Los Altos Hills has been having a rough few years recently. Homes that were listed for $5 million end up selling for less than $3 million and multiple listings were on the market for 18 months or more. Fortunately, that trend seems to have slowed substantially in 2010. As noted in my price analysis of homes in the $2-3 million range a few months ago, the market seems to be favoring older homes with lower prices but a high price per square foot than new homes. This is showing up as an increase in total sales volume and units but at a lower average selling price.
There were 81 closed sales in Los Altos Hills in 2010 versus 68 in 2009, an increase of about 20%. The average days on market was 120 in 2010 versus 98 in 2009, an increase of about 20% as well. The substantial increase in volume is most telling. The spike in the days on market figure can be attributed to a few homes that sold after being on the market a long time.
The average selling price was $2.59 million in 2010 versus $2.614 million in 2009. That's a drop of less than 1%. This means that Los Altos Hills has reached a certain level of partity between buyers and sellers with a slight bias to buyers. Based on annecdotal feedback I'm hearing about open houses and offers on some properties, I expect that the shift will continue to turn in favor of sellers. Where buyers will still have control is at the high-end of the market. Anything priced over $3 million is fair game for sellers if it hasn't been priced well. At the really high-end, homes priced between $4 million and up to $15 million or more the buyers are in control. Very few of those homes are selling and while sellers are not desperate to sell, buyers are not anxious to buy. The impass is creating a stalemate with sales and homes are not selling regardless of discounts. Many high-end homes have seen price drops of $1 million or more and had no offers.
There were several homes taken off the market in December 2010, so expect to see a small spike in inventory in January as those come back on the market. About 15% of December inventory was removed with explicit intent to relist in 2011. Many of those homes were priced in segments of the market that are doing well.
Based on the performance the market in Q4 and overall for 2010, I expect that 2011 will see Los Altos Hills continue to recover with average prices moving up 2-3% for the year just as they did in Los Altos last year.