The old saying goes, "location, location, location" and this still holds true in the current market. the mitigating factor is also price.
There are currently 64 homes on the market and most of those are priced under $2.5M. Homes are not moving as fast as I would have expected but I believe that's due to current press about the economy and less about Los Altos in general. I will make a predication that the market sees at least 10 available homes get offers by next Friday. There are too many good opportunities out there to pass up.