Los Altos Real Estate Blog

You've been working out, exercising hard, losing weight...all...year...long.  For what?  The Epic Season Of Overconsumption also known as Thanksgiving Week.  All that weight lost, gained back over a week!  Thanksgiving Day alone is a feeding frenzy from morning till night, but it's this whole week where you go to office parties, friends parties, extra snacks laying around, and more that adds on calories all week long.  If each pound we gain is 3500 calories, you're probably packing on 1-2 pounds a day with all the food being offered.  I gain weight just looking at a bowl of french-onion dip and a bag of Ruffles Potato Chips!

OK, how much are you planning to gain this season?

How about this, trying gaining just 1 pound.  That's right, a total of 3500 calories which, honestly, is about what you take in during an epic Thanksgiving Day feast.  Have fun, don't worry about food, and enjoy the day.  But, to burn it off you have to do weights (builds muscle mass) and cardio (burns fat and thus calories) to the tune of 30 minutes each day for 1 week.  Where else can you trim calories to have fun without putting on weight?

• Soda:  Regular soda=150 calories  Diet soda=zero calories
• Candy:  Regular candy bar=300 calories  No candy bar=zero calories
• Butter:  1 pat (tbsp)=100 calories  Half-pat or margarine spread=50 calories
• Use low-fat sour cream instead of regular
• Eat more veggies
• Drink less alcohol and stick to wine/beer

Personally, I'm going to the gym at least 4 times this week just to stay on track.  I'm not a workout junkie but I'm staying in shape so I can have the food without feeling guilty.  Have fun this week, eat healthy, and stay in shape.

Real estate markets across the U.S. are faced with a lot of very real challenges - high unemployment, high inventory, foreclosures, short sales, low consumer confidence.  Every one of these things is real, tangible, and has a detrimental impact on the psychology of the American home buyer.  The stress of these issues is made worse when the mainstream media report national-level statistics such as housing starts dropping one day followed the next day by a positive report of existing home sales.  For "Joe Consumer" the news is wishy-washy, scary, and makes them FEAR selling or buying a home.

I'm inspired by the recent contest asking bloggers to write about economic recovery in their area.  It seems to me that the biggest issue in our markets is that we seldom see the positive real estate news that exists.  It comes in many forms and it appears in even the worst markets.  Inventory declines, sales prices leveling off, sales to list price ratios increasing, etc are all signs of a recovery.  Those and many other tidbits of postive real estate news were conveyed during that recent contest.  Here's the rub, I want to bring that news to the attention of the mainstream media.  However, this is not a one man project.

Here's what I want to do:

• Tweet your recovery articles and market reports with direct links and attribution to you
• Interview you on a new Blogtalk Radio channel called "Positive Real Estate News"
• Get you in touch with local reporters to interview for real estate articles

After a month or so of networking you with local press and building the buzz on the concept of "Positive Real Estate News", I want to bring this whole effort to the attention of major papers and national news outlets.  I want to blow the lid off the fear, uncertainty, and doubt that keeps a sustained recovery from happening.  We're trying to rebuild faith in the American housing market and that'll take time and effort.  You want national media attention?  You got it.  We have thousands of voices here and we could use it to rise above the economists and media pundits to shed light on what is working, no matter how small, in every market in the country.

Are you with me!?  Let me know! 

You asked for them and you got 'em!  Now the power of social media is fully realized in the individual articles of every blogger on Activerain.  I have to say, this is one of the most powerful and useful features I've seen added in a long time.  The beauty part of it is that you can build much better ranking in both social networks and search engines as a result of this new feature.

 LIKES:  The first button is the "Like" for Facebook.  The best thing about being liked on Facebook is that the articles you see the most activity on are the ones that show up in newsfeeds at top priority.  Unless your friends are all looking at "Most Recent" they'll see your "Liked" articles over others.  Plus, sites or articles on Facebook with a lot of likes will get picked up by Google and other search engines.

Google +1:  As you're well aware, getting hundreds of these will do wonders for your SEO and help put you or keep on on Page 1 of the SERPs.  The more people who like an article, the better as it shows up as having more authority than other similar pages.  By having the button on here so easily used, your subscribers can click articles they think are good and boost their rankings.  So, for all my subscribers - PLEASE CLICK +1!  Thanks!

LinkedIn Share:  For professional networking, it's hard to beat LinkedIn.  I have most of my fellow REALTORS networked on LinkedIn and publishing regular stories there let's them know I'm active in the market.  So, this makes it easy to share my articles and for my readers to share my articles with others.  Again, it gets me more exposure on another major social network.  Another huge plus to this is that when people share my articles on LinkedIn, it will help boost my Klout score!

Tweet:  For those of your on Twitter, all your blogs should be posted there.  This button makes it easy for people to not only reblog your articles (which boosts the deep linking Google likes so much) but also makes it easy for people to get your reblogged articles into Twitter which is also good for SEO and helps boost your Klout score.

So - THREE CHEERS FOR ACTIVERAIN!  These new features are going to be HUGE!

The vast majority of the public use those terms interchangably.  The public doesn't realize there is a difference between the two and those that do recognize a difference don't understand what it is.  It's been a huge gap in NARs marketing to not promote this difference.

The biggest difference between a REALTOR and just a real estate agent is the NAR Code of Ethics.  It's akin to "the force" that binds us together and makes us inherently better than the random guy out selling homes.  Does this mean that all agents who are not REALTORS are bad people?  No.  It simply means that REALTORS are bound by a higher degree of ethical behavior.  Those ethics are a major part of what ensures ethical conduct at the negotiating table, dealing with lenders, and treating everyone in the transaction with the respect, courtesy, and honor they deserve.

Why does a code of ethics make REALTORS better?  Simply put, it governs how we conduct business.  Some examples include:

• cooperating with other brokers and not use a listing simply to capture buyers and "double-end" the sale
  
• accurately representing offers to sellers and not excluding any of them
  
• not misleading the seller as to the true value of a home so as to "buy" the listing
• disclosing all the facts they know about a property to both buyers and sellers
• and many more...

The growth of the foreclosure and short sale markets has made the real estate industry a sort of "Wild West" where agents, who don't abide by the Code of Ethics, conduct business to their own advantage or at the expense of their clients.  The lack of ethics casts a shadow over the industry and the public assumes a lack of professionalism across the board.  A REALTOR holds ethical conduct in the highest regard.  The can and will treat everyone in a transaction accordingly.

To see the details, take a look at the National Association of REALTORS website with the latest version Code of Ethics.

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 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.  It's important to note that this time of year is often a very difficult time to predict sales at extreme ends of the market.  Therefore, it's possible that in the Spring, we'll see a much better view of buyer sentiment.  Hopefully the strong market will continue and we'll see the high-end get much more activity than it has.  Generally, if the mid-range is doing well, the high-end is soon to follow.

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.  I'm willing to bet that by the end of Q1 2011 we'll have the answer and this trend will continue.  This same conclusion applies to Los Altos Hills.

Just in case you've been tracking inventory in Los Altos Hills, there have been 6 homes taken off the market in the last 2 weeks that will specifically be brought back in 2011.  This is a common practice because the high-end market has been slow for many years now and Los Altos Hills isn't immune to bargain hunters looking for deals.

There are currently 42 homes on the market in Los Altos Hills, and the 6 homes taken off the market account for about 15% of the total inventory.  While this doesn't mean a record low, it's unusual to see so much inventory disappear in such a short time as a percentage of available inventory.  What's even more interesting is that ALL of the listings have notes indicating that they'll be back on in the following year or are still available.  The message to buyers is "We'll come back to the market when there are more buyers and we're likely to get a good price."  There are still a significant number of buyers looking in Los Altos Hills who are looking for substantial discounts and sellers are simply putting their foot down, unwilling to discount further.

What does this mean for buyers?  Basically it means what was stated with similar homes last year, sellers are hoping to get more for their homes in the Spring.  The trend on newer homes has been to see prices drop.  However, the price per square foot on older homes has been increasing.  So, about half the homes just taken off will increase their chance of getting an offer at asking price but the other half (larger, newer homes) will probably see more bargain hunters.  If you want a good deal on a home in Los Altos Hills, you need to get in and make a decision quickly, negotiate hard, and make sure the seller is truly motivated.  As it looks now, many sellers are simply pushing back and the future trend is likely to see prices move up.

This park, located at the end of Rosita Avenue in Los Altos, has been a spot for tennis, BBQ, kids playing, and more for decades.  I remember going to this park when the pool at Covington School was still available to swim in.  Nearby the park was a Catholic School with a large field for baseball and general play.

Now the park will be completely updated with a cleaned up baseball diamond, three new tennis courts (instead of the current 2), a childrens play area, new trees and shrubbery, and more.  It's the most money the city has ever spent on a park which bodes well for this gem literally at the heart of Los Altos.

I think this park, along with many others in Los Altos, it part of what makes this town so special.  We have a very active community who likes to be outside for sports and recreation.  Keeping our parks in great condition and continually improving them goes to the core values of Los Altos.

Stop by the Los Altos Town Crier for more details and a small picture of the new park.

October was a mixed month for the Los Altos Hills real estate market.  As I said in my preliminary report, the sale of one $8 million home has skewed some of the value.  That's most evident in the percentage of listing price received.  That was down to 88% in October 2010, down from 95% a year ago.

The median and average sales prices were $2,150,000 and $3,012,000 respectively.  Last year, those figures in Los Altos Hills were $2,435,000 and $2,545,000.  So, the average is up (due to the one large sale) but the median is down.  Median has little meaning for this month because there were only 8 sales, compared to 11 in 2009.  Inventory was up to 64 units vs. 58 a year ago and new listings were up to 14 from 6 a year ago.  The trend is more inventory and fewer sales but few days on market (only 102 vs. 128 last year).

Sales Over $2 and $3 Million

There were 3 sales over $2 million and each was very close to their asking price.  There was 1 sale over $3 million (except the $8M property) and it was also very close to its asking price.  Those are critical for the stats in Los Altos Hills because the market in the $2-3 million market band has had trouble still this year.  As I said in my last report, one month is not a trend but it could bode well in establishing 2010 as a turning point in the high-end market of Los Altos Hills.

One Big Sale

The home that sold for $8.2 million was listed at $10.9 million so that has skewed a few numbers.  The bright side of October 2010 is that all the other homes sold for close to their asking prices.  This would seem to indicate that homes priced well are in fact getting solid offers.

Comparison to September

The October market in Los Altos Hills had fewer new listings, lower inventory, more sales, lower days on market, and a higher average selling price which is all good for the long-term trend.  The activity of buyers in November indicates that this trend could continue.  What will impact sales this month is the loss of several selling days due to holidays.

The month of October was great for Los Altos real estate.  The final numbers show that October is one of the strongest months for selling homes in Los Altos for many, many months.  There were 34 homes sold compared to 25 sold in October 2009, and 19 in September 2010.  The average selling price was  $1.94 million which is much higher than any previous month this year.  What drove this bump was sales over $2 milion and strong performance in the market band of homes in the $2-3 million range.

The median and average sales prices were $1,737,000 and $1,940,000 respectively.  Those figures in Los Altos were $1,580,000 and $1,710,000, respectively, in October 2009.  Inventory was down to 73 units vs. 89 a year ago and new listings were down to 26 from 36 a year ago.  The percentage of listing price sold is up to 97% from 95% last year.  This shows that Los Altos is doing much better.

Sales Over $2 Million

Los Altos had 4 properties listed over $3 million that were set to close this month and of those, 2 actually closed over $3 million, one was within $15,000 of that mark, and the last was at $2.775 million.

Los Altos had 8 properties listed over $2 million and all of them sold for over $2 million.  This is huge for this market segment because as I had reported in September, homes in this price range have been selling with no up or down movement.  We'll see how sales this month change the course of median and averages in this critical high-end of the Los Altos market.

Days On Market

The Average Days On Market did not skew to the high side even with the sale of a few homes that had been on the market a long time.  the average days on market for Los Altos in October was 59, down from 75 in October 2009.