For those who doubt that this area is still very much in demand, let's review a few recent transactions:
Spencer Court: 16 offers
Berry Ave: 3 offeres
Stanley Drive: 2 offers
just to name a few...
The point is, Los Altos does not have the same issues the rest of the country or the general area have with price erosion and drops in demand. Homes are still selling quickly, most in the first 2 weeks they're on the market. Those that don't sell right away are typically sold reasonably close to their asking price or at a price consistent with the dollars-per-square-foot for their neighborhood.
The key to getting a home is to be prepared. You have to know what you want, what you're willing to pay, which neighborhood(s) you want to be in, and if you'll have a contingency (selling an existing home). If you have a home to sell, do so FIRST! Get your home ready and put it on the market before making an offer on another home. That way, you have less risk of losing the deal.
Here's why this is important. If you make an offer on a home and the sellers accept it, you're in contract. However, until you release the contingency (sell your existing home) the new home will show as "Pending Release" in the MLS. That means that the sellers can take other offers and if they get an offer they like, they can tell you that you have 3 days to release your contingency or forfeit your offer. If that happens and your existing home isn't in contract with someone else, you most likely will have to forfeit your offer and lose the new home.
This is less of an issue if you're downgrading from a more expensive home to a less expensive home or selling a home in a high-demand area (Los Altos, Palo Alto, etc). No matter what, you should be prepared.