^{(Main Street in downtown Los Altos)}

Home buyers and sellers are quickly returning to Los Altos after a hesitant 2009 period. Los Altos is primarily a single-family home market as we can see in the first quarter of 2010 results, with 63 single-family homes and six condos sold. The average days on market was just about 60 days.

The median price of single-family homes sold in Los Altos this quarter was $1.47 million, which is slightly higher than the previous year’s first quarter results of $1.435 million.

The effects of the mortgage crisis in 2008 and late 2007 is more apparent when we see that only 32 single-family homes were sold in the first-quarter of 2009.

Los Altos has consistently held its home values, and even in a weak national market, home prices are beginning to rise as buyer confidence returns. Home sales were also strong through the traditionally slow winter months, and we are already seeing multiple offers on well priced homes again.

At the same time, the market has cooled compared to the excitement just a few years ago. For example, when I last did a housing market update for Los Altos in September 2007, and the market was around its peak, the median sales price was $1.78 million – 17 percent greater than today. Homebuyers are probably a bit relieved that today’s scale is more balanced between the Los Altos home buyers and sellers.

Recent government tax credits, historically low mortgage rates and the slight dip in local home prices are  some of the reasons why homebuyers are trying to take advantage of this time and move into desirable neighborhoods like Los Altos. Besides the city being located in Silicon valley, there is an excellent school district and the homes are known for their larger lot sizes – ideal for families.

School performance, in particular, plays a large role in the stability and value of home prices in an area, and the Los Altos School District has some of the strongest scores on the Academic Performance Index (API) in California. In 2009, Covington Elementary scored 947 out of 1000, and Egan Junior High scored 954.

What sold for $1.47 million –

A 2,279 square foot, three-bedroom, two-and-a-half bath house sold for $1.47 million this past quarter. Built in 1962, the house sits on 10,450-square-foot lot.

The house is located on Kent Drive in the desirable Highlands area close to Cupertino schools. Inside there is a chef’s kitchen with a large granite island, and a formal dining room, family room and living room with a fireplace. Standard amenities and appliances were included.

Market Snapshot – April 28, 2010

There are currently 79 single-family homes and 9 townhomes and condos available.  Out of the 79 single-family homes, tw0 dozen are new listings that have recently hit the market, indicating increasing inventory in Los Altos.

One home is short sale. 8 of these homes are new construction with a few ’stubborn’ builders reluctant to negotiate early on and with the longest days on market for a listing being 393 days.

The Active continuous days-on-market (CDOM) for single-family homes in Los Altos is 58 days.  If you throw out the two properties that have been on the market for more than 300 days, the Active CDOM number drops to 50 days.  The average CDOM for properties that sold this year (once again throwing out listings that had a 200+ CDOM) is 35 days, which is a pretty good indicator for when owners should be seriously considering more latitude in their pricing.

How Much Home Can I Get for $1.35 Million?

Here’s a video of one of our current active listings on Lyell Street in North Los Altos.

Copyright (c) Alex Wang for the Silicon Valley Real Estate Blog, 1SiliconValley.com

Only one condo in Los Altos was sold this August and only a handful more in each of the previous years, so their trends and statistics may have a high variance.  In single-family homes, though, it wasn’t just the fact that the percent of list received jumped from just under full value to 104.31%.  The median listing value also increased 4% year-over-year, meaning homes weren’t just selling for more, they were starting higher too.  The median transaction increased year-over-year as well, from $1,650,000 to $1,782,000 (8%).

For July and August numbers in particular, schools play a large role in housing demand and Los Altos schools are some of the best in Silicon Valley.  I’ve worked with people who’ve made the argument that, assuming that schools are the critical factor in their home-buying decision, paying a premium on a home is preferable to sending their kids to lesser schools, or private schools.  To them, private schools may not be as good socially: the kids who they go to school with may not always live nearby or have as varied backgrounds.  Premiums aren’t necessarily the most financially-conservative route, but choices involving children don’t always need to be.

[ Median Home 2007, 2006 | Market Snapshot | How Much Home Can I Get? ]

Median Home 2007 – $1,782,500

Los Altos’ first Median Home was the 3,249 square foot family home at 1109 Covington Road in the area known more descriptively than artistically as "South of El Monte".  This home is about space with its 4 bedrooms, two family rooms and a 9,583 square foot lot.  The master suite is on the ground floor, separated from the guest and family bedrooms.  With 3.5 bathrooms, there’s no waiting.

This 32 year-old home is clean and efficiently laid-out and has hardwood floors in many of the rooms, plus a bonus room upstairs and a separate laundry room.  And while the house has a room to fit every need and sometimes more, the amenities within the house are fairly average.  Tile countertops and standard period cabinetry in the kitchen match the level of the slightly dated bathrooms.

For buyers looking for investment value in Silicon Valley’s real estate market (on top of the area) those are very good things.  The fact that the kitchens and bathrooms have many years of useful life left, but haven’t been upgraded yet (to granite, marble, stainless and all the other requisite trappings for the neighborhood) means that you can wear them out and still have a lot of upside potential for this home.

This is in contrast to the other Median Home in Los Altos, 839 Hierra Court, which, at 14 years-old, has all the upgrades and sold in only 8 days for an even $1,800,000.  Located near the Los Altos Golf and Country Club, this home features a brightly-lit interior with a design that might have come straight out of Architectural Digest.  Considerably smaller than Covington, this 3 bedroom, 2.5 bathroom house measures 2,117 square feet with an 8,200 square foot lot. 

But this is a home more about prestige and design than space, and given the quick turnaround, the new buyers were not only more than willing to make that trade-off.  They also added $152,000, or 9.2%, on top of asking.

Compared With Last Year – $1,650,000

You’d never know this home was 51 years-old.  In the same "South of El Monte" area of Los Altos, but physically closer to Hierra than Covington, this 1,909 square foot home at 1697 Middleton Ave. boasts not just a pool and spa on its 10,454 square foot lot.  Its completely-remodeled interior features consistent use of black granite in both the kitchens and bathrooms and a design that evokes classic New England, even with the LCD TV mounted above the centerpiece fireplace separating the living and dining rooms. 

Middleton’s part of Los Altos is actually served by the Cupertino Union School District, which is also renowned in and outside of Silicon Valley.  This home went in 13 days at $52,000 over the asking number of $1,598,000.

Market Snapshot – September 19, 2007 

54 single-family homes and 12 townhomes and condos are currently available as of today.  Out of the 54 single-family homes, one dozen have had a published reduction.  That number isn’t news in either direction. 

One home is a tear-down that has some potential.  Two of those homes are new construction.  When a small or inexperienced developer has locked in on a number in their minds — sometimes they understandably overvalue "newness" or build pride into the value — they’re often reluctant to negotiate early on, or scare prospects away with a valuation that isn’t market-driven. 

The Active CDOM for single-family homes in Los Altos is 64.  If you throw out the properties that have been on the market for 318 and 407 days, the Active CDOM number drops to 53.  The average CDOM for properties that sold is 38, which is a pretty good indicator for when owners should be seriously considering more latitude in their pricing.

How Much Home Can I Get in Los Altos?

This is an overview of representative properties in Los Altos which closed in August 2007.

	$741,000 – 101 2nd St. #3 (only condo closed) 2br/2ba; 1150 sqft w/ 871 sqft lot owned; 34 years old; HOA $495 Downtown Los Altos
	$1,134,000 – 441 Mundel Way (least expensive single-family) 2br/1ba; 854 sqft on 6970 sqft lot; 69 years old Situated among homes with much larger lots
	$1,445,000 – 50 Chester Cir. 4br/3ba; 1935 sqft on 3485 sqft lot; 12 years old Vaulted ceilings in living and dining areas
	$1,610,000 – 1741 Lantis Lane 3br/2.5ba; 1900 sqft on 13000 sqft lot; 54 years old Cupertino schools; remodeled interior w/ large kitchen
	$1,860,000 – 185 Sunkist Lane 3br/2.5ba; 2170 sqft on 10454 sqft lot; 48 years old Linoleum floors
	$2,100,000 – 1897 Granger Ave. 5br/4.5ba; 4500 sqft on 10080 sqft lot; 6 years old Large finished basement w/ wet bar, wine cellar
	$2,650,000 – 561 Orange Ave. 4br/4ba; 4000 sqft on 10019 sqft lot; 21 years old Pool; large wine cellar; understated kitchen fixtures
	$3,300,000 – 716 Linden Ave. (most expensive home closed) 5br/4ba; 3872 sqft on 17860 sqft lot; 5 years old Separate guest quarters / au-pair residence

Recommended Reading:

• Making an Offer on a Home: Behind the Scenes
• Not Overpaying When Buying a Home
• Why Some Houses Don’t Sell: A Buyer’s Perspective
• Choosing the Best Location for You

(c) Steve Leung, Realtor, for the Silicon Valley Real Estate Blog at 1SiliconValley.com