Los Altos Real Estate Blog

There has been a lot of controversy in the recent past about cell phone towers in Los Altos.  A vocal minority of people there, and in other places, don't want the towers because of appearance issues and concerns over radiation.  Unfortunately, without the towers our cellphones don't work.  All the promises of 3G or 4G data service on iPhones and Android phones are out the window without strong signals.  Which begs the question; do we need to disclose if cellphone service is poor?

I was at a house in Sunnyvale recently that had no 3G service inside the house (or outside for that matter).  Inside the home, the call quality was marginal and depended on where I stood.  This is especially frustrating because

1. the home is in the middle of Silicon Valley - the poster child for modern technology
2. the home is located in a flat area with no geographic obstructions

If I were a buyer for that home, I would have noticed the lack of cellphone service and made it a priority to determine if the issue was with my phone or the provider.

Could the lack of cellphone service become a condition for cancelling a contract?  Is it an aspect of the property condition in the eyes of the law?  For me personally, it would be a deal killer.  Never mind the fact that Silicon valley should have 4 bars in every single location, it's crazy that in any house in the flatlands there would be anything less than a strong signal.  I understand that the distribution of cell towers impacts signal coverage.  Fine.  Then we probably need legislation that mandates a minimum distribution so coverage, especially in major metro areas, is 100%.

If the buyer uses their cellphone in place of a landline, then the lack of signal could become a safety issue.  If they can't get a signal to dial 911, then what happens in an emergency?  Again, this is, in my opinion, an issue of property condition.  It may be a condition that impacts many properties nearby but it still impacts the property.  Does it impact value?  Probably not but it could make it less appealing to many buyers.  Again, neighbors taking issue with towers in their area need to be realistic about denying access to a sometimes necessary service.

There are laws in place mandating utilities (water, power, etc) but none in place to mandate phone or cellphone services.  Perhaps it's time to change that.  If not, then the time may come when disclosing a bad cellphone signal may be required.

A friend of mine has created an application designed to measure the dimensions of objects in photos.  Personally, I think this is a great app for agents who quickly take photos of homes and need to measure the size of rooms, photos, etc after the fact.  This could also be handy for relocation clients wanting measurements after seeing a home.

Introducing:

MultiMeasure - a photo based measuring application for iPhone and iPad

The task of having to physically measure objects around homes is often tedious and time consuming.  While it may be essential during the course of buying or selling a home, it often comes up after the fact leaving the agent stuck with going back to the house to manually measure one or more rooms, windows, etc.  With MultiMeasure, you do away with all those troubles. Just a couple of quick finger swipes on an existing photo and you have your measurements. It's that easy!

MultiMeasure is designed to give very accurate measurements and allows for picture perfect positioning. Features include saving measurements to your iPhone or iPad and sharing results via email. This is the perfect photo-based measuring application for real estate agents!

ULTIMATE MEASURING EASE AT YOUR FINGERTIPS!

For More Details:

Application website : http://multimeasure.moplease.com

'How to' video : http://www.youtube.com/watch?v=rDc95_k8oOw

Link to Apples App Store : http://itunes.apple.com/us/app/multimeasure/id396067036?mt=8

Price: $1.99      ** Current promotional price (thr' Jan 31st, 2011) for app is $0.99 **

Many of the high-end markets in California have made great strides in 2010.  Some markets that had been hit hard in 2007-2009 came back strongly in 2010 with solid gains in median and average selling prices.  A recovery of expensive real estate is important because when the high-end markets do well, the lower-tier markets do well too - usually because of move-up buyers.  So when the media decides to report on the health (or lack thereof) of the high-end markets I'm ready to jump in with facts!

BusinessWeek reporter Andrea Wong wrote an article entitled "In America's Richest Small Towns: Big sales Stall"  about high-end real estate sales in expensive small towns around America.  Local markets Los Altos Hills (where I frequently do business) and Woodside are always on lists like this.  In the article the writer states that the price of homes dropped 13.6% in 2010.  That's incorrect.  The average selling price dropped less than 1% and the median dropped about 5%.  Either way, the figures are wrong.

Assuming the writer was also including raw land, those values are even less in line with the article.  Land prices rose 13% in Los Altos Hills (based on 3 closed sales) but the median dropped 18%.  Those 3 sales (totaling over $5 million) have little impact on the average or median sales prices of property overall in Los Altos Hills so again, the article is wrong.

It's interesting that the article casts a pall over the entire high-end market by saying that 33 of the 50 towns on the list dropped.  Los Altos Hills ranked #4 on the list which makes it one of the more important towns upon which to base the statistics.  However, if one of most critical towns hasn't actually seen that much of a drop, it makes me wonder how far off the other figures are.

I myself have more than one client looking at homes priced $4-8 million and I know other agents who are writing offers with similar clients of their own.  This segment of the market is not as bad as this article portrays and we'll see a lot of activity in 2011.

I was sworn in last week as a director-at-large serving a 2-year term on the board of directors at SILVAR, the Silicon Valley Association of REALTORS.  This follows my previous service as Los Altos/Mountain View District Chair for 2010.  My primary focus will be on advancing the technology used by our agents including the MLS.  As part of my duties I'll also be helping to organize the next Tech Trilogy which is a 3-part technology education seminar series delivered to members of the association.

In addition to serving on the local board, I will be serving again as a director for the California Association of REALTORS.  My services there will include working with the Federal Committee and the Housing Affordability Foundation.  In the latter committee, I'll be helping to raise funds to ensure housing is available to those who can't afford it in the difficult California market.  In working on Federal issues, I'll do what I can to take on critical issues including the mortgage interest deduction.

As most buyers know, there are very few default notices in Los Altos or Los Altos Hills.  Now we hear word that default notices are dropping again in Santa Clara County as a whole.  An article in the San Jose Mercury News reports that default notices (often mistakenly called foreclosure notices) dropped year-over-year in 2010, down over 33% to 10,052.  That's still higher than 2007 but it shows a trend driven by a stronger economy.

There are 11 properties in Los Altos with notices of default filed at this time.  Most of these will either have the default corrected (by bringing the loan current) or they'll be sold on the open market.  There are only 4 properties in Los Altos that have become "bank owned" or REO properties.  One of those has been on the market for a long time because it's in an undesirable location and the property condition has deteriorated considerably.  Poor locations are a common theme with foreclosed properties in Los Altos and Los Altos Hills.

Los Altos Hills has 3 properties with notices of default at this time.  The homes are a mix of moderagely sized homes (for the hills) and generally they will also be sold on the open market.  Recent REO homes in Los Altos Hills have been priced very low and some have gotten 50+ offers (many all cash) pushing the prices up to or close to market rates.

The market will see a few more of these in the coming year but the trend has been to sell these homes before they hit the market.  If you're looking for a bargain on foreclosed properties, there are two things to consider; location of the property and general market strength.  The properties that don't sell in the open market are usually in very poor locations which is why they stay REO for so long.  The rest sell at market rates because the market in Los Altos and Los Altos Hills have recovered substantially from years past.

This is a quick update on the performance of several local markets around Silicon Valley.  As the statistics below clearly show, most markets showed nice price gains in 2010 including most of the luxury markets.  These figures indicate that the trend down has stopped and the trend up is beginning again. While the markets are improving, this doesn't mean we've entered a seller's market where prices will spiral upward in the hot spring market.

I expect that this year we'll see most markets improve in the 1-6% range again (depending on the market).  The hottest markets from last year will likely cool down a little this year and the softer markets will likely see larger gains this year.  What will drive these price increases includes corporate spending, job growth, and low interest rates.  As the high-tech industry continues to recover, move-up buyers from the lower end of the market will start entering upgraded markets such as Sunnyvale, Mountain View, and Cupertino.  Sellers from those markets will continue moving to Los Altos and Palo Alto further driving demand.

                                        2010 Market Summary Statistics

                                                  Average Selling Price

                                 2009                   2010                  Change

Los Altos                $1,654,914          $1,688,322              +2.0%

Los Altos Hills         $2,614,368           $2,590,416              -0.9%

Mountain View        $946,438              $956,709                 +1.1%

Sunnyvale              $714,442              $760,772                +6.5%

Cupertino               $1,121,641           $1,112,847              -0.8%

Saratoga                $1,557,682           $1,646,386              +5.7%

Palo Alto                $1,516,480            $1,557,004             +2.7%

Menlo Park             $1,239,814            $1,309,892             +5.7%

Atherton                 $3,317,045            $3,510,434             +5.8%

Downtown Los Altos is at the forefront of major changes to build more offices, retail space, and residential units.  The area with the biggest developments in the near future is First Street.  The entire street was rezoned to allow residential, better retail, and more office space.  However, a recent article in the Los Altos Town Crier brings to light concerns about traffic congestion.

Personally, I'm with most people who feel that having a little traffic congestion is a sign of success.  It's rare that you can't find a spot unless there's a major event.  The loss of so many downtown businesses has made traffic and parking nearly non-existant.  The concerns about major traffic congestion on First Street and Main Street are based in the idea that downtown Los Altos should be a "sleepy little town".  Unfortunately, for the businesses to thrive, we need more people and that often, but not necessarily, means more cars.

Adding 48 condos on First Street will help downtown a little but it won't be enough to drive real growth.  It's a start.  Another 150-200 on top of that would create real critical mass and those residents would be foot traffic, not car traffic.  That's probably why the traffic study didn't show an appreciable increase even with all the new construction.  The question now is, where to add those living units.  The new zoning regulations approved in 2009 will allow for residential units above retail on Main Street.  That would be a huge step in the right direction but those residential units will mostly generate foot traffic.  The homeowners may have cars but with jobs and services right down town, the frequency of car traffic will probably be very low.

PROPERTY DETAILS

24855 Prospect Ave, Los Altos Hills 94022

4 Bedrooms / 3 Bathrooms with 2850 s.f. on a one acre lot (43,560 s.f.) - $2,589,000

This gated, private home was originally built in 1967 and was completely remodeled by DeMattei Contraction in 1997.  The workmanship is superb and is reflected in the "new-like" feel the home has.  There is a large deck with pool that offers ample space for entertaining along with views of San Francisco, Oakland, and the SF Bay.  Located directly behind the home is Morgan Manor, one of the finest estates in California originally on the market for $45,000,000.  The neighborhood has many significant estates making this an ideal long-term location.

With the stellar views comes a great deal of privacy as direct views of neighbors are blocked by mature trees and landscaping.  Along with the large deck and pool area, a spacious yard and adjoining kids playhouse offer opportunities for recreation and relaxation. 

The home has all the expected features including hardwood floors, tile entry, dual-zone heating and AC, 6-burner gas stove, built-in fridge, inside laundry, and master suite with sunken tub and separate shower.

I'll be holding open this fine home on Sunday from 1:30-4:30PM.  Stop by and take a look at this beautiful home.

Los Altos has lost another fine restaurant from it's line of greats - Zitune.  They shut the doors on Monday after determining that the patron traffic wasn't enough to stay in business.  The final dinner on Sunday night was bittersweet because many patrons showed up for one final meal at the 4-year old restaurant.  There was a nice story in the Los Altos Town Crier about all the reasons for ending the business.

I've eaten at Zitune many times and found the food to be creative and first-class quality.  The service was good and the staff welcoming.  The last time I was there in late November with a group, we had a mix of menu and special items that impressed everyone.  One thing that surprised me was that the restaurant was, in fact, relatively quiet for prime lunch time.  I don't think the Los Altos lunch crowd gave them the appropriate level of attention, even when they offered really good lunch specials.

The busiest Los Altos restaurants always seem to have a steady stream of people every day.  Some notable popular Los Altos spots include Le Boulanger, Aldo, Spot Pizza, and Main Street Cafe.  While we need more good restaurants, one of the issues with getting critical mass is a lack of offices downtown with people wanting lunch.  There are plans for more offices on the table and construction has already started on the new Packard Foundation building on 2nd Street.  As more offices are built, we should have more foot traffic and hopefully that will translate into fewer good restaurants closing.

December was a busy month for Los Altos real estate.  I had posted an earlier report indicating that we had 29 sales that closed as of December 28th.  That figure is revised down to 26 as some homes sold were misreported.  There was one sale at $820,000 that I am not counting in the statistics for the month because it's considered a statistical anomoly.  It's less than half the average sales price and well below the normal sale range.

When removing that sale, the average selling price in December 2010 is flat compared to December 2009 at $1.61 million.  The mnumer of closed sales is the same at 25 and the inventory is slightly lower at 33 units, compared to 38 units in December 2009.Total sales volume was up about 8%.

There were a few homes that expired on December 31 at midnight so the actual inventory dropped a little as of January 1st.  Those homes could come back on the market in the next few weeks.  A number of homes were taken off the market in December and are starting to come back on.  One property in South Los Altos has come back on with a 6% price reduction.

As expected, the average selling price and median selling prices are up in 2010 versus 2009.  The average and median for 2010 were $1.688 million and $1.55 million respectively.  The average and median in 2009 were $1.654 million and $1.51 million respectively.  These are small increases but they show that the market has recovered and we're now in a balanced market, it is neither a buyers nor sellers market - in general.  It is still a buyers market at the high-end for homes priced over $3 million.

The total number of new listings were about the same, 437 (2009) versus 440 (2010).  The days on market dropped quite a bit from 65 to 54 in 2010.  The total number of closed sales rose significantly from 269 to 334 in 2010.  All the figures support a full recovery in the Los Altos area.  This should help the general market in surrounding areas as well by bolstering confidence in a prime market, move-up markets nearby such as Mountain View and Sunnyvale should improve as well. 

The improvement in the average selling price of about 2% is indicative of where the market will continue to go.  The balance of buyers and sellers should keep prices moving up and discounts have all but disappeared.  The current low inventory and lack of new listings indicate a potential squeeze in Q1.  That will become more clear as we finish out January.