How’s the Market? 2011 in Review

Posted on January 2, 2012 by Chris

Happy New Year, and welcome to your 2011 Real Estate Market Recap.

2011 ended up being a strange year in local real estate, with hot pockets such as Palo Alto enjoying a Seller’s Market and multiple offers being the norm, and areas such as Menlo Park, Mountain View and Los Altos which were Normal or Buyer’s Markets.

In 2011 we saw four major factors driving the local real estate market (in addition to location, location, location and schools). Three look to be sustainable, and one is short-term:

1) Inventory – For all of 2011 the number of homes for sale has been relatively low compared to recent years locally, and very low by national standards. We have been stable at about 40-50%% of the inventory of homes for sale at the same time in 2010 all year, and about a third of that of 2009. At the same time, new buyers have entered the market, especially in Palo Alto, making homes scarce, especially those that are well-priced, well located and in good condition.

2) Interest rates – Rates continue to flirt with record lows, with 30 mortgages around 4%, and shorter term products below 3%. Money to buy homes has never been cheaper. To illustrate, the long-term average for 30 year mortgages is 9%, and the peak
was 18%.

3) Rents – As companies have started hiring again we are seeing a net influx of people into our area.This combined with low vacancy rates has driven an increase in demand for rentals, even as landlords are raising rents by up to 20%. In many cases, it is cheaper to buy a house than rent the equivalent, assuming you have the downpayment.

4) Liquidity Events –This is the non-sustainable driver. LinkedIn was the breakout IPO of 2010, and the pre-IPO employees are able to liquidate their shares this week. I have a couple of LI clients, and it has put a couple of hundred potential buyers into the local market. With the stock runup following the initial offering, and the social media excitement, there are a number of other people who benefitted as well. As I have mentioned before, there has been a lot of Facebook and Zynga shares trading in the secondary markets, and C-level execs at Facebook have been buying higher end homes in Palo Alto (Zuckerberg), Woodside, Atherton and Hillsborough. A number of higher end developers have been buying up property inthese areas to do high-end speculation projects, and I have a list of developers looking for property to buy in these areas.

The good news continues to come in, and our market is back to thriving. All of the communities across the area continue to enjoy active selling markets, with hotspots in Palo Alto, Central Menlo Park, Portola Valley and Woodside.
Last month we were watching two properties in Palo Alto.

976 Elsinore, an Eichler home in the Triple L neighborhood that has been quickly prepped for market with a new kitchen, bathrooms, heating system and floors. Priced aggressively at $1,300,000 for a 1700sf house, it sold for $1.500,000.

169 Tasso in downtown Palo Alto is a turn of the century converted duplex with 3 bedrooms and two baths downstairs and a 1/1 apartment upstairs. This home retains the original architectural details, and has just received fresh paint and some grass outside. Priced at $1,599,000,this home received 5 offers and sold for $1,725,000.

2012 FORECAST, SPECULATION AND PROGNOSTICATION

Over the weekend I read an article about the impending IPO of local super company Facebook. It may actually finally happen this year, and local realtors are abuzz anticipating that newly minted Facebook millionaires will flood the market with cash offers and quick sales. Pardon my cynicism, but if we take out all the early employees and senior level investors who have already liquidated shares and purchased real estate (Zuckerberg and a number of the C-level), and those investors like Yuri Milner who were already wealthy, there aren’t that many people when you compare it to the local housing stock. That means the effect gets diluted quickly. Add in the new campus in Menlo Park and the traffic challenges of getting to and from, and you will likely have a hot spot in Palo Alto (again), maybe Atherton and The Willows neighborhood of Menlo Park. Areas like Los Altos and Los Altos Hills will be largely unaffected.

As a benchmark, Pre-IPO LinkedIn shareholders were able to liquidate their shares in mid-November, resulting in a few cash sales, but that is a few ships as opposed to a rising tide raising all ships.


THE PUNCHLINE

Expect 2012 to be a repeat of 2011. The Fed and a stagnant national economy are holding a lid on interest rates, and election years are notorious for stagnation. The good news is that our local economy is doing well, and local consumer confidence combined with historically low interest rates should keep the buyer side of the equation fueled.

In 2012 it’s really up to sellers. 2011 was marked by limited inventory across our area, especially in Palo Alto where inventory hovered around 40% of 2010 and less than half of 2009. In the face of solid demand, this created the scarcity of homes that we discussed all year, leading to the frequent competition for homes and multiple offers that we saw across the area during 2011, even during the “slow times” of the year.

As I have said a couple of times this year, if you live in Mountain View, Los Altos, Menlo Park, or especially Palo Alto, and have been considering selling your home, NOW is the best time since 2006 to do so. The combination of interest rates, local economics and market forces has not been in the seller’s favor as much as now in the last 5 years, and it looks like the window may begin closing with interest rates
rising in 2013.

If you would like to learn more about the market for your home, please contact me directly at 650-450-0450 or Chris@VentouxHomes.com

Thanks for reading and all the best to you in 2012.

Happy New Year!

Chris

Posted in Atherton, Los Altos, Los Altos Hills, Menlo Park, Mountain View, Palo Alto, Portola Valley, Stanford, Statistics, Woodside | Tagged , , , , , , , , , , , , , , | Leave a comment

How’s The Market? Real Estate market stats for December 2011

Posted on December 7, 2011 by Chris

Welcome to December 2011, and our last Real Estate Market Update and Commentary for 2011. We will do a recap of 2011 in January and feature some prognostications for 2012.

In the meantime, the market has remained consistent from last month and all through the fall, with many buyers chasing a limited number of homes for sale. Our inventory across most of our market has remained about 40% of last year, while new buyers are entering the market through a combination of strong stock performances for a number of local companies, record low interest rates, and more positive consumer confidence. The dry weather helps too. Looking at houses in the rain is almost as miserable as holding them open, trust me on that.

It is truly a market of haves and have nots, where properties that are well-priced and presented (move-in ready, or seem like great deals) are selling rapidly with multiple offers, while the fringe properties (overpriced or poor floorplan, or poorly presented) languish like an old toy forgotten on Christmas morning in favor of the new and shiny.

Nowhere is this more prevalent than in still hot Palo Alto. We are currently watching two properties on the market this week.976Elsinore is an Eichler home in the Triple L neighborhood that has been quickly prepped for market with a new kitchen, bathrooms, heating system and floors. Priced aggressively at $1,300,000 for a 1700sf house, they are hoping for multiple offers, and are expecting three.

169 Tasso in downtown Palo Alto is a turn of the century converted duplex with 3 bedrooms and two baths downstairs and a 1/1 apartment upstairs. This home retains the original architectural details, and has just received fresh paint and some grass outside. Priced at $1,599,000, this home should receive 5 or 6 offers.

We will let you know how both turn out in next month’s recap.

As we discussed last month, there are four major factors currently driving the market. Three look to be sustainable, and one is short-term:

1)     Inventory – For all of 2011 the number of homes for sale has been relatively low compared to recent years locally, and very low by national standards. We have been
stable at about 40-50%% of the inventory of homes for sale at the same time in 2010 all year, and about a third of that of 2009. At the same time, new buyers have entered the market, especially in Palo Alto, making homes scarce, especially those that are well-priced, well located and in good condition.

2)     Interest rates – Rates continue to flirt with record lows, with 30 mortgages around 4%, and shorter term products below 3%. Money to buy homes has never been cheaper.
To illustrate, the long-term average for 30 year mortgages is 9%, and the peak was 18%.

3)     Rents – As companies have started hiring again we are seeing a net influx of people
into our area. This combined with low vacancy rates has driven an increase in demand for rentals, even as landlords are raising rents by up to 20%. In many cases, it is cheaper to buy a house than rent the equivalent, assuming you have the downpayment.

4)     Liquidity Events –This is the non-sustainable driver. LinkedIn was the breakout IPO of 2010, and the pre-IPO employees were able to liquidate their shares last month. I have a couple of LI clients, and it has put a couple of hundred potential buyers into the local market. With the stock runup following the initial offering, and the social media excitement, there are a number of other people who benefitted as well. As I have mentioned before, there has been a lot of Facebook and Zynga shares trading in the secondary markets, and C-level execs at Facebook have been buying higher end homes in Palo Alto (Zuckerberg), Woodside, Atherton and Hillsborough. A number of higher end developers have been buying up property inthese areas to do high-end speculation projects, and I have a list of developers looking for property to buy in these areas.

The good news continues to come in, and our market is back to thriving. All of the communities across the area continue to enjoy active selling markets, with hotspots in Palo Alto, Central Menlo Park, Portola Valley and Woodside.
On to the numbers:

Atherton:

The Average Price of a Single Family Home in Atherton is $7,176,292 with a range of $988,000 to $24,000,000. 42% (vs. 41% last month) of the homes in Atherton have had price reductions, and the average number of Days on Market is 216 days, versus 140 last month. Atherton remains deeply in Buyer territory, but prices are trending up. If you compare quartiles, you can see how one sale in the second quartile shifts
things because there are so few homes on the market, a mere 24 across a $23M spread.

Hillsborough:

The Average Price of a Single Family Home in Hillsborough is $6,002,467 with a range of $1,499,000 to $43,888,000. 35% of the homes in Hillsborough have had price reductions (vs. 23% last month), and the Average number of Days on Market is 224 days, (up from 158 last month. Hillsborough remains deeply in Strong Buyer’s Market territory, as the buyer pool for $5M+ homes is pretty small, even in the best of times.

Los Altos:

Currently, the Average Price of a Single Family Home in Los Altos is $2,333,915 with a range of $1,100,000 to $4,825,000. 59% (versus 40% last month) of the homes in Los Altos have had price reductions as sellers are trying to get them sold before the end of the year, and the average number of Days on Market has risen from 99 to 177. The Los Altos market remains a Strong Buyers’ market, with prices trending downward over the quarter, and time on the market increasing. As always, the (few) homes that are well presented and attractively priced are getting multiple offers and selling quickly, even over the magic $2M mark.

Los Altos Hills:

In Los Altos Hills, the Average Price of a Single Family Home is $4,193,974 with a range of $1,500,000 to $19,500,000. 44% (vs. 39% last month) of the homes in Los Altos Hills have had price reductions, and the average number of Days on Market has risen to 217 days from 159 days last month. Los Altos Hills remains a Strong Buyer’s Market, with a Market Action Index of 10.9. It is still deal time for Buyers in Los
Altos Hills.

Menlo Park:

This month, the Average Price of a Single Family Home in Menlo Park is $1,483,108 with a range of $215,000 to $4,750,000 (The $215,000 is in East Menlo Park. The bottom of the Menlo Park market is about $800,000). 54% (43% last month) of the homes in Menlo Park have had price reductions, and the average number of Days on Market has risen to 130 days versus 102 last month. Menlo Park is a Strong Buyer’s Market overall, with the quarterly trend swinging back toward parity as activity has really picked up in the lower half of homes priced between $1,000,000 and $2,000,000. Because of the nature of the Menlo Park market, pay close attention to the quartile breakdowns, as it is really a number of markets.

Mountain View:

Currently, the Average Price of a Single Family Home in Mountain View is $938,291 with a range of $400,000 to $1,998,000. 54% (versus 42% last month) of the homes in Mountain View have had price reductions, and the average number of Days on Market has held at 73 versus 74 days from last month. Overall, Mountain View remains a Buyer’s market, with the quarterly trends moving deeper into Buyer territory. The neighborhood mix is very important in Mountain View. Downtown (94041) and the west side (94040) are continuing to be stronger than 94043 which is consistent with Mountain View’s bifurcated market. Well priced homes in 94040 are still getting multiple offers and selling in 1 – 2 weeks.

One aberration is the new Enclave development on Grant Road in 94040. This development of 59 homes has begun selling with homes in the range of $1.8M – $2.1M, which will affect the average prices in 94040, and also times on the market as new construction usually takes longer to sell than resale properties.

Palo Alto:

In Palo Alto the Average Price of a Single Family Home is $2,307,366 with a range of $799,000 (2 bedroom, next to RR tracks) to $8,795,000. 37% (up from 33% last month) of the homes in Palo Alto have had price reductions, and the average number of Days on Market has risen to 154 from 82 last month (the homes that were sitting, continue to sit as others sell quickly, raising the average). The market in Palo Alto has consistently been more of a Seller’s Market than the surrounding communities this year, due to limited inventory and consistently high demand, and this continues with a Market Action Index of 28.7, Buyer’s Advantage.

It is also interesting to look at the market variations across the different zip codes and price ranges, as Palo Alto has such a large variation in quality/desirability of neighborhoods and property values. The under $2M market is overheated by people buying access to Palo Alto schools, and the over $3M market languishes as buyers there have choices. The limited number of homes for sale, means that individual homes have big effects on the averages.

Portola Valley:

Currently, the Average Price of a Single Family Home in Portola Valley is $3,317,347 with a range of $649,000 to $15,950,000 (reduced from $20,000,000). 47% of the homes in Portola Valley have had price reductions (vs. 50% last month), and the average number of Days on Market is 227 vs. 183 last month. Overall, Portola Valley is consistently a Buyer’s Market, and currently is a Strong Buyer’s market with a Market Action Index of 17.7, trending downward. Portola Valley is a series of micromarkets, so the averages may be misleading. Contact me for a more granular look at Portola Valley.

Woodside:

In Woodside the Average Price of a Single Family Home is $4,683,309 with a range of $334,900 to $19,000,000. 40% of the homes in Woodside have had price reductions (vs. 40% last month), and the average number of Days on Market has risen from 147 to 176. The market in Woodside is consistently a Buyer’s Market as there is little demand for the homes up in the mountains (where the $334,900 house is), and even less for the expensive horse properties closer to town and civilization ($19,000,000 for 20 acres). Interestingly, over the last 3 months, the market has been trending back a bit toward Sellers, particularly at the high end, as pre-IPO wealth has started moving in the valley again. There is still no better way to let people know you have arrived than a horse estate in Woodside!

Hopefully the good news will continue in 2012.
To stay current with the market in your neighborhood, be sure to visit our website at http://www.ventouxhomes.com/ and click on the How’s The Market banners to see current market conditions and download our free reports. You can also see all of the homes for sale in your neighborhood by following the Neighborhoods tab at the top of every page.
If you have specific questions about the value of your home, please don’t hesitate to contact me directly at: 650-450-0450.
I hope that you have a happy and safe holiday season.
Thanks for reading,

Chris

Posted in Atherton, Los Altos, Los Altos Hills, Menlo Park, Mountain View, Palo Alto, Portola Valley, Statistics, Woodside | Tagged , , , , , , , , , , , | Leave a comment

Posted on November 16, 2011 by Chris

The fall holiday market slowdown still has yet to occur this year, with multiple offers and non-contingent or cash deals still more the norm than noteworthy in red hot Palo Alto. Properties under $2.5M are selling in as little as a week, and some of the higher end properties are moving quickly as well. All of our markets are trending closer to sellers territory than they have been since 2006, and prices are back to 2006 levels in many neighborhoods as well. (Prices peaked in 2007, then started to drift downward a bit before the major correction of 10 – 20% in late 2008).

There are four major factors currently driving the market. Three look to be sustainable, and one is short-term:

1)      Inventory – For all of 2011 the number of homes for sale has been relatively low compared to recent years locally, and vary low by national standards. We have been stable at about 40-50%% of the inventory of homes for sale at the same time in 2010 all year, and about a third of that of 2009. At the same time, new buyers have entered the market, especially in Palo Alto, making homes scares, as especially those that are well-priced, well located and in good condition.

2)      Interest rates – Rates continue to flirt with record lows with 30 mortgages around 4%, and shorter term products below 3%, money to buy homes has never been cheaper. To illustrate, the long-term average for 30 year mortgages is 9%, and the peak was 18%.

3)      Rents – As companies have started hiring again we are seeing a net influx of people into our area. This combined with low vacancy rates has seen an increase in demand for rentals, even as landlords are raising rents by up to 20%. In many cases, it is cheaper to buy a house than rent the equivalent, assuming you have the down payment.

4)      Liquidity Events – This is the non-sustainable driver. LinkedIn was the breakout IPO of 2010, and the pre-IPO employees are able to liquidate their shares this week. I have a couple of LI clients, and it has put a couple of hundred potential buyers into the local market. With the stock runup following the initial offering, and the social media excitement, there are a number of other people who benefitted as well. As I have mentioned before, there has been a lot of Facebook and Zynga trading in the secondary markets, and C-level execs at Facebook have been buying higher end homes in Palo Alto (Zuckerberg), Woodside, Atherton and Hillsborough. A number of higher end developers have been buying up property in these areas to do high-end speculation projects, and I have a list of developers looking for property to buy in these areas.

The good news continues to come in, and our market is back to thriving. All of the communities across the area continue to enjoy active selling markets, with hotspots in Palo Alto, Central Menlo Park, Portola Valley and Woodside.

Posted in Atherton, Los Altos, Los Altos Hills, Menlo Park, Mountain View, Palo Alto, Portola Valley, Stanford, Statistics, Woodside | Tagged , , , , , , , , | Leave a comment

Market Update for October 2011

Posted on October 12, 2011 by Chris

“There are really two valleys, and those two valleys have very few places where they intersect,” said Emmett Carson, CEO of the Silicon Valley Community Foundation, which awarded $24
million in grants through its corporate advised funds last year, up 50 percent from the year before. “That’s why it’s easy for one segment that’s doing quite well to mistakenly believe that things are going just fine here.”

I opened last month’s market update with this quote, and I see it holding true for the coming year(s). While the East Bay and San Jose are continuing to be dogged by short sales, foreclosures and other effects of rising unemployment, the Peninsula, particularly Palo Alto, Portola Valley and Woodside are seeing a resurgence of market activity that we haven’t seen since the party of 2002 – 2007.

So, what does it all mean for housing prices and sales? I’m sticking with my summary from last month:In a nutshell, more of the same for our area.

Key drivers:

  • The Fed’s decision to hold interest rates down is a boon for our local housing market as the large mortgages that
    home buyers here carry make them especially sensitive to interest rates. In some cases buyers are borrowing more because they can get higher returns on their money in other areas. Some are pre-IPO in companies that have liquidation events on the horizon, and they are betting that they can just pay off their homes before rates rise.
  • Pre-IPO wealth: I am running into an increasing number of early employees at various companies that are Pre-IPO who are selling their shares early and funneling that money into real estate, especially in the premier areas like Woodside and Hillsborough.
  • The ROI of real estate, leverage. While I expect real appreciation anytime soon (ignoring those stories about
    multiple offers, we are talking about the rising tide that raises ALL ships), the real ROI story on real estate is leverage. On a $1,000,000 property, your 20% down payment of $200,000 is appreciating as a $1,000,000 investment. Try that with your stock portfolio…..

Moving Northward: Coverage of Portola Valley and Hillsborough

I announced this last month, but wanted to reiterate that we are now covering Portola Valley and Hillsborough. If you would like to follow those markets more often, without the color commentary, or you want to update
your reports account, just visit our website athttp://www.ventouxhomes.com/and click on How’s the Market?.

Traditionally, Portola Valley has been a forgotten rural cousin to Woodside, with a limited pool of buyers looking for something up in the hills and forests. This year, Portola Valley has heated up, with homes selling relatively quickly, especially in the Ladera Ranch neighborhood. Now we will start putting some numbers to those subjective terms.

Why Portola Valley? Well, aside from it being a really unique area, we are also noticing a number of people who are looking there for housing instead of Woodside. I guess the glitz of downtown Woodside is too much
for some people…….

We have also expanded our market coverage northward to stately Hillsborough. If you are looking for a lovely historic mansion within a short commute to San Francisco’s financial district, then Hillsborough is the
place for you. Interestingly, some Facebook execs are investing their pre-IPO funds in Hillsborough real estate, with two C-level Facebookers purchasing homes in Hillsborough recently.

On to the numbers:

Atherton:

The Average Price of a Single Family Home in Atherton is $6,285,769 with a range of $1,275,000 to $24,000,000. 41% (vs. 28% last month) of the homes in Atherton have had price reductions, and the average number of Days on Market is 140 days, versus 146 last month. Atherton remains deeply in Buyer territory, but times on the market are trending down, and prices are trending up.

Hillsborough:

The Average Price of a Single Family Home in Hillsborough is $5,501,080 with a range of $1,550,000 to $43,888,000. 22% of the homes in Hillsborough have had price reductions (vs. 23% last month), and the average number of Days on Market is 149 days, down from 158 last month. Hillsborough remains deeply in Strong Buyer’s territory, and is trending deeper, as the buyer pool for $5M+ homes is pretty small, even in the best of times.

Los Altos:

Currently, the Average Price of a Single Family Home in Los Altos is $2,178,094 with a range of $1,050,000 to $5,285,000. 40% (versus 38% last month) of the homes in Los Altos have had price reductions, and the average number of Days on Market has risen from 94 to 99. The Los Altos market remains a Strong Buyers’ market, and is trending deeper into Buyer’s territory, with prices trending downward over the quarter, and time on the market increasing. As always, the (few) homes that are well presented and attractively priced are getting multiple offers and selling quickly, even over the magic $2M mark.

Los Altos Hills:

In Los Altos Hills, the Average Price of a Single Family Home is $3,719,858 with a range of $1,225,000 to $19,500,000. 37% (the same as last month) of the homes in Los Altos Hills have had price reductions, and the average number of Days on Market has risen to 159 days from 129 days last month. Los Altos Hills remains a Strong Buyer’s Market, with a Market Action Index of 12.1 and is trending deeper into Buyers territory. It is still deal time for Buyers in Los Altos Hills.

Menlo Park:

This month, the Average Price of a Single Family Home in Menlo Park is $1,463,953 with a range of $215,000 to $4,750,000 (The $215,000 is in East Menlo Park. The bottom of the Menlo Park market is about $800,000). 49% (34% last month) of the homes in Menlo Park have had price reductions, and the average number of Days on Market has risen to 102 days versus 88 last month. Menlo Park is a Strong Buyer’s Market overall, with the quarterly trend swinging back toward parity as activity has really picked up in the Second Quartile of homes priced between $1,000,000 and $2,000,000. Because of the nature of the Menlo Park market, pay close attention to the quartile breakdowns, as it is really a number of markets.

Mountain View:

Currently, the Average Price of a Single Family Home in Mountain View is $917,856 with a range of $440,000 to $2,250,000. 42% (versus 41% last month) of the homes in Mountain View have had price reductions, and the average number of Days on Market has risen to 74 from 56 days from last month. Overall, Mountain View remains a Buyer’s Advantage market, with the quarterly trends moving deeper
into Buyer territory. The neighborhood mix is very important in Mountain View. Downtown (94041) and the west side (94040) are continuing to be stronger than 94043 which is consistent with Mountain View’s bifurcated market. Well priced homes in 94040 are still getting multiple offers and selling in 1 – 2 weeks.
One upcoming aberration is the new Enclave development on Grant Road in 94040. This development of 59 homes has begun selling with homes in the range of $1.8M – $2.1M, which will affect the
average prices in 94040.

Palo Alto:

In Palo Alto the Average Price of a Single Family Home is $2,099,153 with a range of $700,000 (2 bedroom, next to RR tracks) to $6,150,000. 33% (up from 24% last month) of the homes in Palo Alto have had price reductions, and the average number of Days on Market has risen to 82 from 68 last month. The market in Palo Alto has consistently been more of a Seller’s Market than the surrounding communities this year, and this continues with a Market Action Index of 29.6, Buyer’s Advantage. It is also interesting to look at the market variations across the different zip codes and price ranges, as Palo Alto has such a large variation
in quality/desirability of neighborhoods and property values. The under $2M market is overheated by people buying access to Palo Alto schools, and the over $3M market languishes as buyers there have choices.

Portola Valley:
New to our market coverage is quiet Portola Valley. Traditionally, Portola Valley has been a forgotten rural cousin to Woodside, with a limited pool of buyers looking for something up in the hills and forests. This year, Portola Valley has heated up, with homes selling relatively quickly, especially in the Ladera Ranch neighborhood. Now we will start putting some numbers to those subjective terms.
Currently, the Average Price of a Single Family Home in Portola Valley is $3,324,211 with a range of $749,000 to $20,000,000. 50% of the homes in Portola Valley have had price reductions (vs. 34% last month), and the average number of Days on Market is 182 vs. 133 last month. Overall, Portola Valley is consistently a Buyer’s Market, and currently is a Strong Buyer’s market with a Market Action Index of 13.9,
trending downward from 14.7 last month.
Woodside:
In Woodside the Average Price of a Single Family Home is $4,270,590 with a range of $630,000 to $19,000,000. 34% of the homes in Woodside have had price reductions (vs. 40% last month), and the average number of Days on Market has fallen from 162 to 147. The market in Woodside is consistently a Buyer’s Market as there is little demand for the homes up in the mountains (where the $630,000 house is), and even less for the expensive horse properties closer to town and civilization ($19,000,000 for 20 acres). Interestingly, over the last 3 months, the market has been trending back a bit toward Sellers, particularly at the high end, as pre-IPO wealth has started moving in the valley again. There is still no better way to let people know you have arrived than a horse estate in Woodside!

If you know of anyone who would appreciate having this market information delivered to them monthly, please forward this message to them, or CLICK HERE to send an emailwith your cities of interest. If you are a data junkie, you can receive these reports weekly, just register at:www.VentouxHomes.com to select the
markets and reports you would like to receive.

Posted in Los Altos, Los Altos Hills, Menlo Park, Mountain View, Palo Alto, Portola Valley, Statistics, Woodside | Tagged , , , , , , , | Leave a comment

Los Altos Schools – Passing Palo Alto?

Posted on September 4, 2011 by Chris

Here is the latest update from the Superintendent of Schools in Los Altos regarding scores and rankings for the Elementary and Middle Schools. With the strong scores at Mountain View and Los Altos High Schools, Los Altos has the consistency that so many people look for in Palo Alto, without some of the social issues. It’s relatively affordable too!

Good afternoon –

Welcome back to another school year or maybe your first!  I know our students have been immersing themselves in the many back-to-school rituals and events during these first few days.  Our teachers and school staffs have been busy as well, welcoming students and their families in addition to preparing for Back-to-School nights at each of our schools.  It is a busy time of year.

This is also the time of year that our school performance data is released from the State Department of Education.  Our schools again have performed exceedingly well.  Though we all realize this is only one measure of a school’s success and a district’s success, I also understand it is a measure to which all in our community pay attention.  Below is the body of information I shared with the media today, so I thought it was important to share it with you as well.

Best wishes on a continued successful school year, and I hope to see you at our schools.  If you see me, please do take the time to introduce yourself.

Regards,
Jeff Baier

Jeffrey Baier  •  Superintendent
Los Altos School District  •  201 Covington Road  •  Los Altos, California  94024
jbaier@lasdschools.org •  Phone 650.947.1152  •  Fax 650.947.0118

LOS ALTOS SCHOOL DISTRICT CONTINUES TO EXCEL
The California Academic Performance Index (API) results were released today and Los Altos School District continues to perform exceptionally well and has continued to make gains according to the State measure.  LASD yet again achieved an improved score coming in with a mark of 969, a four-point gain over last year’s mark.  This is the highest mark ever registered for LASD reflecting consistent gains over the past ten years (see graph below).
The Los Altos School District API score of 969 was the highest score earned by any of the 1,000-plus school district in the State of California.  Board of Trustees president Bill Cooper commented, “Knowing this is but a single measure by which we evaluate the success our students, we still takegreat pride in the performance of our students, and acknowledge the diligence and hard work of the students, teachers and families.  Our performance as a school district is a testament to the value our entire community places on the education of its children.  Congratulations on a job well done!”
Each of our seven elementary schools scored well in excess of the elementary school State average of 808, and each of our junior high schools significantly outpaced the junior high State average of 778.
Elementary Schools                                Junior High Schools
Almond…………………… 966
Covington………………. 983
Gardner Bullis………… 964
Loyola……………………… 964
Oak………………………….. 983
Santa Rita……………….. 957                        Blach……………………….. 971
Springer………………….. 946                        Egan………………………… 978
K-6 State Average….. 808                        7-8 State Average….. 778

California uses the API as a measure of student academic progress for California’s schools and districts as part of the Public Schools Accountability Act passed by the California legislature in 1999. API scores range from a low of 200 to a high of 1000. The measure includes student assessments in mathematics, English, science and social studies. The API is calculated by converting a student’s performance across multiple content areas into points on the API scale. The points are then averaged across all students and all tests, resulting in the API.  API scores are calculated for all students in a school and various student subgroups (i.e. race, English Learner Status, students with disabilities, and socioeconomically disadvantaged).

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How’s The Market? August 2011

Posted on August 15, 2011 by Chris

“Silicon Valley remains and oasis of optimism amid the global storm” stated the Mercury News yesterday. While I normally dismiss what I read in The Merc, the quotes from Stanford’s Nick Bloom, who in addition to being a client, is also an expert on market volatility, caused me to give this article a little more weight.

While we are still suffering from unemployment and stagnant growth, the author points out that Silicon Valley’s fundamentals are pretty good, especially in comparison to the rest of the global economy. A couple of key points relative to our real estate market between Mountain View and Woodside:

The “haves” and “have nots”

The upper end markets in Palo Alto, Los Altos, etc. have been relatively stable over the last few years of market correction, with very low relative amounts of short sales and foreclosures disrupting the market. Homeowners in these markets have the financial reserves to weather the down market and can afford their homes without tapping equity. Additionally, there is a high correlation between the people who have bought recently and being further up the food chain in corporations, meaning that they are more likely to be the layoff-ers, vs. the layoff-ees.

“There are really two valleys, and those two valleys have very few places where they intersect,” said Emmett Carson, CEO of the Silicon Valley Community Foundation, which awarded $24 million in grants through its corporate advised funds last year, up 50 percent from the year before. “That’s why it’s easy for one segment that’s doing quite well to mistakenly believe that things are going just fine here.”

Additionally, our area seems to produce a new technology or industry with every economic cycle, which fuels our ongoing optimism and risk-taking culture.

Stanford economics professor Nicholas Bloom, whose specialty is market uncertainty, believes Silicon Valley’s economy may actually slow down more than other places in coming months. “It’s not going to mean bad growth, just less good growth,” Bloom said. “So we’ll see Google slow down from 70 percent growth to 60. But 60 still looks pretty fast.”

That’s why the fear out there in the rest of the country is not necessarily the fear here. “Silicon Valley is very good at dealing with uncertainty,” explained Stanford’s Bloom. “This is a place where people are prepared to take wild bets on completely unpredictable

technologies.”

Additionally, local mortgage bank and wealth management firm Opes Advisors included this in its Q2 2011 real estate forecast and outlook:

“In the local Bay Area real estate market, many people are refinancing at the low mortgage rates that have accompanied the drop in Treasury bond yields. The stock market will soon find a bottom as moderate valuations attract investors back in, and our strong Bay Area companies are still forecasting growth. We find our clients being more prudent today yet our real estate is recovering and

being sought out as a more desirable lifestyle choice as well as a unique opportunity.”

So, what does it all mean for housing prices and sales? I’m sticking with my summary from last month:In a nutshell, more of the same for our area.

I’m still expecting the usual seasonal slowdown in August as buyers, sellers and their agents take the traditional pre-back to school August

vacations, followed by an uptick in activity in September. Barring a stock market catastrophe, or a tech industry implosion, prices will continue to hold steady as historically low interest rates make housing financing relatively affordable.


Moving Northward: Coverage of Portola Valley and Hillsborough

You may have noticed that this month’s report is coming mid-month, versus at the beginning. We have been working like beavers to add coverage of Portola Valley and Hillsborough, plus helping some folks buy and sell homes.

Traditionally, Portola Valley has been a forgotten rural cousin to Woodside, with a limited pool of buyers looking for something up in the

hills and forests. This year, Portola Valley has heated up, with homes selling relatively quickly, especially in the Ladera Ranch neighborhood. Now we will start putting some numbers to those subjective terms.

We have also expanded our market coverage northward to stately Hillsborough. If you are looking for a lovely historic mansion within a

short commute to San Francisco’s financial district, then Hillsborough is the place for you. Interestingly, Facebook execs are investing their pre-IPO funds in Hillsborough real estate, with two C-level Facebookers purchasing homes in Hillsborough recently.

On to the numbers:

Atherton:

The Average Price of a Single Family Home in Atherton is $5,914,769 with a range of $999,998 (reduced from $1,150,00) to $17,800,000. 28% (vs. 21% last month) of the homes in Atherton have had price reductions, and the average number of Days on Market is 146 days, versus 133 last month. Atherton remains deeply in Buyer territory with prices trending down and time on the market trending up.

Hillsborough:

The Average Price of a Single Family Home in Hillsborough is $5,080,022 with a range of $1,498,000 to $43,888,000. 23% of the homes in Hillsborough have had price reductions, and the average number of Days on Market is 158 days. Hillsborough remains deeply in Strong Buyer’s territory, as the buyer pool for $5M+ homes is pretty small, even in the best of times.

Los Altos:

Currently, the Average Price of a Single Family Home in Los Altos is $2,245,496 with a range of $1,075,000 to $5,250,000. 38% (versus 37% last month) of the homes in Los Altos have had price reductions, and the average number of Days on Market has risen from 84 to 94. The Los Altos market remains a Strong Buyers’ market, but is trending toward sellers as the relatively limited inventory of 71 homes across all price ranges is creating some pockets of scarcity, especially in the bottom half of the market under $2M, which is where the majority of the buyers are.

Los Altos Hills:

In Los Altos Hills, the Average Price of a Single Family Home is $4,113,391 with a range of $1,595,000 to $19,500,000. 37% (versus 30% last month) of the homes in Los Altos Hills have had price reductions, and the average number of Days on Market has fallen to 129 days from 153 days last month. Los Altos Hills remains a Strong Buyer’s Market, with a Market Action Index of 15.6 and is trending deeper into Buyers territory. It is still deal time for Buyers in Los Altos Hills.

Menlo Park:

This month, the Average Price of a Single Family Home in Menlo Park is $1,306,238 with a range of $225,000 to $4,895,000 (The $239,000 is in East Menlo Park. The bottom of the Menlo Park market is about $800,000). 34% (41% last month) of the homes in Menlo Park have had price reductions, and the average number of Days on Market has fallen to 88 days versus 91 last month. Menlo Park is a Buyer’s Advantage, with the quarterly trend heading deeper toward Buyers.

Mountain View:

Currently, the Average Price of a Single Family Home in Mountain View is $905,205 with a range of $459,000 to $1,575,000. 41% (versus 33% last month) of the homes in Mountain View have had price reductions, and the average number of Days on Market has fallen to 56 from 75 days from last month. Overall, Mountain View remains a Buyer’s Advantage market, with the quarterly trends holding there as well. The neighborhood mix is very important in Mountain View. Downtown (94041) and the west side (94040)

are continuing to be stronger than 94043 which is consistent with Mountain View’s bifurcated market. Well priced homes in 94040 are still getting multiple offers and selling in 1 – 2 weeks.

One upcoming aberration is the new Enclave development on Grant Road in 94040. This development of 59 homes has begun selling with homes in the range of $1.8M – $2.1M, which will affect the average prices in 94040.

Palo Alto:

In Palo Alto the Average Price of a Single Family Home is $2,033,781 with a range of $725,000 (2 bedroom, back to RR tracks) to $8,795,000 (reduced from $10,988,000). 24% (up from 22% last month) of the homes in Palo Alto have had price reductions, and the average number of Days on Market has risen to 68 from 55 last month. The market in Palo Alto has consistently been more of a Seller’s Market than the surrounding communities this year, and this continues with a Market Action Index of 32.9, Sellers’ Advantage. The number of homes in Palo Alto that have been relisted to reset the Days on Market numbers has risen from 3% last month to 7%, as sellers are returning to the heating market. Is it also interesting to look at the market variations across the different zip codes and

price ranges, as Palo Alto has such a large variation in quality/desirability of neighborhoods and property values.

Portola Valley:

New to our market coverage is quiet Portola Valley. Traditionally, Portola Valley has been a forgotten rural cousin to Woodside, with a limited pool of buyers looking for something up in the hills and forests. This year, Portola Valley has heated up, with homes selling relatively quickly, especially in the Ladera Ranch neighborhood. Now we will start putting some numbers to those subjective terms.

Currently, the Average Price of a Single Family Home in Portola Valley is $3,444,653 with a range of $749,000 to $20,000,000. 34% of the homes in Portola Valley have had price reductions, and the average number of Days on Market is 133. Overall, Portola
Valley is consistently a Buyer’s Market, and currently is a Strong Buyer’s market with a Market Action Index of 14.7.

Woodside:

In Woodside the Average Price of a Single Family Home is $3,799,776 with a range of $518,000 to $19,000,000. 40% of the homes in Woodside have had price reductions (vs. 31% last month), and the average number of Days on Market has fallen from 175 to 162. The market in Woodside is consistently a Buyer’s Market as there is little demand for the homes up in the mountains (where the $518,000 house is), and even less for the expensive horse properties closer to town and civilization ($19,000,000 for 20 acres). 5% of the homes on the market in Woodside have been relisted to reset the Days on Market statistic, vs. 4% last month. Interestingly, over the last 3 months, the market has been trending toward Sellers, particularly at the high end, as pre-IPO wealth has started moving in the valley again. There is still no better way to let people know you have arrived than a horse estate in Woodside!

If you know of anyone who would appreciate having this market information delivered to them monthly, please forward this message to
them, or CLICK HERE to send an email with your cities of interest. If you are a data junkie, you can receive these reports weekly, just register at:http://www.ventouxhomes.com/to select the markets and reports you would like to receive.

If I can answer any questions for you regarding the market, or otherwise be of service to you or a colleague, please contact me directly

at: 650-450-0450.

Posted in Los Altos, Los Altos Hills, Menlo Park, Mountain View, Palo Alto, Portola Valley, Statistics | Tagged , , , , , , , , , , | Leave a comment

July 2011 Market Update

Posted on July 5, 2011 by Chris

It’s July, and we are in the depths of a summer heat wave. Not only is the weather hot, but so is the local real estate market.

With inventories trending about 70% of last year, and 50% of 2009, the local market is starting to resemble a giant game of musical chairs, as buyers who miss out on a house in a multiple offer situation are then willing to pay a premium for the next one. Each round the stakes escalate.

Silicon Valley optimism is in full force as we swing into summer, and pre-IPO money is flowing in the valley. In Los Altos Hills, Portola Valley and Woodside, estate homes are selling for asking prices, at a rate we haven’t seen in years. These areas were particularly hit in the downturn over the last few years, and we are seeing a real rebound in activity, if not prices. The recent IPO filing of social media game developer Zynga, and continued speculation about the coming Facebook IPO are fueling excitement and buyers jumping on the bandwagon.

Most areas continue to be Buyer’s Markets, but pricing and presentation make a huge difference, and we have had multiple offers on 80% of our listings this year so far. Our latest condo listing on Grant Avenue in Palo Alto received a pre-emptive offer the first day on the market for well over the asking price.

Buyers are looking for value, and when they find it, they are pouncing. Buyers continue to be better qualified than in years past, and we have yet to have an issue with appraisal or financing with our clients on either the Buy or Sell side in the past year.

Pricing trends are all pointing to stability, with minor inflections in micromarkets and price ranges. Entry level Palo Alto continues to be hot, with almost all single family homes under $1.5M receiving multiple offers, in some cases 10 – 15 offers. The current record holder is 1520 Middlefield Road, which received 25 offers and sold for over $1,150,000 vs. a below market list price of $900,000. Still, this is for a house with significant deferred maintenance and foundation issues on a busy street with significant traffic congestion. Wow.

In a nutshell, more of the same for our area.

I’m often asked if this is another blip or bubble, so I’ll point to this article in the Wall Street Journal from last week that looked at housing nationally, and the underlying fundamentals. While we are an outlier here, I take some comfort from not being WAY out.

http://online.wsj.com/article_email/SB10001424052702304563104576361522020024248-lMyQjAxMTAxMDAwODEwNDgyWj.html

Finally, I want to put in a quick plug for our new website, http://www.ventouxhomes.com/. It now features a wealth of community information and market data, for out of towners, plus new neighborhood based search functionality, so you can track what is going on in Palo Alto’s Crescent Park, The Glens of Woodside or Mountain View’s Cuesta Park neighborhood. We have put in a lot of work recently, and we are continuing to add content and features. Please surf on by and let us know what you think of our efforts.

On to the numbers:

Atherton:

The Average Price of a Single Family Home in Atherton is $5,914,769 with a range of $999,998 (reduced from $1,150,00) to $17,800,000. 21% (vs. 21% last month) of the homes in Atherton have had price reductions, and the average number of Days on Market is 133 days, versus 127 last month. Atherton is still a Strong Buyer’s market, as inventory is pretty limited with only 39 homes currently for sale across a very large price range. This is the same last month. Atherton remains deeply in Buyer territory with prices trending down and time on the market trending up as we head into the dog days of Summer.

Los Altos:

Currently, the Average Price of a Single Family Home in Los Altos is $2,171,446 with a range of $1,198,000 to $4,950,000. The highest priced home in Los Altos continues to be The Castle, a 1928 historic home on the 11th fairway of the Los Altos Country Club.  37% (versus 34% last month) of the homes in Los Altos have had price reductions, and the average number of Days on Market has decreased from 86 to 84. The Los Altos market remains a Strong Buyers’ market, and holding stable, even with declining inventory.

Los Altos Hills:

In Los Altos Hills, the Average Price of a Single Family Home is $4,207,748 with a range of $1,225,000 to $20,500,000. 30% (versus 29% last month) of the homes in Los Altos Hills have had price reductions, and the average number of Days on Market has risen to 153 days from 149 days last month. Los Altos Hills remains a Strong Buyer’s Market, with a Market Action Index of 13. Even though it is starting to trend toward Sellers, it is still deal time for Buyers in Los Altos Hills.

Menlo Park:

This month, the Average Price of a Single Family Home in Menlo Park is $1,321,976 with a range of $250,000 to $4,895,000 (The $239,000 is in East Menlo Park. The bottom of the Menlo Park market is about $800,000). 41% (40% last month) of the homes in Menlo Park have had price reductions, and the average number of Days on Market has fallen to 91 days versus 121 last month. Menlo Park remains rooted in Strong Buyer’s territory, and the quarterly trend for the overall city is holding there.

Mountain View:

Currently, the Average Price of a Single Family Home in Mountain View is $929,193 with a range of $499,500 to $1,780,000. 33% (versus 33% last month) of the homes in Mountain View have had price reductions, and the average number of Days on Market has held at 75 days from last month. Overall, Mountain View remains a Buyer’s Advantage market, with the quarterly trends holding there as well. The neighborhood mix is very important in Mountain View. Downtown (94041) and the west side (94040) are continuing to be stronger than 94043 which is consistent with Mountain View’s bifurcated market. Well priced homes in 94040 are still getting multiple offers and selling in 1 – 2 weeks.

Palo Alto:

In Palo Alto the Average Price of a Single Family Home is $2,002,498 with a range of $630,000 (lot value) to $8,795,000 (reduced from $10,988,000). 22% (up from 16% last month) of the homes in Palo Alto have had price reductions, and the average number of Days on Market has fallen to 55 from 63 last month. The market in Palo Alto has consistently been more of a Seller’s Market than the surrounding communities this year, and this continues with a Market Action Index of 37.9, Sellers’ Advantage. The number of homes in Palo Alto that have been relisted to reset the Days on Market numbers has risen from 1% last month to 3%, as sellers are returning to the heating market. Is it also interesting to look at the market variations across the different zip codes and price ranges, as Palo Alto has such a large variation in quality/desirability of neighborhoods and property values.

Woodside:

In Woodside the Average Price of a Single Family Home is $3,462,889 with a range of $500,000 to $15,000,000. 31% of the homes in Woodside have had price reductions (vs. 33% last month), and the average number of Days on Market has fallen from 175 to 146. The market in Woodside is consistently a Buyer’s Market as there is little demand for the homes up in the mountains (where the $500,000 house is), and even less for the expensive horse properties closer to town and civilization ($15,000,000 for 20 acres and a teardown quality house with historical significance). 4% of the homes on the market in Woodside have been relisted to reset the Days on Market statistic, vs. 6% last month. Interestingly, over the last 3 months, the market has been trending toward Sellers, though it is now swinging deeper into Buyer territory, particularly at the high end, as pre-IPO wealth has started moving in the valley again. There is still no better way to let people know you have arrived than a horse estate in Woodside!

If you know of anyone who would appreciate having this market information delivered to them monthly, please forward this message to them, or CLICK HERE to send an email with your cities of interest. If you are a data junkie, you can receive these reports weekly, just click on that How’s The Market? banner on the right to select the markets and reports you would like to receive.

If I can answer any questions for you regarding the market, or otherwise be of service to you or a colleague, please contact me directly at: 650-450-0450.

Best regards,

Chris

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Back in the Bubble – Recovery or a Short-Term Frenzy?

Posted on June 23, 2011 by Chris

Tongues in Sillycon Valley are wagging over this Spring’s spate of multiple offers and overbids, as detailed in this article from Bloomberg, which states that prices in Palo Alto are up 20%.

Up 20% in a struggling economy? Hmmm, the antenna just went up and something seems fishy.

There is a lot of pre-IPO wealth flowing in and around Palo Alto, and new money means entitlement, so we have a lot of buyers who are willing to pay a premium to get what they want. While the Bloomberg article details overbids, much to the jump in the median is due to increased sales of homes above Palo Alto’s median price point of $1.6M. As we learned in Statistics 101, adding more data points above the median will pull the median upward. Whether the price of a particular home has actually risen 20% is another discussion entirely.

The other question is how sustainable this current bubble / mania is. We got into trouble in 2008 because the ratio of housing prices to incomes got too far out of balance, causing a correction where housing values dropped 10% – 30% depending on price point (more pain at higher price points).

As a market pessimist, I’m not jumping on the Palo Alto buying bandwagon, but if you have a house in Palo Alto you are considering selling, now is definitely the time! Call now, operators are standing by!

You can read the Bloomberg article in its entirely here, and please feel free to comment below. What do you think will happen to prices in Palo Alto in the next year? Up, down, recovery, crash?

Or does it not matter because of The Rapture?

Thanks for reading . . .

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Affordable Rentals Becoming Scarce In The Bay Area

Posted on April 28, 2011 by nancyc

CBS San Francisco, Yahoo News, April 28, 2011

SAN FRANCISCO (KCBS) — A new Harvard study has found that finding affordable places to rent here in the Bay Area and nationwide is becoming more and more difficult.

The report from the Harvard Joint Center for Housing Studies found that one in four renters spends more than half their income on housing, the highest level in a quarter century.

And the latest data from MPF Research, which tracks the apartment sector’s latest statistics, found that San Jose had the highest rent increase nationwide from March 2010 to this March. San Francisco and Oakland also ranked in the top eight in the nation in terms of fastest growing rents.

Why?  Read the article at:  http://goo.gl/KAJcP

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Your Retirement Home: Is Now the Time to Buy?

Posted on April 25, 2011 by nancyc

The KCM Blog, April 25, 2011

The last several years have wreaked havoc on many people’s plans for retirement. They have seen their nest egg dwindle and in some cases disappear. Many have pushed back the date they will stop working and some have stopped even thinking about what part of the country to which they plan to relocate. For some however, this may be the time to again begin putting their retirement plan together.

There is a tremendous opportunity right now to buy a home at a sensational price in certain traditional retirement destinations. Couple that with the fact that in other parts of the country the housing market is still experiencing falling prices and we may be looking at a perfect window of opportunity to buy your retirement home.

What caused prices to tumble throughout the country was the emergence of distressed properties (foreclosures and short sales). These discounted properties put tremendous downward pressure on the values of the other homes in the region. The states that are clearing this inventory rapidly are the states where prices will recover more quickly. The states that were first hit with the housing crisis (Arizona, Nevada, California and Florida) are now the first to show signs of a recovery because they are selling off their distressed properties at a faster pace than many other parts of the country.

There are definitely challenges for many in the current housing market. At the same time, opportunities exist for others. Sit with a real estate professional who can give you the right data to help determine whether such an opportunity currently exists for you.

Read the article at:  http://goo.gl/l5UNH

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