Thursday, December 20, 2007

Sales strong, inventory low

It's been a while since my last post but in that time, the typical December pattern has continued on. The inventory of single-family homes in Los Altos is 28 which is about 2/3 of what it was last year. We have had a few new homes come on the market in the last couple of weeks including a nice new home on Benevenue priced at $2.898M. However, the homes priced under $2M have sold the fastest and there are only 6 homes left under $2M.

The sales activity is also strong. Homes that are priced well have still sold quickly including a few new listings that sold in about 10 days. A good example is the home on La Prenda. It sold fast because it was priced well. The listing price was $1.325M and it sold for $1.5M. For you future sellers out there, consider asking for less - you'll usually get more.

Tuesday, November 27, 2007

Is it really that bad? Hmmm, not at all...

Faux Foreclosure Scare
If you watch the news, read stories online or read the paper, your impression is that the country is in the worst real estate depression since the 1930s. However, keep in mind a few facts:

1) Most foreclosures are in areas that were "hot" for speculators (California, Nevada, Florida) and those speculators are walking away from their mortgages
2) 35% of the homes in the U.S. have NO MORTGAGE
3) Foreclosures in California are primarily in overbuilt markets such as the central valley and "outlying" areas that aren't considered "prime".

Here's a news story that gives a perspective:

So, how many foreclosures have there been in Los Altos this year? Less than 10. Out of about 9000 homes, we've had less than 10 foreclosures. That's about 1/10th of 1 percent. Cause for panic? Not quite.

Real Estate Prices As A Rollercoaster Ride
Check out this graphical representation of real estate prices over the last 90 years. Pay close attention to the last 10 years. It makes you wonder what the press agenda is reall about with all the "bad news".

Inventory Update
As of today we have 31 single-family homes on the market in Los Altos down from 39 a week ago. There is only one new house on the market on Estate Drive. I expect inventory to continue to drop through December as strong buyer demand continues and sellers wait until the spring.

On a side note: the number of short term rentals in the area (terms of 3-4 months) in increasing.

Sunday, November 18, 2007

Going, going, gone!

Inventory Update
Inventory is down to 39 single-family homes which is a steep decline from two weeks ago. Expect to see the number continue to drop and listing agents advise their clients to wait until 2008 to sell and buyers anxious to move before the holidays snap up whatever is left.

Multiple offers are still the rule in Los Altos with the homes on La Prenda and Spencer getting several offers over the asking price. This bidding strength, while hard on buyers, shows how strong the local market is and how unlikely we are to see any serious price erosion in the "Under $2 million" bracket.

More New Construction
Framing is moving along nicely on the new 7000 square foot home going up on Glen Alto. This project is on the fast track and should be done in time for the hot 2008 season. The home features expansive living space with efficient use of yard space and underground parking.

Open House Traffic
The number of people coming through open houses in the area is still strong indicating that there are a lot of buyers. Surprisingly, about half of the people I've met have been new to the market - meaning they've starting looking within the last month or so.

Tuesday, November 13, 2007

Los Altos available homes down to 43 today

Inventory is down!
One home sold but two others were taken off the market including the home at the corner of St. Joseph and Foothill Expressway.

New Construction
Take a look at the house on Riverside Drive and the one on the flag lot off Cuesta next to the church at the corner of Cuesta and El Monte. Both are making progress and should be on the market early next year. The asking price on the Riverside property will be about $3.5M.

Coming soon!
A nicely remodeled house in South Los Altos in the Highlands area. Right now there's nothing available over there and this house should sell quick. The price will be close to $2M. Overall, new listings will be lean in coming weeks.

Tuesday, November 6, 2007

So, how'd that 1/4 point do?

Well, my predication of a quarter point rate drop came true. So, what does that mean for Los Altos real estate? I expect appropriately priced homes under $2.5 million to sell relatively fast, even during the winter months because the Fed is done with interest rate cuts and buyers will start to believe that we've "hit bottom".

As of today, there are 51 single-family homes on the market in Los Altos which is down from 53 last week. There are five (5) new homes on the market since last week and of those, four (4) are priced under $2 million. One home that went on sale at $1.662 million sold in one day. So, we should see inventory drop under 50 units this week and once that happens I think buyers will see that what they have to choose from is limited and that if they like something, they should buy it now!

What does appropriate pricing mean? In Los Altos it means that if the comparable sales in your neighborhood are $1.5 million, don't price your house at $1.7 million not matter how much nicer you think it is. Why, you say? Bryan, aren't you going to sell my house under market value?

NO! The key to pricing is to make it attractive to as many potential buyers as possible, even the ones who aren't really going to make an offer. Why? Because perception is reality. If the desirability of your home appears high, then it will be high and the winning offer will subsequently be high.

Tuesday, October 30, 2007

It's a buyer's market, but not for long

This is a great time to be a buyer. Interest rates are low, inventory is high, and prices on some properties are coming down. This is the kind of opportunity every buyer looks for. So, how long will it last? Not long.

The inventory of single-family homes in Los Altos as of last Friday was 53 homes. This is about 70% of the inventory in the same week last year. More importantly, inventory is dropping. That means that the ability for buyers to strike a bargain is dimishing. It all comes down to seller motivation - if they want to sell, they will. If they don't, a low offer won't fly. Some sellers are actually backing out of transactions. So, know what you want and buy it while you can.

I'm projecting a 1/4 point drop. Others are saying 1/2 point drop. Either way, it's a win for all buyers and owners with variable-rate mortgages.

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Monday, October 22, 2007

Another busy weekend

I had two open houses this weekend. The first was a 1 bedroom condo in Mountain View priced at $349,000. I had four people through in the three hours it was open and only moderately serious buyers.

The second open house was a 3800 sq. ft. home in Los Altos Hills that was recently reduced to $1,998,000. I had almost 100 people through and several of those were seriously interested including one of my clients.

Here's what I heard from people consistently; when are they taking offers and will they take a lower price?

Here's what's interesting about that. Buyers have been conditioned in this area to enter competitive bidding situations - multiple offers. However, contrary to that, they are looking to offer less than the asking price. What the buyers are missing is that the sellers DON'T have to sell and many are unwilling to reduce their price.

Most homes are selling at or above asking price and only a few are being sold under. These homes are usually overpriced to begin with. The perception is that prices are dropping, when they aren't. A well priced home will sell quickly, no matter what the market conditions.

The key to keep in mind is that if you're buying a home and plan to stay, Los Altos, Los Altos Hills, and most nearby cities will continue to go up as they have in the past. This time of year is a particularly good time to buy but inventories are low compared to last year and good deals will get snapped up fast.


Friday, September 28, 2007

Weekly market update

As of 10:30PM 9/28/07

Number of single-family homes available in Los Altos: 53
Average days on market: 23

What's selling: Homes priced under $2,000,000 are selling quickly
What's not selling: Homes priced over $3,000,000 are taking weeks or months to sell

Contrary to what the local and national media would have you believe, the local market is still very strong. However, caution prevails with both buyers and sellers. After the Fed dropped interest rates, mortgage rates actually went up. This has caused buyers to reduce their offers and multiple offer scenarios to diminish.

The key to successfully selling in the current market is ensuring the property is in the best possible condition (within reason) and is priced correctly. This means NOT pricing it at what your neighbor sold his or her house for and NOT pricing it for what you expect to eventually sell it for. Pricing under the market WILL generate multiple offers as has been seen on several recent Los Altos sales. If you want to know how this works in more detail, call me and I'll be happy to explain it.