Los Altos Real Estate Blog

Los Altos real estate is continuing its march to higher prices in the month of April.  With the average and median sales prices both rising to $1,824,000 and $1,628,750 repsectively, the market is definitely showing signs of strength.  While the total units sold is much lower than last year or even last month with only 18 homes sold versus 28 last month and 31 in April 2010, the inventory level is also much lower.  There were only 75 homes on the market in April versus 102 last year.  One of the factors of the lower inventory was the timing of weather and holidays.  As April ended, Los Altos was seeing fewer homes come on the market and that has continued into May.

As I had mentioned last month, the days on market measure has been high as old inventory was sold.  Most of those were closed in March so it's no suprise that in April, the average days on market was only 34 compared to 73 last month and 53 last year.  More and more homes are coming on the market and selling in their first 2-3 weeks, if not sooner.  A couple of homes on Panchita sold with multiple offers in their first week.  While those technically sold in April, they won't close until May so they're not part of the statistics.  It's important to you, my reader, that you understand that the Los Altos market is definitely HOT!  The hottest market segment is homes under $1.5 million.  However, well priced homes up to $2.5 million are also selling quickly.

The percent of listing price received figure was 98.18%, up from 97.67% last month.  This is reflecting the trend to full price offers and overbids.  Again, the market segment under $1.5 million is seeing many more overbids and full price offers.  That is what is driving the overall increase.  Buyers in the $1.5-2.0 million range are negotiating a little harder but still paying close to listing price.  Current inventory is low enough that we should see this trend continue into May.

A word on price reductions. A few homes are being repriced and then selling quickly.  The typical price reduction is 10%.  In general, these homes were priced too far over the comps to begin with.  So, don't mistake price reductions as a new trend.  Just look at the comps and see where prices were and that's where the newest listings will sell.  While the overall trend in Los Altos is up, the current sales still points to prices ending the year at 3-5% higher than 2010 (which rose 2% over 2009).

There has been renewed discussion about off market home sales in Los Altos Hills ever since the record setting $100 million transaction completed a couple of months ago. In looking at that transaction, many buyers will be curious to know how many other homes have sold off market in Los Altos Hills in 2011 and 2010.  Remember, off market sales are those homes that sell without being on the MLS.

In 2010, there were a total of 12 off market sales transactions.  There were several other transfers to trusts and other property exchange events but they weren't true sales transactions.  Of those, the vast majority were reasonably priced with only 3 transations exceeding $3 million.  One transaction exceeded $20 million and the others were more reasonable.

The composition of the transactions was mixed as well with a few "land only" properties sold.  Those transactions firmly support the on market valuations for land in Los Altos Hills.  In general, the market value of a prime acre of land in Los Altos Hills is about $2.2 million per acre.  That assumes views or other advantages.  The off market transactions fall in line with that.

The majority (75%) of transactions happened in the later half of the year, from June onward.  This is a sign that the "off market" followed the trend of the "on market" in Los Altos Hills improving in the latter half of the year.  We have seen 4 transactions so far this year with one off market transaction pending which is a further sign that properties sold off the MLS is accellerating in 2011.

There were many buyers who wanted to make off market purchases in 2010 but were unable to find suitable properties.  There has been considerable discussion in the local market about these buyers finding good properties in 2011.  If the regular market is any indication, Los Altos Hills will see substantial off market sale activity this year.

The Los Altos Hills real estate market has been at the top of the news lately with the off-market sale of a mansion.  However, the rest of the market has been great and sales have improved dramatically.  In March 2011, there were 12 homes sold versus 2 sold in March 2010.  There were only three homes sold last month.  So, sales volume had improved a lot.  Inventory is actually low with only 51 homes on the market compared to 44 last month and 71 in March 2010.  The lack of inventory is driving buyers to make purchases rather than wait for new inventory.

The average selling price was $3,147,000 which makes Los Altos Hills the most expensive zip code in the country for this month.  However, it won't sustain that because the increase was due to a handful of sales priced between $4 million and $10 million that pulled the whole market up.  The median sales price is $2,383,000 which is more in line with reality.  The average and median will sync up in April while sales continue to move ahead.

The number of days on market for Los Altos Hills homes is up slightly at 139 days compared to 106 last month.  That's accounted for by a couple of well aged sales.  However, the trend is still to sell homes close to the 100 day mark, even for recent listings.  The market is heating up a lot for homes under $3 million but those priced higher are still taking a while to sell.  Buyer activity has increased substantially but they're taking their time to evaluate the market before making decisions.  Even with inventory low, the Los Altos Hills buyers can still consider homes in Woodside, Portola Valley and Saratoga as options.  One key point on inventory, many homes that were on the market 1-3 years ago are coming back at prices consistent with the current market.  The home on Adobe Creek Road is a good example of that.  That home is beautiful and has few equals in it's price range.

Going into April, we should see sales continue with a solid number of homes sold and a few high-end homes to keep the average selling price moving up.  The days of making offers 10-20% below the asking price for homes that just come on the market seem to be gone for the most part.  There is still room to negotiate as the price point rises.