December 15, 2010

Cheapest House in Los Gatos

Another day, another Black Friday DEAL!  Tired of houses in places you’d be embarrassed to call home?  How about a zip code that’s on Forbes’ 500 Most Expensive list? Yes, here is a DEAL in the 199th most expensive zip code in the entire United States!

206 Thomas Dr, Los Gatos, CA 95032
$610,000

image Beds: 2
Baths: 1.5
Sq. Ft.: 1,020
$/Sq. Ft.: $598
Lot Size: 6,675 Sq. Ft.
Property Type: Detached Single Family
Style: Traditional, Cottage/Bungalow
Stories: 1
View: Mountains
Year Built: 1964
Community: Los Gatos/Monte Sereno
County: Santa Clara
MLS#: 81027596
Source: MLSListings
Status: Active
On Redfin: 190 days

Great opportunity to live in Los Gatos. Charming Home w/ updated kitchen and bathroom w/ concrete and limestone counters, hardwood floors, newly painted interior, crown molding, ceiling fans in all rooms, sunny den as living room extension (not included in sq. footage), fireplace, quiet location next to park, backyard with huge deck and hot tub. 2 bedrooms, 1 full bathroom and a half bathroom

Concrete and limestone counters?  Is that the new kitchen trend that will replace granite, or did the contractor have a brother-in-law working for Caltrans? 

Somebody seems to have gotten a DEAL on the deck stepping, though.

image image

So buy this house today!  It’s in a respectable location, and the lawn looks like it really needs watering.  Plus if one of you doesn’t buy this by close of business today, I bring back the zip code series.  No pressure.

Comments (56) -- Posted by: madhaus @ 5:03 am

56 Responses to “Cheapest House in Los Gatos”

  1. ES Says:

    it’s on the wrong side of 17 to be in Los Gatos. It’s really a forgotten, unincorporated area where non engineers live.

  2. sfbubblebuyer Says:

    The last time I actually LOOKED at Los Gatos (2007), the cheapest home for sale was about 950k.

    As for concrete countertops, they’re actually kind of cool. If you’re good with forms, you can make some seriously entertaining counter shapes.

  3. nomadic Says:

    Geez, no comments today? madhaus, I think you’ve taken this cheap house thing too far, picking on the late great RBA. I’m so ashamed. I’m going to have to go buy a $10,000 watch or something to restore the respect I expect to get from strangers.

    /sarcasm

  4. bob Says:

    Geez, no comments today?

    Hmmm… yes indeed. What else to say. Its yet another super-expensive ho-hum house with an asking price about 7 times more than what you could buy it for just about anywhere else in the country. Its small. Its got a puffy 90′s looking couch. It has a hot tub.

  5. Real Estater Says:

    To please Bob, I suggest we run some features on cheap, affordable homes within the Bay Area itself, like this one. Why move to Austin when cheaper homes can be found right here?

  6. Real Estater Says:

    Cheapest home in Alameda…but it’s subject to Senior Management approval.

  7. Real Estater Says:

    Check out this one for about the same price. It’s amazing how a home built in 1896 can remain in such original condition.

  8. SEA Says:

    My favorite feature of this home is the RPL, Real Power Lines.

  9. Cassie Says:

    This is not the cheapest home in Los Gatos. Los Gatos includes the following area codes; 95033, 95030 and 95032. The first one is for the unincorporated parts of Los Gatos and you can find homes there for less than 600K with great views and lots of land.

  10. nomadic Says:

    95033 isn’t Real Los Gatos.
    Heck, 95032 barely qualifies. ;-)

  11. bob Says:

    “affordable” is sort of relative RE. Sure- I’m well aware that there are indeed some cheaper homes by BA standards. But the reality is that every single house I’ve seen that fits that description- as in $250,000-$300,000 is some house in need of serious, often major structural repairs… as in foundation or rot issues. The price might seem cheap but the fact remains that the very cheapest homes in the Bay Area- and I mean areas that are at least halfway nice- still costs more than houses that are often half as cheap and twice as nice elsewhere. No thanks. We will continue to rent until we leave.

  12. Real Estater Says:

    Bob,

    But you don’t need to go elsewhere. There are plenty of options right here that addresses the points you brought up. For example, nice houses like these priced in the $200K range are plentiful and yet well within an hour of where you currently live.

  13. SEA Says:

    #11- “’affordable’ is sort of relative”

    Remember: Income does not matter.

  14. madhaus Says:

    Isn’t it amusing how a certain regular has been disdainful of all property not in 94301… until he supposedly bought something that’s practically in flyoverland.

    Like I said, you’re better off buying in the best neighborhood of a different metro than a crappy exurb of this one. Tracy is to Silicon Valley as Palmdale is to Los Angeles. Or this place is Stockton.

  15. Real Estater Says:

    madhaus,

    The records speaks for itself. I’ve consistently recommended folks to get into home ownership on the base level and then trade up. That’s why I told Pralay to look into San Jose rather than waste his time admiring 94301.

  16. madhaus Says:

    The record does indeed speak for itself. #15 has insulted every location, location, location outside the RBA for years.

    If something is a fact you will hear it from everyone.

  17. madhaus Says:

    And I am not picking on #15 for the lulz, I am calling him out for being wrong in so many different ways. It’s one thing to have a misinformed opinion, it’s another to have no understanding of the world we live in.

    Tracy is on the way down for a very good reason.

    And as the link in my comment #14 notes, there are going to be 25 million unneeded suburban McMansions.

    Twenty. Five. Million.

  18. SEA Says:

    I’m still wondering why the $1,000 per square foot benchmark for 94301 hasn’t been updated to a more appropriate level.

  19. nomadic Says:

    #16 – no kidding. Advising someone who works on the peninsula to buy in Tracy is crazy. Nothing like being a slave to a house you spend so little time in because you’re commuting 90 minutes twice a day. Alameda would be bad enough.

  20. Real Estater Says:

    #17,

    I would take the contrarian view on this one. Tracy is currently cheap beyond reason. Getting in now is buying at the bottom. I believe there’s a reasonable chance to double your money in 10 years. Unlike other outskirt towns, Tracy is a clean city with low crime rate and lots of newer construction. If you go to Stockton, it looks like the arm pit of poverty. Geographically, Tracy is within a reasonable commute to most parts of the East Bay. Buying there is like you buying Sunnyvale in 1990.

  21. Real Estater Says:

    #19, Bob was going to quit his job to move to Austin. There’s no reason for him to work on the peninsula.

  22. Real Estater Says:

    Good news! Mortgage rate raises to 5% due to the strengthening economy. We should be heading into better times next year. In fact, we should expect to see a labor shortage in a couple of years due to baby boomers retiring.

  23. Pralay Says:

    The records speaks for itself. I’ve consistently recommended folks to get into home ownership on the base level and then trade up.
    —-

    Record speaks for itself: Real Estater in 2008:

    Don’t invest in those other places outside of the Bay Area. There’s no cool jobs, no smart people, no diversity, no ramen noodles, no Pho’, therefore, no doubling in price every 10 years.

    Other side of Altamont Pass is not Bay Area.

  24. Pralay Says:

    I believe there’s a reasonable chance to double your money in 10 years.

    If there is no cool jobs, no smart people, no diversity, no ramen noodles, no Pho’ in Tracy, there is no “reasonable chance to double your money in 10 years”.

  25. Pralay Says:

    Geographically, Tracy is within a reasonable commute to most parts of the East Bay. Buying there is like you buying Sunnyvale in 1990.
    —–

    Geographically Sunnyvale was never located at the wrong side of any PASS. So it is a wrong comparison. When Livermore, Dublin already affordable and places like Castro Valley, San Ramon have pretty good schools, people don’t need to live on the Wrong Side of Altamont PASS.

    The resident of Wrong Side of Middlefield bought an investment property at the Wrong Side of Altamont Pass. What a surprise!

  26. Pralay Says:

    We should be heading into better times next year.
    —-

    Heard similar stories before, as noted here. 2008, 2009, 2010. There is always a next year. But, you know, next year never comes.

    Heck, if Real Estater keeps saying the same thing every year, someday he will be right. Even a broken clock is right twice a day.

  27. Real Estater Says:

    >>Other side of Altamont Pass is not Bay Area.

    Your typical short-sighted comment. Given the inevitable urban sprawl, that area will be become part of the Bay Area in the future, just as Pleasanton has become part of the Bay Area after Oracle set up shop there.

  28. Real Estater Says:

    >>When Livermore, Dublin already affordable and places like Castro Valley, San Ramon have pretty good schools, people don’t need to live on the Wrong Side of Altamont PASS.

    I don’t think you can afford those places, or you wouldn’t be renting on the wrong side of Sunnyvale.
    All of those places are around 3X the cost of Tracy.

  29. Real Estater Says:

    Just for the record, I have homes on BOTH sides of Middlefield, going to BOTH of the prestigious high schools.

  30. madhaus Says:

    I love the analogy that buying in Tracy now is like buying in Sunnyvale in 1990. Like so much from #20, it’s mostly wrong, and even in the one way it’s right, it’s right in a way #20 didn’t envision.

    What were prices like in Sunnyvale in 1990? They were 25% higher than prices in Sunnyvale in 1993. So that means we should expect prices in Tracy to continue falling for 3 more years.

    And that isn’t surprising, given that San Joaquin county had the second highest foreclosure rate in the nation, after Las Vegas. 1 in 130 housing units in San Joaquin county were foreclosed upon. In Tracy, the rate was 0.4 percent, or 1 in 250. The nationwide rate is 1 in 492. In 2008, Tracy had a foreclosure rate in excess of 1 in 100 units.

    These numbers are for November 2010, which are substantially down due to most banks suspending foreclosure activity over the robosigning scandals.

    Source for SJ county statistics. Tracy stats from Zillow. RealtyTrac shows 617 Tracy properties up for auction.

    I am going to say that again. There are 617 properties for auction in Tracy. 617. This is in a city with a population of 80,000 people and 24,000 housing units. Plus another 429 defaults not yet foreclosed on. Plus almost 600 bank-owned properties, 60 of them for sale now. How many homes for sale on the MLS? 104.

    This is a Hemet waiting to happen, a city with far too many houses thrown up in the 90s and the first half of the oughties. In 2003, 1492 new houses were built in Tracy. 1492! If we compare Tracy (pop 80,000) with Mountain View (pop 70,000), we can see what a healthier economy looks like, even in a downturn: 69 properties in default, 50 in trustee sale (auction), 48 bank owned properties with 5 for sale, and 8 on the MLS. Heck, Sunnyvale (pop 140,000) has better numbers than Tracy: 92 defaults, 121 trustee sales, 105 bank-owned (6 for sale), and 42 for sale on MLS.

    The crime rate in Tracy is bifurcated; violent crimes down over the past 10 years, but property crimes sharply up.

    Also, there are very few jobs in Tracy for highly paid, highly educated people. In 1990, there were many engineering jobs in Sunnyvale. There was no Yahoo but there was Lockheed. There was no Google, but there was Hewlett-Packard, Tandem, even Apple. There was no Facebook, but there was Applied Materials. And most important of all, there was Fry’s.

    Do you think they have Fry’s in Tracy? No? How about Yahoo? How about TRW? Signetics? What? There aren’t even any Superfund sites in Tracy! What kind of crap city is this that they aren’t getting millions of dollars from the government?

    But don’t worry about the lack of jobs for college grads. They don’t have many. Only 18% of Tracy residents have a college degree.

    The biggest problem with Tracy? Too many houses, not enough people who can afford (or want) to live there. Plenty more land to throw them up, whether there’s demand for them or not.

    Face it, buying in Tracy makes about as much sense as buying in a Phoenix exurb.

  31. Real Estater Says:

    Madhaus,

    The factors you pointed out are exactly the reason why Tracy is a good bet from a contrarian point of view. You’re right, the city is caught in a bind. There is excess inventory at the moment, but this will clear over time. No one is building now, and in a few years supply vs. demand will adjust. The balancing factor is price. Right now price is extremely low due to supply and demand being out of whack. Without this factor prices should be at least 50% higher.
    As you mentioned, most of the construction is recent. What does that tell you? The city has a nice appearance like many of the new development towns. It looks way better than most of the East Bay, and in fact the communities are nicer looking than the one you live in.When you have a nice product at a low price, within commuting distance of the Bay Area, it’s got potential all over it.
    Next point: As you mentioned, the city is larger than MV. This is not some small farm town to tend sheep in. The population and core infrastructure are there, and jobs are in the vicinity, including tech jobs. I already described where the job hubs are, and won’t repeat. As for college grads, were there college grads in Sunnyvale before Silicon Valley? It’s the same thing. What you’re doing is essentially knocking a “start-up”. It goes without saying many aspects of the place are not mature, but at current prices risk is minimal. Taking into consideration this house is a very small percentage of my financial portfolio, I don’t get what the fuss is all about. Do you only have blue chip stuff in your portfolio?

    Last point: I would invest in Las Vegas. I may have even mentioned here I went out to look. The problem is it’s too far away to manage, and the buying process is a pain due to the number of investors and scavengers out there. I wish I could buy there, because an investment that yields positive cash flow from day 1 is a good investment. Imagine people buying you flat screen TV, iPad, or new sofa month after month.It’s like having Christmas all year round.

  32. SEA Says:

    Remember when the RBA extended to the North all the way to Seattle? Back then, it also went much farther west, and it included Phoenix and Las Vegas.

    Now if I’m to listen to #31, I’d believe Tracy is back in the RBA.

  33. DreamT Says:

    I appreciate RE’s full disclosure on his choices. Tracy is not a 2-year bet, but I can see why it makes sense as a 20-year bet. For an investor, a bad current state can be a sign of opportunity. How many others have actually purchased investment properties this year and done similar research? It’s easy being a naysayer.

  34. Real Estater Says:

    I said it before and I’ll say it again. Buying a cheap investment property to manage is a great part-time job for stay-at-home moms, especially one who enjoys real estate. If you come out of this foreclosure crisis without having bought anything, then you could be on Burbed 2.0 10 years later writing could’ve / should’ve / would’ve type posts.

  35. nomadic Says:

    Sure, DreamT, but it’s hard not to scoff at a guy who writes:

    I wish I could buy there, because an investment that yields positive cash flow from day 1 is a good investment. Imagine people buying you flat screen TV, iPad, or new sofa month after month.It’s like having Christmas all year round.

    He makes it sound like free money every month. No risk, no opportunity cost, no vacancy concerns or maintenance. Very simplistic.

    However, if it’s cash flow positive from day one, probably not a bad long term investment. With the lower prices (and low interest rates), the opportunity cost isn’t much of an issue.

  36. SEA Says:

    Detroit is probably a good 20 year bet too.

  37. DreamT Says:

    RE sounds overly optimistic partly out of self-rationalization, true. And he can’t make a statement without putting down someone else. That said, he’s announcing an unpopular choice & rationale for it, and standing firmly by it. Frankly, everybody else on this board sounds the same, all the while thinking they’re the contrarians.

  38. SEA Says:

    Is it contrarian to be contrarian?

  39. SEA Says:

    As if this buy outside the RBA and sell inside is a major revelation…

    May 29, 2010

    I’m thinking I want to buy outside of the current RBA and sell inside of the future RBA.

  40. Pralay Says:

    Given the inevitable urban sprawl, that area will be become part of the Bay Area in the future
    —–

    Too bad it is not part of Bay Area yet. :(

    But it WILL become part of Bay Area when Oracle WILL setup shop there to start a database service for cow and sheep.

    —–
    just as Pleasanton has become part of the Bay Area after Oracle set up shop there.
    —–
    Factual? Oracle never set up shop there. They bought Peoplesoft.

  41. Pralay Says:

    I don’t think you can afford those places, or you wouldn’t be renting on the wrong side of Sunnyvale.
    —-

    Why would someone want to live at Wrong Side of Sunol Pass unless he/she works at Wrong Side of Sunol Pass (or have a cattle-farm at Tracy)?

  42. Pralay Says:

    As you mentioned, most of the construction is recent. What does that tell you?
    —-

    It tells only ONE thing: Over-development in bubble era. Good luck!

  43. Pralay Says:

    Just for the record, I have homes on BOTH sides of Middlefield, going to BOTH of the prestigious high schools.

    You mean Wrong Side of Middlefield and Wrong Side of Oregon Expwy.

  44. Pralay Says:

    As for college grads, were there college grads in Sunnyvale before Silicon Valley?
    —-

    And what kind of environment Tracy has to attract college grads? Tracyford University? University of California, Tracy? Oracle setting up shop there?

  45. Pralay Says:

    May 29, 2010

    “I’m thinking I want to buy outside of the current RBA and sell inside of the future RBA.“
    —-

    You are smart, SEA. You are ahead of Real Estater by seven months. Actually you can buy something in Bodie. Someday Oracle will set up shop there and “inevitable urban sprawl” will cross snowy Sierra and reach there. You know Bodie has Chinatown too! Pretty soon it will be New San Francisco.

  46. SEA Says:

    Please remind me, with prices so low in Bodie, how much could I lose?

  47. SEA Says:

    “E. Louise Sartor remembers the gold mining camp of Bodie, California, as a quite, friendly place where holidays–the Forth of July, Memorial Day, Christmas, even Chinese New Year’s–were celebrated by all the townspeople as merry family occasions.” (page 12)

    Just ignore that was originally published in 1952. Hopefully not too many 20-year bets were placed.

  48. Real Estater Says:

    nomadic says,
    >>He makes it sound like free money every month. No risk, no opportunity cost, no vacancy concerns or maintenance. Very simplistic.

    I thought I already explained everything:
    1) It doesn’t just sound like free money. It is free money. There is positive cash flow from day 1.
    2) What is the risk and opportunity cost that you’re worried about? That you will lose the pocket change?
    The down payment is cheaper than my car.
    3) Not too worried about maintenance on a house that’s barely out of warranty. By comparison, my 94306 property needed 10 grand to cover Section 1.

  49. Pralay Says:

    Please remind me, with prices so low in Bodie, how much could I lose?
    —-

    You won’t lose. It’s cash-flow positive from day 1. While Bodie becomes part of RBA as a result of “inevitable urban sprawl” (remember Bodie has Chinatown and that means rich Chinese folks already started buying up there), you can always visit ghost down to get a feel of history. And the ghost town is only 8 miles from Tracy.

  50. Real Estater Says:

    >>And what kind of environment Tracy has to attract college grads?

    What kind of customer base does Walmart have? Does Walmart make money or not?

  51. Tuno Says:

    House prices in Tracy still have a fair ways to fall. Maybe in 5 years it’ll be a good 10-year bet.

  52. Pralay Says:

    >>And what kind of environment Tracy has to attract college grads?

    What kind of customer base does Walmart have? Does Walmart make money or not?
    —-

    Thanks for admitting that comparing Tracy with Sunnyvale of 1990 is a bad analogy.

  53. Real Estater Says:

    Pralay,

    Looks like you finally found something you can feel superior toward. LOL, a renter in Santa Clara feeling he’s better than Tracy.Sure beats picking sour grapes on the wrong side of Middlefield!

  54. Pralay Says:

    Translation of #53: I f**ked up on my Tracy/Sunnyvale analogy.

  55. madhaus Says:

    Yeah all that new construction in Sunnyvale… when was that? D’oh! 1958!

  56. madhaus Says:

    Delisted and relisted for $589K, with much better photos. Pending as of 2/11/11.


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