Tuesday, February 1, 2011

Los Altos Hills - Earth Day Celebration

The town of Los Altos Hills will be holding it's annual Earth Day Celebration on April 17, 2011 from 1-4PM a the Westwind Community Barn.  This is a chance for local residents to showcase their green products.

As many local know, the town of Los Altos Hills is a "green" community.  They encourage the development of homes that use solar power, low-impact landscaping, reduce water and power consumption, and keep the overall carbon footprint small.  This event showcases local produce (there are a lot of farms and vineyard in Los Altos Hills), ideas, and other things that encourage being "green".

For more information on the event and to exhibit produce, technology, or ideas, take a look at this article on the Los Altos Town Crier website.

Friday, January 21, 2011

BusinessWeek Report on America's Richest Small Towns Is Wrong

Many of the high-end markets in California have made great strides in 2010.  Some markets that had been hit hard in 2007-2009 came back strongly in 2010 with solid gains in median and average selling prices.  A recovery of expensive real estate is important because when the high-end markets do well, the lower-tier markets do well too - usually because of move-up buyers.  So when the media decides to report on the health (or lack thereof) of the high-end markets I'm ready to jump in with facts!

BusinessWeek reporter Andrea Wong wrote an article entitled "In America's Richest Small Towns: Big sales Stall"  about high-end real estate sales in expensive small towns around America.  Local markets Los Altos Hills (where I frequently do business) and Woodside are always on lists like this.  In the article the writer states that the price of homes dropped 13.6% in 2010.  That's incorrect.  The average selling price dropped less than 1% and the median dropped about 5%.  Either way, the figures are wrong.

Assuming the writer was also including raw land, those values are even less in line with the article.  Land prices rose 13% in Los Altos Hills (based on 3 closed sales) but the median dropped 18%.  Those 3 sales (totaling over $5 million) have little impact on the average or median sales prices of property overall in Los Altos Hills so again, the article is wrong.

It's interesting that the article casts a pall over the entire high-end market by saying that 33 of the 50 towns on the list dropped.  Los Altos Hills ranked #4 on the list which makes it one of the more important towns upon which to base the statistics.  However, if one of most critical towns hasn't actually seen that much of a drop, it makes me wonder how far off the other figures are.

I myself have more than one client looking at homes priced $4-8 million and I know other agents who are writing offers with similar clients of their own.  This segment of the market is not as bad as this article portrays and we'll see a lot of activity in 2011.

Thursday, January 20, 2011

Bryan Robertson installed as Director-at-Large with SILVAR

I was sworn in last week as a director-at-large serving a 2-year term on the board of directors at SILVAR, the Silicon Valley Association of REALTORS.  This follows my previous service as Los Altos/Mountain View District Chair for 2010.  My primary focus will be on advancing the technology used by our agents including the MLS.  As part of my duties I'll also be helping to organize the next Tech Trilogy which is a 3-part technology education seminar series delivered to members of the association.

In addition to serving on the local board, I will be serving again as a director for the California Association of REALTORS.  My services there will include working with the Federal Committee and the Housing Affordability Foundation.  In the latter committee, I'll be helping to raise funds to ensure housing is available to those who can't afford it in the difficult California market.  In working on Federal issues, I'll do what I can to take on critical issues including the mortgage interest deduction.

Default Notices Drop In Santa Clara County

As most buyers know, there are very few default notices in Los Altos or Los Altos Hills.  Now we hear word that default notices are dropping again in Santa Clara County as a whole.  An article in the San Jose Mercury News reports that default notices (often mistakenly called foreclosure notices) dropped year-over-year in 2010, down over 33% to 10,052.  That's still higher than 2007 but it shows a trend driven by a stronger economy.

There are 11 properties in Los Altos with notices of default filed at this time.  Most of these will either have the default corrected (by bringing the loan current) or they'll be sold on the open market.  There are only 4 properties in Los Altos that have become "bank owned" or REO properties.  One of those has been on the market for a long time because it's in an undesirable location and the property condition has deteriorated considerably.  Poor locations are a common theme with foreclosed properties in Los Altos and Los Altos Hills.

Los Altos Hills has 3 properties with notices of default at this time.  The homes are a mix of moderagely sized homes (for the hills) and generally they will also be sold on the open market.  Recent REO homes in Los Altos Hills have been priced very low and some have gotten 50+ offers (many all cash) pushing the prices up to or close to market rates.

The market will see a few more of these in the coming year but the trend has been to sell these homes before they hit the market.  If you're looking for a bargain on foreclosed properties, there are two things to consider; location of the property and general market strength.  The properties that don't sell in the open market are usually in very poor locations which is why they stay REO for so long.  The rest sell at market rates because the market in Los Altos and Los Altos Hills have recovered substantially from years past.

Tuesday, January 18, 2011

Silicon Valley Real Estate Market Report

This is a quick update on the performance of several local markets around Silicon Valley.  As the statistics below clearly show, most markets showed nice price gains in 2010 including most of the luxury markets.  These figures indicate that the trend down has stopped and the trend up is beginning again. While the markets are improving, this doesn't mean we've entered a seller's market where prices will spiral upward in the hot spring market.

I expect that this year we'll see most markets improve in the 1-6% range again (depending on the market).  The hottest markets from last year will likely cool down a little this year and the softer markets will likely see larger gains this year.  What will drive these price increases includes corporate spending, job growth, and low interest rates.  As the high-tech industry continues to recover, move-up buyers from the lower end of the market will start entering upgraded markets such as Sunnyvale, Mountain View, and Cupertino.  Sellers from those markets will continue moving to Los Altos and Palo Alto further driving demand.

                                        2010 Market Summary Statistics
                                                  Average Selling Price
                                 2009                   2010                  Change
Los Altos                $1,654,914          $1,688,322              +2.0%
Los Altos Hills         $2,614,368           $2,590,416              -0.9%
Mountain View        $946,438              $956,709                 +1.1%
Sunnyvale              $714,442              $760,772                +6.5%
Cupertino               $1,121,641           $1,112,847              -0.8%
Saratoga                $1,557,682           $1,646,386              +5.7%
Palo Alto                $1,516,480            $1,557,004             +2.7%
Menlo Park             $1,239,814            $1,309,892             +5.7%
Atherton                 $3,317,045            $3,510,434             +5.8%

Development Concerns About First Street in Los Altos

Downtown Los Altos is at the forefront of major changes to build more offices, retail space, and residential units.  The area with the biggest developments in the near future is First Street.  The entire street was rezoned to allow residential, better retail, and more office space.  However, a recent article in the Los Altos Town Crier brings to light concerns about traffic congestion.

Personally, I'm with most people who feel that having a little traffic congestion is a sign of success.  It's rare that you can't find a spot unless there's a major event.  The loss of so many downtown businesses has made traffic and parking nearly non-existant.  The concerns about major traffic congestion on First Street and Main Street are based in the idea that downtown Los Altos should be a "sleepy little town".  Unfortunately, for the businesses to thrive, we need more people and that often, but not necessarily, means more cars.

Adding 48 condos on First Street will help downtown a little but it won't be enough to drive real growth.  It's a start.  Another 150-200 on top of that would create real critical mass and those residents would be foot traffic, not car traffic.  That's probably why the traffic study didn't show an appreciable increase even with all the new construction.  The question now is, where to add those living units.  The new zoning regulations approved in 2009 will allow for residential units above retail on Main Street.  That would be a huge step in the right direction but those residential units will mostly generate foot traffic.  The homeowners may have cars but with jobs and services right down town, the frequency of car traffic will probably be very low.

Saturday, January 15, 2011

Los Altos Loses Another Restaurant

Los Altos has lost another fine restaurant from it's line of greats - Zitune.  They shut the doors on Monday after determining that the patron traffic wasn't enough to stay in business.  The final dinner on Sunday night was bittersweet because many patrons showed up for one final meal at the 4-year old restaurant.  There was a nice story in the Los Altos Town Crier about all the reasons for ending the business.

I've eaten at Zitune many times and found the food to be creative and first-class quality.  The service was good and the staff welcoming.  The last time I was there in late November with a group, we had a mix of menu and special items that impressed everyone.  One thing that surprised me was that the restaurant was, in fact, relatively quiet for prime lunch time.

The busiest restaurants always seem to have a steady stream of people every day.  Some notable popular spots include Le Boulanger, Aldo, Spot Pizza, and Main Street Cafe.  While we need more good restaurants, one of the issues with getting critical mass is a lack of offices downtown with people wanting lunch.  There are plans for more offices on the table and construction has already started on the new Packard Foundation building on 2nd Street.  As more offices are built, we should have more foot traffic and hopefully that will translate into fewer good restaurants closing.

Friday, January 7, 2011

Los Altos Real Estate Market Summary Report for 2010

December was a busy month for Los Altos real estate.  I had posted an earlier report indicating that we had 29 sales that closed as of December 28th.  That figure is revised down to 26 as some homes sold were misreported.  There was one sale at $820,000 that I am not counting in the statistics for the month because it's considered a statistical anomoly.  It's less than half the average sales price and well below the normal sale range.

When removing that sale, the average selling price in December 2010 is flat compared to December 2009 at $1.61 million.  The mnumer of closed sales is the same at 25 and the inventory is slightly lower at 33 units, compared to 38 units in December 2009.Total sales volume was up about 8%.

There were a few homes that expired on December 31 at midnight so the actual inventory dropped a little as of January 1st.  Those homes could come back on the market in the next few weeks.  A number of homes were taken off the market in December and are starting to come back on.  One property in South Los Altos has come back on with a 6% price reduction.

As expected, the average selling price and median selling prices are up in 2010 versus 2009.  The average and median for 2010 were $1.688 million and $1.55 million respectively.  The average and median in 2009 were $1.654 million and $1.51 million respectively.  These are small increases but they show that the market has recovered and we're now in a balanced market, it is neither a buyers nor sellers market - in general.  It is still a buyers market at the high-end for homes priced over $3 million.

The total number of new listings were about the same, 437 (2009) versus 440 (2010).  The days on market dropped quite a bit from 65 to 54 in 2010.  The total number of closed sales rose significantly from 269 to 334 in 2010.  All the figures support a full recovery in the Los Altos area.  This should help the general market in surrounding areas as well by bolstering confidence in a prime market, move-up markets nearby such as Mountain View and Sunnyvale should improve as well. 

The improvement in the average selling price of about 2% is indicative of where the market will continue to go.  The balance of buyers and sellers should keep prices moving up and discounts have all but disappeared.  The current low inventory and lack of new listings indicate a potential squeeze in Q1.  That will become more clear as we finish out January.

Los Altos Hills Market Summary Report for 2010

Los Altos Hills has been having a rough few years recently.  Homes that were listed for $5 million end up selling for less than $3 million and multiple listings were on the market for 18 months or more.  Fortunately, that trend seems to have slowed substantially in 2010.  As noted in my price analysis of homes in the $2-3 million range a few months ago, the market seems to be favoring older homes with lower prices but a high price per square foot than new homes.  This is showing up as an increase in total sales volume and units but at a lower average selling price.

There were 81 closed sales in Los Altos Hills in 2010 versus 68 in 2009, an increase of about 20%.  The average days on market was 120 in 2010 versus 98 in 2009, an increase of about 20% as well.  The substantial increase in volume is most telling.  The spike in the days on market figure can be attributed to a few homes that sold after being on the market a long time.

The average selling price was $2.59 million in 2010 versus $2.614 million in 2009.  That's a drop of less than 1%.  This means that Los Altos Hills has reached a certain level of partity between buyers and sellers with a slight bias to buyers.  Based on annecdotal feedback I'm hearing about open houses and offers on some properties, I expect that the shift will continue to turn in favor of sellers.  Where buyers will still have control is at the high-end of the market.  Anything priced over $3 million is fair game for sellers if it hasn't been priced well.  At the really high-end, homes priced between $4 million and up to $15 million or more the buyers are in control.  Very few of those homes are selling and while sellers are not desperate to sell, buyers are not anxious to buy.  The impass is creating a stalemate with sales and homes are not selling regardless of discounts.  Many high-end homes have seen price drops of $1 million or more and had no offers.

There were several homes taken off the market in December 2010
, so expect to see a small spike in inventory in January as those come back on the market.  About 15% of December inventory was removed with explicit intent to relist in 2011.  Many of those homes were priced in segments of the market that are doing well.

Based on the performance the market in Q4 and overall for 2010, I expect that 2011 will see Los Altos Hills continue to recover with average prices moving up 2-3% for the year just as they did in Los Altos last year.

Thursday, January 6, 2011

The Vision for the Future of Los Altos

A recent article in the Los Altos Town Crier talked about all the changes implemented or started in 2010 that will come to full fruition in 2011 and beyond.  All the changes are designed to modernize the town and make it competitive to other nearby communities.

Los Altos has been a sleepy little town for a long time.  Much to the chagrin of locals, the town has been kept in a state of "Mayberry Syndrome" for decades falling well behind the development of other local towns including Los Gatos, Mountain View, and Burlingame.  The small shops typically close by 6PM, leaving the town nearly empty on most nights.  There is no "critical mass" to the distribution of restaurants so the typical synergy you get with restaurants and shops isn't available.  In 2010, all that small town feel was dismissed in a sweeping series of changes set to make Los Altos a true destination.

I had reported months ago that someone was buying large parts of downtown Los Altos.  Many felt it was a prelude to a developer using the new multi-story zoning laws to rebuild large parts of the downtown to make it more like Santana Row, with residential or office space above retail.  Knocking down several buildings, especially smaller ones, to make way for wider buildings would enable chains to enter the downtown.  While old residents and power brokers have spent years stopping introduction of chains, small chain stores would bring new revenue and foot traffic to an otherwise quiet town.

We also need a little more style and that is coming with the new developments approved in 2010.  Abigail Ahren's new luxury hotel at the corner of San Antonio and Main Streets will make that gateway entrance to Los Altos beautiful instead of just a dusty sandlot.  Other projects include housing and offices along First Street that will transform that area as well.

The activity with new zoning, increased developer activity, and many projects going before the Planning Commission should result in a substantial number of improvements in Los Altos over the next year and into 2012.  All these changes will have a lasting impact by making Los Altos a more desirable destination town.