductions in listing prices, that reflects homes that were overpriced. With this seller's market some sellers have begun to get overoptimistic and have priced their homes above the market, and then later reduce their prices when the homeowner realizes that they are clearly over the market.

List prices of homes are not a good indicator of what the market is actually doing. List prices indicate what sellers think that the market should be doing, not necessarily what the market is actually doing.

I recommend that you look at the closed sale prices instead. Those are the more accurate indicator of what the market is actually doing. .

With respect to the graph in your link, that is sale price per square foot for homes in Los Gatos.

For single family homes, price per square foot is not an accurate indicator of the market trend. For single family homes, a drop in the overall price per square footage often only indicates that a larger number of homes with lower quality construction and lower quality of finishwork are selling and skew that number down. For single family homes the quality of construction and quality of the finishwork is a very important factor in the sale price per square foot.

. That is particularly true in Los Gatos where you have a mix of many custom homes with very expensive high quality construction, and high quality finish work, and a number of homes with low quality of construction and low quality of finish work and a large number of homes in between.

When the homes with high quality construction and high quality of finish work are selling, the price per square foot number goes up. When the homes with the lower quality of construction and lower quality of finish work are selling that price per square foot number goes down. This is true in a rising market where the sale price of all similar homes with similar quality of construction and finish work is going up.

One of the reasons why this happens, is that at the beginning of a rising market the homes with high quality of construction and high quality of finish work tend to sell first. The result is a relatively high dollar per square foot number.

The remaining homes with low quality of construction and low quality of finish work tend to sell after the homes with high quality construction and high quality of finish work have been sold.

These lower quality homes tend to sell at a lower price per square foot because they are of lower quality. The result is that the price per square foot number is now skewed down, even though the overall market trend is up.

The market for similar high quality homes, when compared with other similar high quality homes is up and the market for low quality homes compared with other similar low quality homes is going up yet the price per square foot number is now skewed down.

That is one of the reasons that I do not use the overall price per square foot indicator to determine market rends for single family homes. There are other better, more accurate and more reliable indicators for market trends of single family homes than the price per square foot indicator.. .

The price per square foot indicator is a better indicator for commercial property where leaseable square footage, not the quality of construction and quality of the finish work is a very important factor in the determination of the fair market value of commercial property.

For more information you may reach me at my cell phone: (408)509-6218

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
.
1 vote Thank Flag Link Mon Oct 8, 2012
I don't know where RedFin pulls their numbers. I can say that us agents are in the trenches and experiencing multiple offers and prices going over recent sales.

As for location, Cambrian 95124 then 95118, Almaden 95120, Campbell, Parts of Evergreen. There are pockets in Los Gatos 95032 which don't have Los Gatos Schools yet the Campbell Union School district has higher scores.

As long as our inventory remains as low as it has been and interest rates as well, I see our market remaining very healthy. I'll give you an example, inventory of single family homes in Santa Clara County is approximately 1425, this is from Morgan HIll up to Palo Alto. All price points. In a balanced market this is over 3000. There would need to be some big changes for it to jump that high.
What would drive that inventory is as prices increase those underwater would now have some equity and they would put their homes on the market. Or another recession and job losses. I believe that our government is managing this pretty good right now. Especially given where we were n 2008 and 2009. We've come a long way.
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Mon Oct 8, 2012
I think others have covered the aspects where you might want to look so I am only going to answer one aspect of your questions.

Your statement “it looks like the prices have softened a bit over the last few weeks” is wishful thinking on the part of a buyer. Prices are strong and moving somewhat upward as demand continues to outstrip supply. We are in a strong seller’s market. That trend will continue until the number of houses on the market increases or the number of buyers decreases.
1 vote Thank Flag Link Mon Oct 8, 2012
Try looking at 95120,95124,95118. Great schools and you may find what you are looking for in that price range. Even Los Gatos listings could be Campbell school District . The best way for you is work with a Real Estate Professional to help you with your search. Good Luck
Greetings
0 votes Thank Flag Link Mon Oct 8, 2012
Hello Phil~

You have received so many great answers to your first question. In regards to your second, perhaps you should interview a few Realtors to get you going on the right path of purchasing your home. There are several homes that are listed in say Los Gatos, but have Campbell Union School District, which may or may not have a different asking and sell price. San Jose as in Almaden will have several different Elementary schools with different API scores, as does Willow Glen, Los Gatos, Saratoga, Campbell, etc. There MAY BE several obsolesce in homes that will reflect dropping their prices. Perhaps they were listed to high in the first place or near a busy street, or other situations that make buyers want to offer less than a property in the best situation. Where these property's even in this market (by the way are getting better in certain areas), will receive multiple offers. There are areas as in Mt.View, Los Altos, Palo Alto, Saratoga, Los Gatos, Cupertino that even in the down turned market where not completely affected. I had several buyers that thought they could get a great deal but gave up. One because a lot of these homes or sellers that wanted to sell and in the school district or premium situations sold with multiple offers.

This is just a look into a few variables, you should really employ a Realtor.

Best Regards~

Denise A. Szyszlo Realtor
DRE 01441160
Office:: (408) 369-2000 x319
Mobile: (408) 768-7097
Email: denise.szyszlo@century21.com
Website:http://www.DazzleHomes.com
CENTURY 21-Alpha
419 E. Hamilton Ave,
Campbell, CA 95008
0 votes Thank Flag Link Mon Oct 8, 2012
Thanks for all these insighful replies. With respect to a drop in prices, I pulled this info from RedFin for Los Gatos and it shows the drop over the past few months: http://www.redfin.com/city/11234/CA/Los-Gatos
Also, when looking at properties on various websites I see quite a few price reductions during the last few weeks. Now that's subjective, but when scrolling through the Trulia list I see probably every 5th property with a price drop. So maybe it is wishful thinking, maybe it is a change in the trend.
0 votes Thank Flag Link Mon Oct 8, 2012
Thank you Phil for your question:

First: There are a few homes in Cupertino which do meet your criteria. However because there are so few homes in Cupertino that do meet your criteria, your selection is very limited

Second: Campbell, the Cambrian area of San Jose, Willow Glen, Santa Clara and the Almaden Valley Area have a substantial number of homes that do meet your criteria. That gives you the opportunity to have much greater selection.

Third: With respect to the issue of softening in prices: I have not seen that with homes in neighborhoods that have schools with high API scores. The only neighborhoods where I I have seen anything that could be called softening, is that the rate of the rise in prices has leveled off in neighborhoods with schools that have lower API scores.

Even in those neighborhoods with schools with low API scores, the only softening that I have seen is that the rate of increase in the sale prices of those homes has begun to slow. However even in those neighborhoods I have not seen any actual declines in the sale prices of homes in those neighborhoods. That is to be expected because there are far more well qualified people who want to buy homes, than there are homes for sale. The seller does not have to reduce his price to get his home sold.

However those neighborhoods with Schools with high API scores are in very high demand. The rate of the rise in the selling prices of homes with schools with high API scores is still very high.

That high demand and rate of rise in selling prices will continue in those neighborhoods. That is due to the large numbers of well qualified people who desperately want those homes and the very limited supply of those homes.

There are far more well qualified people who want homes with schools with high API scores than there are homes available for them.

Also with respect to the issue of softening in prices: We have over 4 years of pent up demand for homes in this valley. People were sitting on the sidelines reluctant to buy homes because of the bad economy. Now that the economy of this valley is rebounding, large numbers of people are coming back into the market to buy homes. We have a 4 years of backlog of people coming back into the market all at one time. The inventory has been sold off within the last few months.

The result is that we now have a very low inventory of homes and a backlog of large numbers of people, fighting for the few remaining homes on the market.. That will continue for some time.

For more information you may call me at my cell phone: (408)509-6218

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
.
0 votes Thank Flag Link Mon Oct 8, 2012
Hi Phil,

Great questions. Yes, those areas you mentioned are expensive and I too believe that Willow Glen would be an excellent choice - I've lived and been a Realtor there for almost ten years now. It has tons of charm, all kinds of amenities, a vibrant downtown (the only area of San Jose with it's own downtown identity), good schools, convenient central location, and it's very family-oriented.

As far as prices go, you're very observant - yes the prices in Willow Glen for example have leveled off over the past week or two after a previous increase. See the last 30-day chart of prices in the 95125 zip code of Willow Glen on our blog. http://blog.realscout.com/?p=308

If you'd like to discuss the market more and some great places to live that meet your criteria, I'd be delighted to spend some time chatting with you. It's a subject that I'm passionate about... how to buy a home in today's new world of real estate.

Please feel comfortable giving me a call or an email anytime.

Best regards,
-Bart

-------------------------------
Bart Marchioni, RealScout Concierge
(408) 420-8270
http://www.RealScout.com
DRE# 01385188

Using Technology to Bring Transparency to Home Buying & Selling
Web Reference: http://www.RealScout.com
0 votes Thank Flag Link Sun Oct 7, 2012
Hi Phil,

Almaden would be my top choice if you want SJ....best Value for money, you can get a VERY nice home for that price with really good schools, all the way to High school! The best of what you can want......commute may be your only one, small compromise, depending on where you folks work.....if to DT Sj then that is within 30 mins.......
I just put 3 familes into homes there, and have two other past clients also in nice large homes, very happy with the area and neighborhood, and schools.........Happy to provide you with names, and contact info for references........Let me know if you want to talk in detail.
Be well and Safe, All the Best, regards,
Nina Daruwalla
0 votes Thank Flag Link Sun Oct 7, 2012
Hi,
Try looking at 95120,95124,95118. Great schools and you an find what you are looking for in that price range.
Pricing will depend upon supply and demand so we will see if regular sellers are willing to come on the market and increase the inventory.
Robbie
0 votes Thank Flag Link Sun Oct 7, 2012
Hi Phil,
Cambrian, Almaden, and Rolling Hills area if Campbell would be a great fit! I have a few more ideas as I specialize in the South Bay and work with families who put schools as a top priority when choosing a home,
I'd love to chat, please reach out and we can further discuss your must haves.
All the best!
Kimberly Douglas
CSR Real Estate Services
408-318-5542
Kim@csrteam.com
http://www.homesbykimberlyd.com
0 votes Thank Flag Link Sun Oct 7, 2012
Dear Phil,

You can search for any Active Listings currently on the market by visiting my website.
Enjoy!
Thanks,

Lamson
http://lamsondang.com
Web Reference: http://lamsondang.com
0 votes Thank Flag Link Sun Oct 7, 2012
Hello Phil~

Thank you for your post. The Almaden and the Willow Glen area's in San Jose would be with-in your commute with top schools to consider. If you are not working with a Realtor I would love to work with you. If you could contact me I can provide you with what I offer, than we can go over a strategy to find your perfect home.

Best Regards~

Denise A. Szyszlo Realtor
DRE 01441160
Office:: (408) 369-2000 x319
Mobile: (408) 768-7097
Email: denise.szyszlo@century21.com
Website:http://www.DazzleHomes.com
CENTURY 21-Alpha
419 E. Hamilton Ave,
Campbell, CA 95008
0 votes Thank Flag Link Sun Oct 7, 2012
Hi Phil,

I recently funded a property in Evergreen area for $965K. Have you looked in Evergreen?

In case you need help with Best Rates, Best Services pls feel free to contact me.

Thanks
Jacob
NMLS 327086
0 votes Thank Flag Link Sun Oct 7, 2012
Hi Phil, I would love to represent you as your Agent!

Almaden & Cambrian areas of San Jose has some Excellent Schools

Please call me so we can discuss further.

Bradley Wilson
AMICI REAL ESTATE
488 Blossom Hill Rd. Suite B
San Jose, CA 95123
Bradley@AMICIrealestate.com
AMICIrealestate.com
DRE 01491944 NMLS 340990
Direct: (408) 228-7867
FAX: (408) 273-6975
0 votes Thank Flag Link Sun Oct 7, 2012
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