Los Altos Real Estate Blog

The price of real estate is going up in many Silicon Valley and SF Bay Area markets, but one of the strongest markets is still Los Altos.  A popular destination with large lots, a rural feel, and top performing schools, this town as a whole both one of the most expensive markest but also one of the hardest to get into.  Buyers shopping in the Spring of 2011 were faced with multiple-offer situations, homes selling well over asking price, and a limited selection of inventory in all but the most expensive price ranges.  There were sales of single-family homes under $1 million for a few bargain basement properties to homes sold at $4 million or more.

Here is a summary of market, by the numbers:

• Average Selling Price:  $1,769,436 (up 4.8%)
• New Listings:  386 (down 12.3% from 440 in 2010)
• Homes Sold:  309 (down 7.5% from 334 in 2010)
• Average Days on Market:  40 (down 12.3% from 53 in 2010)

Commentary:  As you can see, the average sales price for new, single-family homes was up 4.8% for the year.  That figure is now closer to the $2 million price point and is likely to continue that trend in 2012.  The Los Altos market was up 1.9% in 2010 and with the current shortage of inventory, we're likely to see prices continue to rise.

The biggest factor driving Los Altos home prices is inventory, specifically a lack of it.  There are not enough homes to meet buyer demand and that was exacerbated last year.  New listings were down over 12%, even with a slight reduction in homes sold, that's still a nearly 5% gap in demand.  When you look at how many homes had sales prices over the asking price, it's roughly the same number.

The most telling sign of demand is the number of days on the market.  This is down to 40 which is among the lowest of any town in the area.  Given that most homes go on the market by Thursday, have tour on Friday, open house on the weekend, and offers the following Tuesday, the average home is actually selling in 5 days with 35 days for financing.  What's interesting about that is more and more homes are selling for cash.  Thats' getting more closings down to 21 days or less, which is bring this number even lower.  Buyers in 2012 can expect this trend to continue.

I will NOT give you a price per square foot figure in this report because it is a much more detailed number than just the generic figure for all homes sold.  I break down the sales by size and age of home which gives an accurate view of that  calculation.  That analysis will appear in a separate article.  If you want the details before that is published, call me.

Even in this town where most properties sell before the ink is dried on the listing paperwork, a few homes sit on the market as foreclosures (REO) and short sales.  As of now, there are 5 properties in Los Altos that fit both categories and two of them are properties that have been on the market a VERY long time.  They are:

1. 1285 Richardson Ave -$1,850,000 (Still overpriced compared to nearby comps) SHORT SALE
2. 688 Lincoln Ave - $1,589,000 (Needs work and landscaping but is close to town) REO
3. 1420 Cedar Place - $1,200,000 (Great value for the neighborhood) SHORT SALE
4. 1911 Colleen Drive - $1,179,000 (Excellent value for the neighborhood) SHORT SALE
5. 54 Los Altos Square - $785,000 (Great price to get into Los Altos) REO

The only property in the town under $1 million is the home at Los Altos Square.  At that price and given the location, it's a good deal.  If you're trying to get into Los Altos for under $1 million, there are other opportunities but they're rare.  I can point out which neighborhoods will get more of these homes during 2012 and what you'll get in each area.

What constitutes a "deal" in Los Altos depends on your perspective.  You will NOT get a 4BR/2BA home with 1800 sf on a quarter acre lot for under $1 million.  Even if it's bank owned, all the larger homes on conforming lots sell at market rates.  However, the home on Colleen Drive represents a great deal when compared to other sales in the area.  At 1600 sf it's a nice size and the 8480 sf lot is reasonable.  It's priced right, perhaps even a little low.  It's a good deal because it gets you into a neighborhood where most of the homes are selling for $1.3-1.5 million - entry level.  As a buyer, my advice for getting into hot markets like Los Altos is to consider the price of the property relative to the rest of the neighborhood you're buying in.