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In the world of San Jose real estate, lots of would-be buyers dial it back after Thanksgiving, many not to emerge until after Super Bowl Sunday.
But sellers who keep their homes on the market in Almaden and Blossom Valley, Cambrian and Campbell, Willow Glen and the Rose Garden this time of year tend to be motivated. So aggressive buyers should stay out there in December – while many of their competitors turn into couch potatoes.
“When you come to a fork in the road, take it.” — Yogi Berra
Two of San Jose’s more desirable zip codes – 95124 and 95126 – came to a fork this year and appear to have taken divergent paths.
Median list prices in 95124, which comprises a large portion of the Cambrian area, posted a typical seasonal gain in the spring, but topped out and reversed in time to maintain its secular 3-year trend of lower highs – which means it seems headed for a new secular low come January or February. (more…)
Sunday’s open house is a great opportunity to own a turnkey home with lots of land (nearly 10,000 square feet) on a street that’s seeing many property improvements. Oh – it’s also in the awarding-winning Cambrian School District.
I hesitate to use the term “potential,” because that’s usually real-estate code for “fixer-upper” and this home has updated kitchens and baths and lots of designer finishes such as crown molding and gleaming hardwood floors; nonetheless, if you drop by my open house June 12 from 1-4, you’ll recognize nearly unlimited potential.
For more details, go to:
2949 LANTZ AVE, San Jose, 95124.
I hold a lot of open homes in Almaden Valley and the vast majority of prospective buyers tell me the main reason they’re looking in 95120 is for the excellent public schools. Many of them also suffer sticker shock at Almaden home values: Average list price of $1.07 million even in today’s depressed market.
Many of these buyers also are surprised when I tell them they can get equally good public elementary and middle schools in nearby Cambrian (95124) for an average of $400,000 less ($671,407). Before I prove it, a caveat: The main reason for the price gap is the relative size of the homes. In Almaden, it’s 4-or-5 bedrooms and 2415 square feet and in Cambrian, it’s 3-or-4 bedrooms and 1554 square feet. The gap in price-per-square foot of list prices is actually quite small, $412 in Almaden and $396 in Cambrian.
That said, here are the comparisons for selected elementary-school and middle-school API test scores:
Almaden
Cambrian
Before you jump down my throat, yes, I’m aware that some of these schools’ service areas don’t fit comfortably within certain zips. Guadalupe, for instance, is located within 95120 and serves many western Almaden households. But it’s also part of the 95124-based Union School District and serves some Cambrian homes. Similarly, Dartmouth Middle is located in 95118 and serves both Almaden and Cambrian students.
My point is that elementary and middle school scores in the two areas are virtually a statistical dead heat.
High schools are a different story, but I would point out that Leigh High School (816), which serves many Cambrian homes, has pulled virtually even with Pioneer High (825), which serves a lot of homes in Almaden.
So, if public schools are important to you but your budget is closer to $750,000 than $1 million – and you don’t necessarily need 2,000 square feet or more – Cambrian is full of great neighborhoods and well-built (often fully updated) homes.
And don’t forget, you can research both API scores and demographics of any California public school by finding the school house down the right rail of this blog and clicking where it says “Click here to get school test scores.” Duh.
As regular visitors know, the weekly research reports that serve as the foundation for the graphs on JohnBowmanHomes.com use 7- and 30-day rolling averages of median list prices to chart changes in the local real-estate market.
The median, as you probably know, is the number at which there are the same number of sale prices above that value as there are below it. Lately the simple-average list price has been running substantially higher in most zips than the median. So I thought this week I’d update you on the average list prices in San Jose and in the seven zip codes that I examine most closely each week.
Remember, just as the Bay Area has dozens of micro climates, Santa Clara County has many micro real-estate markets. Read my blog posts regularly, and check into my 1-minute buyers and sellers clinics to get a better feel for the neighborhood where you live or want to live.
And if you want to become a real neighborhood real-estate expert, find the question “How’s the Market” down either the left or right rail of this blog and follow the directions to receive weekly hyper-local research reports from me by e-mail. For more information, view this short video:
San Jose’s Willow Glen and Almaden Valley neighborhoods have seen appreciable rises in median price-per-square listing prices since the beginning of 2011, while Cambrian’s two zip codes have not:
As you can see, Cambrian’s 95124 zip at least has stabilized since January, while 95118 has continued a plunge that began early last fall. Not surprisingly, none of the four zips is anywhere near prices that were seen at the top of the market.
Among the hardest concepts for buyers to accept are the wild seasonal swings in list prices that occur every year in Silicon Valley even during a long-term secular trend that’s headed in the opposite direction. Below is one of several dozen charts I could have drawn to illustrate:
This chart is for condo prices in 95124, a zip that comprises much of Cambrian and areas along the Campbell boundary. As you can see, the 3-year secular trend is down, down and down. Nonetheless, you can also see price swings of $60k to $100k from winter/spring bottoms to summer highs; this year, in fact, has already seen a $60k bump from the January low and we’re nowhere near the typical annual market top.
The ramifications of this are immense – including the obsolescence of price “comps” older than a few weeks. Think about the possible result: Not only can a prospective buyer lose a great home because he wrote a low-ball offer based on obsolete comps, but it’s likely that if he finds an equally suitable home just a few weeks later, the price will be $10k to $20k higher. The seasonal window has closed and by the time the next one opens, there’s a very good chance that the lowest-in-history mortgage rates will be up a half-a-point or more (equating to another price increase of $10k or more.)
It would be easy to write these median price moves off to just a change in the mix of homes changing hands – except that the price-per-square-foot line shows similar and coinciding trends.
In a previous post, I charted similar price bumps of $75 to $80k in Cambrian single-family home prices over the past couple of years. This is not a one-off deal, ladies and gentlemen. The smart buyer is going to grasp these seasonal moves and use them to guide both the price and timing of his offers.
Ignoring these swings can cost you more than money, but also the chance to buy the home you wanted most.
I’ve teamed up with Altos Research to make it possible for you to stay on top of these neighborhood price swings. Here’s how:
Sunday’s open home is on an established, quiet street of well-maintained homes in a convenient Cambrian neighborhood. As a bonus for families, it’s also served by Oster Elementary School (881 API) and Dartmouth Middle School (900).
In addition, you’ll find that the owner has taken great pride in caring for this 1780-square-foot home and its landscaping. It’s ready to move in, with a comfortable feel to it. (At under $700,000, the price is equally comfortable.) You’ll also find quality grocery and other shopping within a short walk. For more details, click here:
The best way to feel confident in your home purchase (or sale) is to know that you understand the local real estate market better than other buyers and sellers. That’s the way my clients feel, and here’s why:
For an in-depth look at what’s happening in Cambrian’s two zip codes, be sure to read my previous post.
On Jan. 30, I advised prospective homebuyers to “Move now to save $$$ in Cambrian’s 95124 zip,” an idea based on two consecutive $75k-$80k, January-to-June moves up in 2009 and 2010. So far, that advice is looking pretty good, as median list prices in 95124 are up by $24,000 since Feb. 1.
Now may be a good time for buyers interested in Cambrian to start considering 95118, based on what’s happened to prices in the two zips so far this year:
In 95124, prices peaked last June at $687,000 and bottomed around Jan. 7 about $100,000 lower, before bouncing back to the current $619,000. In 95118, the peak came three months later, in September, at $585,000 – and prices have yet to bottom, though a $3,000-or-so bounce to $538,000 in the past week could turn out to be the turning point.
Based on the longer-term view, however, I believe buyers should see the current swoon in 95118 as a window of opportunity, rather than a cause for alarm. The divergence of median list prices since early January has re-established a more typical price gap of $80,000-or-so between the two zips, and based on that I would expect the two to begin moving in tandem again sometime in the next three or four weeks.
And based on past seasonal trends, I believe that direction will be higher at least through mid-to-late June.
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