Los Altos Real Estate Blog

The real estate market in Los Altos Hills started to come back around in Q4 of 2010 with smaller homes, under 3000 sq. ft. selling close to their asking prices.  That was the beginning of a trend in which prices are definitely coming back up from the slump we've experienced in the last 3 years.

Los Altos Hills saw a huge surge in sales and prices in March 2011 with several high-end homes selling which resulted in the median and average selling prices eclipsing anything in recent memory.  As I said in that market update, Los Altos Hills was experiencing a short term bump, not the beginning of a long term trend.  A handful of sales in the $4-10 million range both on and off market were just a short term anomoly.  Or were they?

There have been several new Los Altos Hills homes for sale that have come on the market, only to sell relatively quickly.  A good example was the nicely updated home on Ascension Drive that was priced at $2.68 million.  That's an example of the homes that were selling well in Q4 2010 and the fact that it sold fast just recently is affirmation that the market is still strong in Q2 2011.  A good indicator that the market is moving up is when new listings sell fast.  Even if they don't sell over their asking prices, fewer days on market is a strong sign of demand.

With increased demand, both at the entry-level end of the market and the high-end, we're likely to see some price inflation.  Taking out the high-end homes sold in March, the trend is to see an annualized increase of 4-5% for all homes sold in Los Altos Hills in 2011.  This is well above the 2% increase Los Altos saw in 2010 and a definitive change from the .9% decline Los Altos Hills saw last year.  While this is a prediction, it is supported by the strong performance in Q1 2011.  Prices did rise and appear to be following a trend established 2 quarters ago.

One thing to note is that the source of bargains, overpriced homes that sat on the market for ages, is drying up.  Many homes on the market during the downturn have sold.  New homes coming on the market are being seen by qualified buyers who are making good decisions and making reasonable offers.  For buyers looking in Los Altos Hills, I recommend making a purchase decisions based in immediate relative value.  The days of 20-40% discounts are long gone.

The Los Altos Hills luxury real estate market has kicked into high gear in March 2011 with 8 sales closed so far this month with the average selling price just under $3 million.  The biggest "on market" sale was a home on West Fremont Ave that sold for about $6.8 million.  That Los Altos Hills estate home had nearly 11,000 square feet on 1.8 acres.  There are a few off market properties that are even more impressive that are expected to close this month.

The activity for homes priced under $3 million is substantial with several buyers stepping up to compete for well-priced properties suitable for new construction.  Inventory that has been on the market is getting offers, particularly in this price range.  The homes getting the most attention are those in good condition, upgraded, on relatively flat lots with no noise issues (not close to 280) and with the potential to build.  Open houses are getting from as few as 4 visitors to over 30.

The high-end, luxury homes and estates of Los Altos Hills are finally coming back on the market and getting real interest and buyers.  Several homes priced from $4 million to $10 million are pending sale at this point, set to close in March 2011.  Two homes in particular, one priced at over $6 million and another priced close to $9 million are both set to close this month.  The indications from buyers is that the recovery is underway and now is the time to buy.  Some of these buyers are relocating from elsewhere in the country or upgrading from existing local homes.

There are several more homes for sales in Los Altos Hills available "off market" and those are getting some attention as well.  Those homes run from under $2 million to $25 million and are listed by a variety of agents.  There are a few buyers who are only interested in buying off market homes and the number of these buyers seems to have increased.  It will be interesting to see how many of these off market transactions takes place in coming months.

I held open 26264 Purissimma Road in Los Altos Hills this weekend on Sunday.  Officially is was open from 1:30-4:30 but I got there early and had it open at 12:30 and there were still cars pulling up at 4:45.  Fortunately I was holding it open with Ed Graziani (listing agent) who was able to stay overtime to show the home to other prospective buyers.  This was an incredible open house for one critical reason...IT WAS REALLY BUSY!

The home itself is spectacular but this is a nearly $9 million home that had a constant stream of both buyers and sellers all afternoon.  There is no clearer indication of the strength of the market than the number of people who show up at an open house.  There were buyers and sellers alike.  The buyers were in the same approximate price range and took their time to view the property.  They also wanted to know more about the Los Altos Hills market in general and current demand for high-end luxury homes.  These buyers already knew the market is turning around and they're now looking at how to buy a luxury home in Los Altos Hills before prices start to move up again.

The home at 26462 Purissimma Road is in a price range with very few competitive offerings either in terms of price or features regardless of buyers looking in Los Altos Hills or elsewhere for luxury homes.  Moreover, a major advantage to this home is that it is completely new, never occupied, and therefore not decorated to the taste of a previous owner.  It is a fresh canvas waiting for a savvy buyer to step up to make an offer.