Campbell gives away the one thing Los Gatos charges a million for

Here is a question I could not answer for most of this year.

Why does a house four blocks from downtown Campbell — walking distance to the farmers market, the restaurants on Campbell Avenue, the light rail — sell for about the same as a house two miles away on a busy street with an apartment building on the corner?

In most towns, that is not how it works. You walk toward the good part and the prices go up. In Campbell they mostly just sit there.

So I pulled the sales and compared Campbell to Los Gatos. Not the whole market — that comparison is useless, because Los Gatos has hillside estates on acre lots and Campbell does not. I compared only normal lots to normal lots: parcels between 6,000 and 10,000 square feet with houses between 1,000 and 2,600 square feet, in both towns, sold since January 2023. Regular houses on regular lots. The kind most people actually buy.

Then I split each town into two groups: homes you can walk to downtown from, and homes you have to drive.

The number

The whole argument in one picture. The Campbell bar barely moves between walk and drive; the Los Gatos bar drops more than $440,000.

Two things in that table, and the second one is the strange one.

First: if you want to walk to a downtown, Los Gatos charges you about a million dollars more than Campbell for the privilege — on the same size lot, with a similar size house. The median walkable Campbell lot in this group is 7,778 square feet. The median walkable Los Gatos lot is 7,606. Same dirt. Million-dollar difference.

Second, and this is the part I could not get out of my head: look down the Campbell column. The walkable homes sold for less than the drive-to homes. $1,942,500 against $2,000,000.

Campbell does not charge for walking distance to its own downtown. It gives it away. In Los Gatos, the same walk is worth about $443,500.

What that means in plain terms

Think about two nearly identical houses.

One is on a 7,600-foot lot a few blocks off North Santa Cruz Avenue in Los Gatos. You can walk to dinner. It sells for roughly $2.98 million.

The other is on a 7,800-foot lot a few blocks off Campbell Avenue. You can also walk to dinner — to a downtown with a Sunday farmers market, a dozen restaurants, a light rail station, and a creek trail. It sells for roughly $1.94 million.

Same house. Same lot. Same walk. A million dollars apart.

Those are the two downtowns. Both walkable, both with restaurants and shopping, both with a farmers market. One of them is attached to houses that cost a million dollars more.

Some of that gap is real and I am not going to pretend otherwise. Los Gatos schools, the town's brand, the mountain backdrop, thirty years of reputation. Those things are worth money and they are not going away.

But a million dollars on a matched lot, when the gap between the same two towns drops to $534,000 as soon as you step outside walking distance? That says the premium is not really about Los Gatos being Los Gatos. It is specifically about walkability — and Campbell has walkability it is not being paid for.

Where this actually is, in streets

Forget the mile measurements. Here is the map in language you can drive.

The walkable zone in Campbell is roughly the area inside Hamilton Avenue to the north, Bascom Avenue to the east, Winchester Boulevard to the west, and Latimer Avenue to the south — with the water tower and Campbell Avenue at the center. If you can see the water tower from your street, you are in it.

Inside that zone there are two very different kinds of block, and this is what I kept noticing from the car.

There are the streets everybody already knows are good — the blocks near the Pruneyard and Dry Creek, and the stretch just north of Campbell Avenue on Central, First and Second. Those trade like people know what they are.

Then there are streets four blocks away with bigger lots and deeper backyards that trade like they are somewhere else entirely. North Milton. Hardy. The blocks off Campbell Avenue heading west toward Winchester. Same walk to the same downtown, noticeably more land, and the prices do not reflect it.

That is not a subtle effect you need a spreadsheet to see. It is the difference between a house that is priced like it is near downtown and a house that is priced like it is near nothing.

Two houses on the market right now

Two active listings show both halves of this.

313 N Milton Avenue — $2,699,888

Three bedrooms, three baths, about 1,661 square feet on a 9,620 square foot lot. Built 1950, updated. Just under a half mile from downtown Campbell — a nine or ten minute walk to Campbell Avenue.

The thing to notice is the lot. At 9,620 feet it is nearly a quarter larger than the typical walkable Campbell parcel in my sample. This is the version of the trade where you are buying land inside the walkable zone, and land inside the walkable zone is the exact thing Los Gatos charges a million-dollar premium for and Campbell does not.

Put that same lot, that same walk, and that same house on the other side of Highway 17 and you are not having a conversation that starts with a two.

See 313 N Milton on the Campbell Market

244 Darryl Drive — $2,398,000

Four bedrooms, two baths, about 1,785 square feet on a 6,300 foot lot in north Campbell, near Hamilton and San Tomas. Built 1973, fully renovated. About three quarters of a mile out — a long walk or a three minute drive.

This one is a different trade and I want to be straight about it. The lot is average sized, and per square foot of land it is priced above the Campbell norm, because you are paying for a finished renovation rather than for dirt. That is fair — someone did the work.

Where it looks good is against Los Gatos. At about $1,343 per square foot of house, it is priced below what comparable Los Gatos homes outside walking distance have been getting, which is closer to $1,424. If what you want is a house that is genuinely done — where you are not spending your first two years on permits and contractors — this is a finished product at a Campbell number.

See 244 Darryl on the Campbell Market

One is a bet on land. The other is a bet on not doing the work yourself. They are both reasonable and they are not the same bet, and the fastest way to overpay in this market is to not know which one you are making.

The same trade, in two houses you can go see this weekend

Everything above is medians. Here are two homes actually on the market right now, one in each town, both inside walking distance of their own downtown.

Read the lot row again. The Los Gatos house sits on a parcel 30% smaller than the Campbell house, is farther from its downtown, and costs $1,298,112 more.

Per square foot of land, Los Gatos is charging $592 against Campbell's $281. More than double, for dirt inside walking distance of a downtown.

Now the fair part, because these are not the same house. The Johnson property is a restored 1891 Victorian with five bedrooms and 600 more square feet of living space, and somebody has clearly poured money into it. It should cost more. But it should not cost $1.3 million more while sitting on 30% less land, and the difference between those two statements is the entire subject of this article.

See 135 Johnson on the Los Gatos Market

Being honest about the limits

A few things you should know before you take any of this to the bank.

The walkable groups are 28 sales in Campbell and 30 in Los Gatos. That is enough to see a million-dollar gap clearly, but not enough to tell you what any single house is worth. The drive-to groups are much larger — 175 and 148 — and I trust those numbers more.

Distances are measured straight-line from each downtown, not by sidewalk. A house 0.7 miles away with a highway between it and the restaurants is not really walkable, and this measurement cannot tell the difference. Use your own feet.

And the biggest one: this is about neighborhoods, not houses. A busy street, an apartment complex at the corner, a bad floor plan, or a roof at the end of its life will all cost real money, and none of them show up in a median. Some of these Campbell blocks are cheaper for reasons you can see from the sidewalk. Go look.

What I would actually do

If you are buying: look hard inside the walkable Campbell zone, particularly at the streets that are not the obvious ones. The market is not currently charging a premium for being able to walk to Campbell Avenue. Every comparable town charges one. You are buying something that is being given away.

If you own there: you may be underestimating your house. If you have been pricing off what the neighbors got, and the neighbors sold into a market that does not value your location, you have been anchored to the wrong number.

If you are choosing between the two towns: outside walking distance, the gap narrows to about $534,000 and a lot of that is schools and brand. Buy where you want to live. Inside walking distance, the gap is a million dollars on matched dirt, and I do not think there is a million dollars of difference between those two walks.

Campbell has a real downtown, a farmers market, a creek trail and a light rail line, and its housing market currently prices all of it at nothing. Either the market knows something I do not, or it has not caught up yet.

I have been driving these streets for a year. I think it is the second one.