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.