Los Altos & Palo Alto Real Estate Insight

Welcome

Whether you are a first time buyer or seller, or have been through multiple transactions, you might be surprised by how quickly the real estate market changes in Los Altos, Palo Alto and surrounding communities. You need hard-hitting historical data, current market analysis, and insider experience to stay informed and succeed in these real estate markets.

As a service to their clients, Jeff Stricker and Steve TenBroeck of Alain Pinel Realtors provide regular market analysis and commentary. You are invited to read the entries below, add your comments, ask questions or contact them directly.

Why Real Estate Prices in Palo Alto & Los Altos Defy Logic

We’re asked routinely by buyers if prices in the greater Palo Alto/Los Altos market area are sustainable. The short answer is yes! However, it is very difficult for area newcomers or first-time home buyers to believe it. Here’s some help:

An article in today’s Chronicle by Dan Levy of Bloomberg News titled, “Sales in SF Jump 50% in First Quarter” summarizes the reasons why prices rise in our area more than in other areas quite well.

Another good source of data is First Republic Bank’s “Prestige Home Index”

The data is revised quarterly and shows the movement – up and down – of upper-end home values in the SF, LA, and San Diego market areas going back to 1985. One can easily see below that the SF area, as compared to the other two, has been much less volatile. This is due primarily to the limited space in which to build homes in the SF area (as Levy discusses in his article above).

Home prices are rising – demand is up – and multiple offers are back as Silicon Valley leads the way out of the recession – again.

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April Market Activity – ’01 to ’10

April Trending: As in March, the number of homes selling with multiple offers (over asking price) continued to increase. In addition, all-cash offers have increased in frequency. However, buyers are still picky and tend to pursue homes with the fewest defects and least amount of work needed to be done (unless they believe they are receiving a significant discount for those perceived deficiencies).

Bottom line: The real estate market is continuing to heat up as Silicon Valley begins to recover from the recession.

The charts below show the number of closed sales in the month of April of each year (‘01 through ’10) including the number of homes for sale on the last day of the month. At the bottom of each chart, you will see the number of months it would take for the homes to sell at that month’s rate of sales, plus the average percentage of list price received by sellers in April of each year.

*  Months of inventory on the market
** Average percent of price received

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Q1 Market Snapshot | Real Estate Continues to Recover

In Palo Alto, Los Altos and surrounding communities, the residential real estate market continued to recover in the 1st quarter of ’10. Supply and demand continued to move back in favor of sellers with multiple offers common and prices rising.

SINGLE FAMILY HOMES

South and Mid-Peninsula Market Snapshot

? Q1-2010 vs. Q1-2009 ?

A Significant Shift in Supply & Demand

Several factors – including improving consumer confidence and lots of rain – caused the number of homes for sale in our market area to decline by 20% on average from a year ago. Sales volume, on the other hand, increased by 55%.

Read the rest of this entry »

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I’m hosting an open house of a…

I’m hosting an open house of a 4 Bedroom Midtown Single Family Residence on Apr 25th – http://www.jeffandsteve.com/109

Topics: Commentary      Comments Off

THE Leading Indicator for the Real Estate Market

Consumer confidence is the best leading indicator of the local and national real estate markets.

When the index rises the number of sales rise and inventory of homes for sale falls.  When the index falls, the reverse happens.

The Conference Board just released their latest report indicating a slight rise in the index from 50 to 51.1 http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3836.  Historically, the Board considers a reading of 80 to represent a good, stable economy, while a reading of 100 or more indicates a growing economy.

Obviously we are a long way from an indication of a good economy, which is why we believe the stock and real estate markets are likely to surprise to the downside later this year.

Home sellers who are planning a 2010 sale should go to market as soon as possible.  Home buyers who are not at risk to rising interest rates may want to exercise patience.

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