A recent article written by local financial advisor Artie Green and published in the Los Altos Town Crier asks the question "Have housing prices hit bottom yet?". Based on my experience and the current pricing trend in Los Altos, we have indeed hit bottom and are moving back up.
The article was primarily aimed at the general market around the country. Most economists, even the pessimists, will argue that the market has turned and will rise anywhere from 3-20% in the coming year. The few dim spots in the economy can't overshadow the fact that home prices in many areas are rising, Los Altos being one of them.
The biggest challenge in Los Altos has been the high-end. This is also true in Los Altos Hills. While the overall market in Los Altos has done very well, rising several points this year alone, the market segment over $2 million is still weak. It's not dropping but it also isn't moving up. That may indicate a bottom but since so few transactions occur in that price range, it's hard to say. It's even harder to define the market over $3 million.
So the general answer for Los Altos is that, yes, we've hit the bottom. However, we need to see strength in the high-end of the market in order to say that the entire market has hit bottom. This same conclusion applies to Los Altos Hills.