Do the weekly headlines about Silicon Valley real estate leave you wondering what they mean for your Los Gatos block? You are not alone. The right stats can help you time your move, price with confidence, and negotiate smarter. This guide breaks down the four numbers locals watch most and shows you how to apply them to your price point and neighborhood. Let’s dive in.
The four stats locals watch
Months of Inventory (MOI)
MOI tells you how long it would take to sell all active listings at the current sales pace. Formula: MOI = Active listings / Average monthly closed sales. Many brokerages use these thresholds:
- Under 3 months: strong seller’s market
- 3 to 6 months: balanced market
- Over 6 months: buyer’s market
In Los Gatos, small sample sizes can swing MOI quickly. Break it down by price band and property type because luxury tiers often have higher MOI than entry-level homes. Seasonality matters, and spring often pushes MOI lower.
Days on Market (DOM)
DOM counts the days from listing to contract acceptance. Median DOM is usually more useful than the average because a few slow sales can skew the mean. Very low DOM often signals multiple-offer conditions, while rising DOM suggests more room to negotiate.
In Los Gatos, DOM can reset if a listing is withdrawn and re-listed, depending on MLS rules. Higher-priced homes and properties needing work typically sit longer. Compare DOM within the same neighborhood and price band instead of town-wide averages.
List-to-sale ratio
This is the sale price divided by the final list price, often shown as a percentage. Above 100 percent means homes sold over list. Near 100 percent means list prices matched the market. Below 100 percent means buyers negotiated under list.
In Los Gatos, strategy impacts this stat. Some sellers price low to spark bidding, which pushes ratios above 100 percent. Concessions and private deals can change the true net outcome, so align your comparisons to either original list or last list price and use the same approach every time.
Price per square foot ($/sq ft)
This is the sale price divided by the home’s gross living area. It is a fast way to compare similar homes in a small area. Higher $/sq ft can reflect location, lot use, views, and finish quality.
In Los Gatos, definitions of living area vary by data source. Lot size, bedroom count, and single-story layouts can change usable value per square foot. For the best read, compare similar homes and focus on medians within your price range. Very small homes and very large estates can skew the average.
Local context that shapes the numbers
Los Gatos is a smaller, affluent market, so the number of monthly sales is limited. A few closings can move medians and MOI, which makes rolling averages more reliable than single-month views. Demand often clusters by school-district boundaries, proximity to downtown, hill views, and larger lots. Buyers tend to weigh neighborhood and school catchments heavily when deciding where to focus.
Housing stock is diverse. You will see older ranch homes, mid-century designs, newer rebuilds, and high-end remodels. Renovation quality creates price gaps even for homes with the same square footage. Price tiers behave differently too. Below roughly 2 million dollars you may see faster movement, while the 3 to 4 million dollar range and above can post higher MOI and longer DOM. Seasonality is real. Spring is usually active, and late fall and winter can soften. Interest rates and tech employment cycles can also influence urgency and listing volume.
Use shifts to your advantage
Reading MOI for timing
If MOI drops under about 3 months in your price band, expect competition and fast timelines. Buyers should prepare clean offers, strong pre-approvals, and tight contingency periods if they want to win. If MOI rises above 6 months, buyers have more leverage, while sellers should lean into pricing precision, staging, and small repairs to stand out. Watch the trend over 3 to 6 months, not just a single spike.
Reading DOM for pace and leverage
A falling median DOM signals quick movement. Sellers can list with confidence and aim for shorter timelines. Rising DOM means buyers are more selective. Sellers may need to adjust price or offer concessions, while buyers can ask for longer contingencies and more thorough due diligence.
Reading list-to-sale ratio for strategy
When ratios hold above 100 percent for several months in your segment, expect bidding and escalation clauses. Sellers can price near market and still generate strong activity. When ratios dip below 100 percent, buyers can negotiate and request credits. Sellers should consider targeted price changes and improved presentation to justify value.
Reading $/sq ft to validate value
Use $/sq ft to cross-check pricing against similar homes. If a listing sits well above the area’s median $/sq ft, look for premium features like new kitchens, expanded living space, or a prime lot. Sellers can invest in high-impact improvements such as kitchens and baths to lift perceived value. Buyers should consider lot size, age, layout, and condition along with $/sq ft to avoid hidden costs.
Combine the signals
A strong seller signal looks like low MOI, low DOM, and a list-to-sale ratio above 100 percent. In that setting, buyers need strong financing, fast decisions, and clear terms. A softening signal shows higher MOI, longer DOM, and ratios below 100 percent. Buyers can seek price reductions and credits, and sellers should price to the market and fix visible issues before listing.
Build a simple tracking routine
- Segment before you analyze. Separate detached homes from condos and townhomes. Split by price bands and neighborhood or school-district area.
- Use medians and rolling averages. A 3 to 6 month rolling median helps smooth a small market’s ups and downs.
- Verify square footage. Use consistent sources for GLA when comparing $/sq ft, and note any differences between MLS, assessor, and appraiser figures.
- Note concessions and list-price changes. Track whether you are using original list or last list price so your comparisons stay apples-to-apples.
- Watch for outliers. Flag tear-downs or very large estates when building neighborhood comparison sets.
Common pitfalls in Los Gatos
- Calling a trend too early. One month does not make a trend in a small market. Wait for several months of consistent movement.
- Relying on town-wide averages. Always check your price tier and property type.
- Ignoring net proceeds. Sale price without credits or repairs can misstate seller strength.
- Mixing measurement methods. Keep DOM and list-to-sale definitions consistent across your data.
- Overweighting $/sq ft. In Los Gatos, lot size, views, layout, and renovation quality often matter just as much.
When local expertise pays off
You can learn a lot from these stats, but the right strategy still depends on your exact block, price band, and home condition. If you want a tailored read on the numbers and a clear plan to list or buy with confidence, reach out to Brian Flack. Get your instant home valuation and a data-backed path to your next move.
FAQs
Does county MOI apply to my Los Gatos street?
- County-wide MOI blends many markets and price tiers, so it may not match your street. Check town-level and price-band MOI before making decisions.
What is a healthy DOM for Los Gatos listings?
- It depends on price and property type. Lower-to-mid price bands can post single-digit to low-teen median DOM, while luxury and hillside homes often take longer.
Is price per square foot the best value tool?
- It is helpful for quick checks among similar homes, but pair it with lot size, condition, permitted square footage, and neighborhood context.
How fast should I act if MOI drops in my segment?
- When MOI falls sharply in your price band, be ready with solid financing, fast due diligence, and competitive terms to win.
Why do some Los Gatos homes sell over list price?
- Strategic underpricing and multiple-offer competition can push sale prices above list. Limited inventory and buyer urgency can amplify this effect.
