Sunday, October 31, 2010

Early Market Report for October - Los Altos Hills Real Estate Sales

October was a great month for the Los Altos Hills real estate market. One sale over $8 million has definitely skewed the numbers higher across the board. There were only 8 sales but that's actually more than normal so even more good news!


Sales Over $2 and $3 Million

There were 3 sales over $2 million and each was very close to their asking price. There was 1 sale over $3 million and it was also very close to its asking price. Those are critical for the stats in Los Altos Hills because the market in the $2-3 million market band has had trouble still this year. One month is not a trend but it could bode well in establishing 2010 as a turning point in the high-end market of Los Altos Hills.


Averages Doing Well

The average listing and sales prices were $3.4 million and $3.01 million respectively. While it would appear from those numbers, which are higher than average, that homes are getting 10% discounts, that's not true. The home that sold for $8.2 million was listed at $10.9 million so it's skewing the numbers. In fact, all the other homes sold for close to their asking prices. This would seem to indicate that homes priced well are in fact getting solid offers.

The average days on market was also high at 102 but again this number is skewed by the 524 days on market that the $8.2 million house sold in. Los Altos Hills has seen the average days on market getting stronger recently so this will set that trend back a little.


Price Per Square Foot

This is an often quoted figure by people shopping in Los Altos Hills. However, the vast majority of buyers use the figure incorrectly. You can't compare the price per square foot for a 3000 SqFt home to one with 6000 SqFt. It's not a linear progression and never has been. Other factors including comparing new, old, and remodeled homes also skew this figure. This month has some good examples. the $8.2 million home sold for $751/SqFt while a home that sold for $1.875 million was $1257/SqFt. One was old and small, the other newer and much larger. Buyers need to get a proper market analysis to get a realistic view of how well a home is priced.

Early Market Report for October - Los Altos Real Estate Sales

October is looking like an incredible month after a slow September.  There are 32 homes with close of escrow dates in October which is substantial.  The average selling price for the month is $1.993 million which is a substantial spike over September.  Here are a few standout transactions.

Sales Over $3 Million
Los Altos had 4 properties listed over $3 million that were set to close this month and of those, 2 actually closed over $3 million, one was within $15,000 of that mark, and the last was at $2.775 million.

Sales Over $2 Million
Los Altos had 8 properties listed over $2 million and all of them sold for over $2 million.  This is huge for this market segment because as I had reported in September, homes in this price range have been selling with no up or down movement.  We'll see how sales this month change the course of median and averages in this critical high-end of the Los Altos market.

Days On Market
This figure will see a skew to the high side in the October stats as well as month-over-month, and possibly Q4.  This is because 4 homes had days on market over 200 days each.  The days on market for October was 61 but with 25% of the properties sold having 100 or more days on market, it's a little higher than most. Quick look at the results shows that most homes sold in less than 30 days with many selling in 2 weeks or less.

Friday, October 29, 2010

Hot New Home in Los Altos 10/29 - Happy Halloween

1365 FAIRWAY DRIVE, Los Altos 94024
MLS# 81052109
Listing Agent: Kirk Mahncke, Coldwell Banker
List Price: $1,895,000
Days On Market: 2
Bedrooms: 3
Bathrooms: 3
Living space: 3,007 SqFt
Lot size: 27,720 SqFt
Age: 63



Bryan's Opinion: The Country Club neighborhood of Los Altos is always in demand when you get a nice lot size combined with a great home. This home is in great condition and in an excellent location with a very large lot size, even by Country Club standards.


What's most compelling for this home is that you get a lot of house for the money and the lot size gives you the option to build a larger home when the time is right. After all, this is an older home that has been remodeled. That said, the price is a challenge with only 3 bedrooms, in my opinion. I could also make the argument that the price is right due to home and lot sizes. Tough call but still a great house.

Thursday, October 28, 2010

Hot New Home Los Altos Hills 10/28

14414 SADDLE MOUNTAIN DRIVE, Los Altos Hills 94022
MLS# 81051923
Listing Agent: Jim & Jimmy nappo, Alain Pinel Realtors
List Price: $2,295,000
Days On Market: 1
Bedrooms: 4
Bathrooms: 3 1/2
Living space: 3,573 SqFt
Lot size: 84,942 SqFt
Age: 27



Bryan's Opinion: I'm not a fan of this area of Los Altos Hills because it's so far away from the town and it's too close to Hwy 280. That said, this is an excellent opportunity to get a large chunk of land with a nice house and Palo Alto schools.


When the listing includes MFA and MDA figures in the public comments, that tells me that the seller and/or agent feel it is best bought by someone who is looking at future development. I agree with that. With close to 2 acres, this is definitely a good home for someone who wants to build a true compound or estate. It's definitely value priced and should get a lot of interest fast with a relatively quick sale.

Tuesday, October 26, 2010

Los Altos Hills Real Estate - Price Drop of the Week

24855 PROSPECT AVENUE, Los Altos Hills 94022
MLS# 81044501
Listing Agent: Edward Graziani, Sereno Group
List Price: $2,585,000
Days On Market: 48
Bedrooms: 4
Bathrooms: 3
Living space: 2,850 SqFt
Lot size: 43,560 SqFt
Age: 51



Bryan's Opinion: This is a great house in a neighborhood with truly world-class homes. Nearby Morgan Manor, a fixture in Los Altos Hills history, is in direct view from the back of this home along with San Francisco, Oakland, and the Bay. The price was reduced today and, considering those views, it's now quite a deal.


In addition to having great views, the home has been completely upgraded in 1997 and the lot is relatively level for such a Los Altos Hills location. While some people may not be fond of the small downslope driveway, the pros outweigh the cons, especially at this new price.

Monday, October 25, 2010

Halloween Fun in Los Altos

If there's one thing Los Altos does well, it's celebrate holidays and throw parties.  Halloween is no exception.  As the start of the holiday season, the town has a tradition of hosting an in-town trick-or-treat event designed just for kids.

This Friday from 12-4PM in downtown, kids can walk into particpating stores and collect a piece of candy in teh grand tradition of Halloween.  In addition, from 2-4PM there is a street party at Second and State streets usually with face painting, balloons, crafts, kids rides, and more.  It's a lot of fun, especially for younger kids new to the whole Halloween experience.

Afterward, there are plenty of restaurants to visit so your stay in Los Altos can be extended a little longer.

This event, as with many others in downtown Los Altos, is hosted by the Los Altos Village Association.  I've been a member of this group for a while and appreciate their on-going efforts to support downtown businesses and the community.  For more information, visit their website.

Los Altos Foreclosure Update - October 2010

During my most recent open house I had a few people ask if I was aware of any foreclosures in Los Altos or Los Altos Hills.  I said yes but also pointed out that very few homes ever become REO (bank owned) property in Los Altos or Los Altos Hills for several reasons including:

Strong buyer demand
Ability to sell as a short sale
Significant equity in the home

So, will you get a deal on a foreclosure in Los Altos or Los Altos Hills?  Not likely.  Why?  Because the homes that are listed as short sales that have eventually become REOs are usually in poor locations and didn't sell in the open market for a reason.  One street in Los Altos Hills that has been a few of these is Elena Road.  The homes that have had trouble selling there have been close to 280 and priced too high.  The banks have been unwilling to reduce the price they take so the homes languish.  The short sale home on Lincoln Ave is in disrepair so potential buyers will have to look past the potential repair costs to get a good value.

Los Altos - Foreclosure vs. Short Sales Deals
One home that recently transitioned from short sale to foreclosure is facing the same issue that others have, the buyers want a deal but the bank won't reduce the price.  One home in South Los Altos on Richardson Avenue has been on the market for a long time but the bank won't take less than the asking price.

The few foreclosed homes that have come up in Los Altos Hills include a couple that were underpriced on purpose (under $1 million) and ended up receiving dozens of offers hundreds of thousands of dollars over the asking price.

Can You Get A Deal In Los Altos?
You may but don't count on it.  As I said, the few homes or properties that have become REOs are usually in poor locations and not the best investment.  The ones that have come up in good locations sell quickly at market rates.  If you're looking to save money on a home in Los Altos, I recommend looking at homes that have been overpriced and negotiate with the seller on a value in line with the market.  Remember, prices are trending up slowly in Los Altos so buying before the Spring push could get you a great deal!

Wednesday, October 20, 2010

Hot New Home in Los Altos 10/20

1525 KENSINGTON CIRCLE, Los Altos 94024
MLS# 81050843
Listing Agent: Donna LaCroix, Coldwell Banker
List Price: $1,985,000
Days On Market: 1
Bedrooms: 4
Bathrooms: 3
Living space: 3,061 SqFt
Lot size: 19,215 SqFt
Age: 51



Bryan's Opinion: This is one of the most coveted streets in Central Los Altos and properties rarely become available.  It offers lots that are substantially larger than most in Los Altos and the privacy is hard to beat.  This home is at the end of the cul-du-sac which makes for even more privacy.  While the location is at the farthest southern section of Central Los Altos, it still offers Los Altos schools and easy access to both 280 and 85.


While this home is not upgraded as much as other nearby homes, it is still on a larger lot and has comparatively more square footage.  With such a convenient location, privacy, lot size, and more as pluses for this home, I expect this to get a lot of attention.  I'm a little concerned about the price but not too much .  We'll see how it goes during tour on Friday.

Los Altos Hills Real Estate Market Report for September

Mixed Average and Median Prices
For the month of September, 2010 the average sales price (ASP) in Los Altos Hills was $2,670,000 compared to $2,062,500 in September 2009. That's an increase of 29%. While that appears to indicate that the high-end market is on fire, it isn't.  I did a price analysis of homes selling in the $2-3 million range and the market is still having difficulty.  The median sales price in Los Altos Hills for September 2010 was $2,540,000 versus $2,297,500 in September 2009. That's a respectable 5.5% increase.  However, I'm not a fan of median prices so this is merely a reflection of a single month and not the year.  Yes, the market is doing better but not quite as good as these figures would suggest.


Sales Volume Was Down
Los Altos Hills had 7 closed sales in September 2010 versus 8 in the same period of 2009. The number of days on market went up, from 83 days last year to 125 days this year. Many homes that have been on the market a while have finally sold and it's skewing the numbers.

Inventory Is Flat In Los Altos Hills
There were 67 homes on the market in September versus 70 in the same period of 2009. There have been fewer listings this year but in general the inventory in Los Altos Hills is down as most sellers are taking a "wait and see" approach to the market.


Fourth Quarter Trends
As with other area, we typically see inventory drop along with average and median selling prices as well as the number of homes sold in Q4. I feel we'll see more strength going into the end of the year as the economy continues to strengthen.

Tuesday, October 19, 2010

Los Altos Real Estate Market Report for September

Mixed Average and Median Prices
For the month of September, 2010 the average sales price in Los Altos was $1,682,581 compared to $1,638,960 in September 2009. That's an increase of 2.66%. However, the median sales price in Los Altos for September 2010 was $1,476,000 versus $1,676,000 in September 2009. That's a substantial 12% drop. I personally don't place my weight in median prices as they don't tend to show the true trend of the market.


Sales Volume Was Down
Los Altos had 19 closed sales in September 2010 versus 29 in the same period of 2009. That's a large drop as well. However, the number of days on market or how fast homes sold was way down, 91 days last year to 43 days this year. That shows that homes are selling faster, which is a trend most Los Altos based agents will attest to. The market is strongest with entry level homes priced under $1.5 million.

Inventory Is Flat In Los Altos
There were 85 homes on the market in September versus 86 in the same period of 2009. There were more new homes coming on the market but since they sold faster the final inventory count ended up being lower.


Fourth Quarter Trends
Going into the final quarter of the year we typically see inventory drop along with average and median selling prices as well as the number of homes sold. This is in contrast to the year as a whole. Based on sales so far in October, that trend may not hold true this year. So far, the market is strong and we'll see how the final figures for Los Altos settle in a 12 days.

Monday, October 18, 2010

Los Altos Market Performance for Homes Priced $2-3 Million

The good news is that unit sales are up and the average price per square foot are up in this challenging segment of the market. Los Altos home prices have been trending up slightly, especially after this past Spring when many homes priced under $1.5 million sold with multiple offers. The high-end market has had more difficulty but has greatly improved this year.

In 2009, some of the figures are distorted because there were several new or newer homes priced over $3 million that had substantial price reductions under $3 million. Two of these were on Manor Way in the Loyola Corners section of Los Altos. As a result of removing those homes, a more accurate comparison on 2009 and 2010 is shown.

While sales and the average price per square foot are up, the overall average listing price is down about 7%. The average sales price is down about 5% compared to 2009. Does this mean that prices are down in Los Altos? Yes and no. The average price per square foot is up but not enough to counter the overall sales price. So, prices are down but slightly - when put into that perspective. This only applies to this segment of the market. Los Altos general single-family home prices are up when including homes in all price ranges.

I'm seeing more sales activity in Q4 and expect to see a strong finish to the year.

Thursday, October 14, 2010

Hot New Home in Los Altos 10/14

91 ARBUELO WAY, Los Altos 94022
MLS# 81049871
Listing Agent: Yvette Stout, Alain Pinel Realtors
List Price: $2,795,000
Days On Market: 1
Bedrooms: 4
Bathrooms: 3 and 1/2
Living space: 3,206 SqFt
Lot size: 10,138 SqFt
Age: 4

Bryan's Opinion: Arbuelo is in North Los Altos which is considered one of the most prestigious sections in the town. Many homes in on Arbuelo and on nearby streets have been upgraded or built new but not so much that the unique charm of the area has been drowned out. This home is similar to others in terms of size and look/feel that have sold in recent months. It should get a lot of attention and interest but will get some push-back on price.

Arbuelo is close to downtown Los Altos but a healthy walk at just over 1 mile. The neighborhood is generally quiet with little cut-through traffic compared to other nearby streets like East Portola.

Wednesday, October 13, 2010

Developers in Los Altos Hills - Super Mansions and Protected Land

Los Altos Hills has long been a destination for the rich and famous to build high-end estates and small developments of luxury homes. It's an attractive destination for developers and private land owners. Los Altos Hills is facing a couple of issues right now; restricting home sizes and development of Hidden Villa.

Hidden Villa
Hidden Villa is a 1600 acre preserve and farm that locals have enjoyed for decades. A developer has proposed building homes within an area too close to a creek running through the land, in violation of county regulations. While not officially a part of Los Altos Hills (it's technically county land), development in the area is considered undesirable by many local residents.

In my opinion, development of the site is not in the best interest of the community and further work within the 150-foot setback is an affront to the existing residents. I understand that a developer has to maximize the use of the land but in this case the setback was known prior to acquisition. Developers need to work within the rules to as much a degree as possible.

Super Mansions
There's a 28,000 square foot home planned for Los Altos Hills that has become one of a few that residents are taking issue with. In some local towns where such homes are built, including Woodside and Atherton, the solution has been to build smaller homes and get the additional square footage through more buildings - effectively creating a compound.

My question to the people building these homes is; do you really need all that space? It seems to me that such a home is merely a statement of wealth and not need. In light of the social backlash of overpaid executives it might be worthwhile to take a "less is more" approach and build more modest homes.

I'm not against development at all. However, I see an opportunity for restraint and practicality.

Tuesday, October 12, 2010

Perfect Symmetry: Los Altos Boy Born on 10/10/10 at 10:10

We all know that Los Altos is a distinctive place with a storied history filled with the names of interesting people. Well, we can add Rafael Terrell-Hondl to that list. He's the newest Los Altos resident, born on October 10, 2010 at 10:10AM in Room 10 of Kaiser Hospital!

Fortunately for mom he wasn't 10 pounds but he did weigh in at a nice 8 pounds 11 ounces and he measured 20 inches (2x10). The birth wasn't planned and in fact he was expected 10 days early.

Rafael joins his 6 year old brother and 3 year old sister when he goes back home to Los Altos. His is one of a rare number of babies born on this auspicious date and he'll have plenty of newspaper clippings to look at when he's older.

Monday, October 11, 2010

Hot Home Price Drop in Los Altos 10/11

1504 COUNTRY CLUB DRIVE, Los Altos 94024
MLS# 81040749
Listing Agent: Judy Bogard-Tanigami, Alain Pinel Realtors
List Price: $5,495,000 PRICE DROP OF $1.455 MILLION!!
Days On Market: 0
Bedrooms: 5
Bathrooms: 4 and 1/2
Living space: 7,585 SqFt
Lot size: 81,457 SqFt
Age: 82

Bryan's Opinion: This home is in the Country Club section of Los Altos and is considered one of the most desirable areas, especially with golf course views. This is a grand estate in the greatest tradition of Los Altos. While many will have an issue with the pricing, I suggest you consider quality, location, and lot size in that consideration. The homes priced in the $2-3 million range with 3000-4000 sqft are usually on lots 20,000 sqft or smaller, even if they're in great condition. This home is on a nearly 2 acre lot.

There are very few homes in the Country Club neighborhood that could achieve this price point. However, most are on smaller lots, are smaller homes, and don't have the same views. While not a historic home, it is a piece of Los Altos history. This is truly a great opportunity.

Thursday, October 7, 2010

Hot New Properties in Los Altos Hills 10/7

26620 PURISSIMA ROAD, Los Altos Hills 94022
MLS# 81049100
Listing Agent: Kevin Flynn, RE/MAX
List Price: $3,995,000
Days On Market: 0
Bedrooms: 3
Bathrooms: 1
Living space: 1,101 SqFt
Lot size: 108,900 SqFt
Age: 85

Bryan's Opinion: This seciton of Los Altos Hills is home to many large lots with older smaller homes, horses, and other farm animals. It feels to me to be more rural that some other sections. There are a few nice estate homes in this area but not as many as other areas of the hills. The downside of this area is that you do get noise from Highway 280. On the other hand, it is hard to find a nearly flat 2 acre lot as well. You will get no real views from this lot.

This is priced in line with other lots currently available in Los Altos Hills that are flat and running about $2 million an acre. If you're considering a large flat lot to build a new home and want space for animals, pool, tennis court, etc then this is a great opportunity.

Hot New Properties in Los Altos 10/7

2204 VINEYARD COURT, Los Altos 94024
MLS# 81049095
Listing Agent: David Troyer, Intero Real Estate
List Price: $1,828,000
Days On Market: 1
Bedrooms: 5
Bathrooms: 3
Living space: 2,743 SqFt
Lot size: 16,592 SqFt
Age: 51

Bryan's Opinion: Sitting on more than 1/3 acre of land at the end of a court, this home is located in a highly desirable section of the Highlands Neighborhood of Los Altos. Having sold a property in the same neighborhood this summer at $1,637,000 I can say that the pricing on this home is in line with the area. It is rare to get a lot of this size in Los Altos as most are 10-12K square feet.

The Highlands Neighborhood is generally hilly and some lots offer views and good privacy. There is very little traffic or road noise. I see this as being an excellent value especially considering recent sales.

Tuesday, October 5, 2010

Home sales and the 3.8% Medicare tax - it's real, sellers will pay it, be ready

There has been a lot of coverage in the media and throughout our industry about this 3.8% tax on home sales. There have been articles saying it's a lie, myth, false, etc. NAR Mythbusters called it false but if you read carefully, they in fact acknowledge it's REAL! However, the bar is set for markets with high-value homes and high income individuals. In Los Altos and Los Altos Hills we have a significant number of people who meet these criteria.

BARRIER 1: Personal Income (Adjusted Gross Income or AGI)
Your household needs to have income of $200,000 (individuals) or $250,000 (married couples). This barrier is easily passed in Silicon Valley with two engineers or managers each making $125K or more per person. This sort of household income may be rare in other parts of the country but here it's common.

BARRIER 2: Net Investment Income
You get an exemption of $250,000 (individuals) or $500,000 (married couples) from the sale of your personal residence. This covers most people in the country and even a fair number of people in Los Altos and Los Altos Hills. However, once you go past that THE TAX TAKES EFFECT. Keep in mind, you have to meet barrier 1 and 2 - BOTH.

This will impact residents of Los Altos and Los Altos Hills because a lot of people bought homes priced at $500,000 years ago and those homes easily sell for $1.5 million or more today. So, with $1 million in equity, you'll a break on the first $500,000 but you'll pay the 3.8% tax on the remaining 3.8%. Check with your tax advisor on the details. This tax takes effect January 1, 2013.

Monday, October 4, 2010

Hot New Properties in Los Altos Hills 10/5

25701 DEERFIELD DRIVE, Los Altos Hills 94022
MLS# 81047316
Listing Agent: Patricia Lindo, Cashin Company
List Price: $3,400,000
Days On Market: 8
Bedrooms: 4
Bathrooms: 4 (and 2 half baths)
Living space: 3,924
Lot size: 17,466 SqFt
Age: 3

Bryan's Opinion: This home is located on a quiet street within walking distance of downtown Los Altos Hills. The lot is small compared to the one acre standard in Los Altos Hills but it's still a respectable size. This area of Los Altos Hills has a mix of smaller lots in addition to the conventional one acre minimum.

The home does have some views but they're low level over the valley, not the high up views you get from homes on the other side of Highway 280. The proximity to town and high-quality neighborhood make this a prime place to be.

Market Trends: Los Altos Hills home prices have dropped, sort of

I've had a lot of clients tell me Los Altos Hills prices have dropped. I'm a pragmatic Realtor and have no issue with the facts behind a weak or strong market. My gut instinct is that the market is good overall but some segments are weak. So I looked specifically ONLY at homes that have SOLD where the sales price was $2-3 million. This is a key segment of this market because the average selling price is about $2.2 million.

ARE WE UP, DOWN, OR BOTH?
The chart below spells it all out. The median and average prices are down both Q3 2009 to Q3 2010 as well as the year-to-date (YTD) trends for both years. The average listing price is down over 7% and the average sales price is down about 5%. However, the homes that have sold are smaller and on smaller lots. So, the price per square foot is effectively up.

Does this mean the overall market in this range of prices is up or down? I'd go with down because the price per square foot argument is difficult to truly quantify. Smaller homes typically sell for higher prices per square foot.

UNIT SALES ARE OFF
There were only 5 homes sold in Q3 2010 versus 20 in Q3 of 2009. To see if this is really an issue you could look at the number of pending sales but that would not make up the difference. The YTD sales are off as well with 31 in 2009 versus 22 in 2010.

Why are prices and unit sales down so much but they're up in Palo Alto in the same price range? Good question. I know that a lot of buyers are looking at Los Altos instead of Los Altos Hills because they want traditional neighborhoods and less land to take care of. I think Q4 will be strong and we'll see less of an difference between the two years.

Sunday, October 3, 2010

Los Altos Short Sale Property 10/3

688 LINCOLN AVENUE, Los Altos 94022
MLS# 81035757
Listing Agent: George Ho, George Realty
List Price: $1,378,000
Days On Market: 3
Bedrooms: 4
Bathrooms: 3 1/2
Living space: 3,078
Lot size: 7,405 SqFt
Age: 63

Bryan's Opinion: This home is located at the end of Lincoln Street which runs along Foothill Expressway. It is within walking distance of downtown Los Altos with nice homes nearby. It has been on the market (off and on) for about 3 years, starting at over $2 million and at one time being as low as $799,000. The current price is very close to the lender approved sale price of $1,380,000.

For the size and location, this home is very well priced. While in great condition, it offers little flair or character. The view out the front door is of the Foothill Expressway sound wall. However, if you need a larger home, a Los Altos address, and a good general location. This is a home worth considering.

Keep in mind, this is one of a limited number of short sales in Los Altos, ever. Within a half-mile radius there are three other properties that are much smaller and with similar location challenges priced within $200K or so of this home.

Friday, October 1, 2010

Hot New Properties in Los Altos 10/2

555 SHELBY LANE, Los Altos 94024
MLS# 81047918
Listing Agent: Sunny Kim, Alain Pinel Realtors
List Price: $1,895,000
Days On Market: 3
Bedrooms: 4
Bathrooms: 2 1/2
Living space: 3,389
Lot size: 12,632 SqFt
Age: 35

Bryan's Opinion: This home is located on a cul-du-sac within walking distance of downtown Los Altos with nice homes on the whole street. It's backed up to Covington Elementary which may not appeal to some people but the overall nearby neighborhood is excellent. There's a lot of remodeling and new construction in this area of Los Altos which is helping prop up property values.

For the size and location, this is reasonably well priced. While in great condition, it does feel a little dated. Given what else is on the market in Los Altos, I'd highly recommend looking at this for the size and convenience.