Is 2014 a good time to buy a house in Los Gatos for first time buyers?

Asked by Ela, Los Gatos, CA Tue Jun 17, 2014

We are thinking about buying our first house in LG area but we are hesitant about this plan because of the enormous increase in sale prices during recent years. Do you think the houses will keep their values and go up? Or do you think most of the houses are already unaffordable and the prices need to go down as the interest rate is also going up?

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4
Cindy Davis, Agent, San Diego, CA
Tue Jun 17, 2014
I'm a big believer in buying a home when it's right for YOU and YOUR family, When it comes to timing the market, even experts disagree. Los Gatos has long been a desirable area and will continue to be so,

I recommend evaluating your reasons for buying. The best reason to buy is for stability and enhanced quality of life. Whether or not it serves as quality investment will depend upon how long you live there, and many socio-economic factors outside your control.

The future is impossible to predict. Buy now if you are ready for home ownership.

Best of luck.
2 votes
Sally Grenier, Agent, Boulder, CO
Tue Jun 17, 2014
Good answer Cindy! I was going to say the same thing. It's impossible to predict what the real estate market will do in the future. Over the long term, real estate has always been a good investment. Same with the stock market. But you have to think long term. Trying to "time the market" is impossible and not very smart.

I would focus on you and your own personal situation. Can you afford to buy? What are your short and long term goals...personally and professionally? Do you have a stable job? Do you plan on saying in the same area for several years, or do you think you might want to relocate to a different part of the country? Do you want to get married and start a family? Get a dog? Do you want to start building a "nest egg" in the form of home equity, or are you happy to keep throwing money away on rent? Do you want to be responsible for your own home, make it yours, make improvements on it?

Buying isn't for everyone. Some people don't like having that responsibility. Or they like not having to fix things when something breaks.

Lots of things to think about. Market conditions is a very small part of the puzzle, in my opinion.
1 vote
Grace Hanamo…, Agent, Cupertino, CA
Mon Sep 29, 2014
Hi Ela:

If you have not already purchased a home in Los Gatos, my suggestion...holding pattern right now. The market is shifting and changing and if you're in a position to purchase, you can take advantage of that market when it swings in a buyers favor.

Grace Morioka
Allison James Estates & Homes
If you're a buyer...get sizeable rebates on homes you purchase by calling me.
0 votes
Mary Pope-Ha…, Agent, Los Gatos, CA
Wed Sep 24, 2014
Hi Ela,

Los Gatos should be evaluated together with the region as a whole. If you are ready to buy, and plan to stay a long time (5 years minimum), home buying in Silicon Valley generally is a good idea. There are more people needing homes than there are homes for them to buy due to strong jobs here.

Is Los Gatos overpriced for the area? Actually I think it is undervalued compared to Almaden Valley, Saratoga, Cupertino and other nearby areas in the greater San Jose and Santa Clara County area. One indicator that the market here is slightly softer than other areas is the sale price to list price ratio. Each month I put out a real estate report for the county, and consistently, Los Gatos has had one of the lowest ratios - the other lower areas are usually Morgan Hill and Gilroy. With great public schools, a wonderful downtown and sense of community, the town of Los Gatos has tons to offer. So why is it slightly less in demand?

One reason might be that it's just a little further away from high tech hubs in Mountain View, Sunnyvale, Palo Alto and so on. But the same could be said of the more remote, and less expensive, southern area of Almaden Valley in San Jose. Almaden does not have a quaint downtown area per se. It does have schools that are just as good. Many buyers feel that the further drive is an OK tradoff for the school scores in Almaden.

And if you look at pricing and schools, in general it gets less expensive from Saratoga to Monte Sereno to Los Gatos to Almaden - that part seems appropriate. Of those areas, though, Los Gatos has the most to offer - which would seem to increase its value considerably. At least I believe it should.

If you enjoy Los Gatos, now is a great time to buy. The first half of the year was a bit of a wild ride in LG and throughout the Bay Area, but now it's calmer and much easier to buy a home. Real estate economists are predicting that in the new year it will get crazy again due to the prolonged inventory shortage. The autumn is often an easier time to purchase a home, and this year seems to be no exception.

If you'd like to learn more about Los Gatos neighborhoods, here are a couple of links on my Live in Los Gatos blog (with videos):

http://liveinlosgatosblog.com/the-vista-del-monte-neighborho…
http://liveinlosgatosblog.com/the-blossom-manor-neighborhood…

Or just navigate around the blog for market stats and more info. I think you will find that Los Gatos is a great place to call home!

Mary

Mary Pope-Handy
Realtor, CRS, CIPS, ABR, SRES
BRE License # 01153805
Sereno Group, Los Gatos
408 204-7673
http://www.ValleyOfHeartsDelight.com
http://www.SanJoseRealEstateLosGatosHomes.com
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