We’ll cover total sales volume, sale price to listing price ratio, days on market, median selling price, and number of homes sold, using data on single-family homes off of MLS listings Inc.

First, let’s have a look at:
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Total sales volume clearly shows that over the past two-plus years the housing market dropped after peaking in 2008, then slowly bounded up and down, successively higher each quarter. The second quarter of this year really reflects a trend towards returned growth in the housing market of our local cities.

One additional interest to point out is that although most of the cities have not yet reached 2008 sales volumes, Mountain View has surpassed it.

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The sales price to list price ratio is one way to show buyer and seller perceptions: above 100% is a seller’s market, and buyers are paying above the listing price to win a house; below 100% is a buyer’s market, and sellers are having to reduce their listing price in order to sell a house. The closer a city is to 100% the more the market is balanced.

On a house that is listed for $1 million, a 1% change would amount to $10,000.

In both quarters this year, Mountain View and Sunnyvale have both been above 100%, a result of high demand for entry-level homes. Palo Alto and Los Altos, the more desirable and expensive of the cities, are still under 100% (Los Altos is at 98.21%, recovering from a glaring low of 93.56% in the beginning of 2009).

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The Average days on market is a good indicator of buyer demand and the overall health of the housing market. From the graph, we can see all four cities returning nearly to 2008 levels this quarter, with Palo Alto and Los Altos realizing the greatest second quarter drops. This is another signal that the market is shifting to a seller’s market, making it more difficult, once again, for buyers to get find a good deal.

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The median selling price can be used in conjunction to the earlier ratio graph. Palo Alto, Mountain View, and Sunnyvale, which are all near or above a 100% ratio, have median prices that are rising. Los Altos, however, is still far from a 100% ratio and its median sales price remains stagnate.

Currently all four cities are off second quarter results in 2008 by more than 5% — Los Altos is even more at nearly 13% under — so buyers can still expect to save money due to depreciated home values.

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The number of homes sold for each city has either nearly returned to 2008 levels, or surpassed it in the case of Mountain View, which is 50% higher this quarter than the same period in 2008. Part of the reasoning is traditionally more homes go on sale and are bought during the summer months. But this also a result of more sellers willing to sell their homes in a stronger market and a release of pent-up buyer demand.

Relate Posts:
Comparing Real Estate Trends of Local Cities — First Quarter of 2010
Silicon Valley Housing Market Update – July 2007
Silicon Valley Housing Market Update – April 2007

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_{(single-family home data from MLS listings Inc.)}

Because Palo Alto has a wide range of home prices, the entry-level market remained strong as buyers looked for bargains and the high-end market slowly recovered through the second quarter of 2010.

The median sales price in Palo Alto is 5.3% lower than the same period in 2008, at $1,468,000. A huge jump of 82.2% from last quarter and just 5.5% lower than in 2008 was realized in total sales volume, at $205,188,388. Average days on market is just over a month and there were 123 sales this past quarter, similar to 2008.

Palo Alto holds its title as a premier housing market with the highest total sales volume of our four comparison cities, and will continue to become increasingly difficult for buyers to enter the market as the sales price to list price ratio continues its rise to 100%.

_{(single-family home data from MLS listings Inc.)}

Mountain View serves as a good example in our four comparison cities to see that the strongest competition after the housing crisis is for entry- and mid-range homes.

The standout numbers this quarter for Mountain View are 102 closed sales, 121.7% more than last quarter and 50% more than 2008; and $98.5 million in total sales volume, 136.3% more than last quarter and 35.3% more than 2008.

Median sales prices and average days on market are creeping towards 2008 levels. The sales price to list price ratio is just above 100%, meaning seller and buyer perceptions are balanced, though slightly in favor of the seller.

_{(single-family home data from MLS listings Inc.)}

Los Altos burned through the summer months of the second quarter this year as it showed strong signs towards a sustained housing market recovery.

The median sales price slipped 1.4% from the quarter before, to $1.5 million. But the exciting news for home sellers is the precipitous drop in average days on market to 41, from 73 the quarter before, and 98 closed sales, which is equivalent to the same quarter in 2008. The sales price to list price ratio is 98.21%, meaning that more and more buyers are paying closer to list price, reflecting a shift to balanced buyer and seller perceptions. Total sales volume is $160,352,888, which is 17.3% lower compared to the same period in 2008.

Overall, Los Altos realized the greatest drop in mean sales price of our four comparison cities and has yet to recover the nearly 13% difference in price from the same time period in 2008 — meaning home values are still depreciated in the area.

_{(single-family home data from MLS listings Inc.)}

Sunnyvale is one of two cities in our comparison that has turned into a seller’s market the past two quarters. Perhaps it is the urgency of the buyers to find an entry-level house (Sunnyvale has the lowest median sales price of our four comparison cities) before the effects of the housing crisis completely recede that is driving demand.

The median sales price jumped 12.7% compared to last quarter, to $851,000. Average days on market remained the same as last quarter, while number of homes sold was just higher than the same period in 2008, at 177. Sales price to list price ratio is 100.95%, meaning most sellers are encountering multiple offers over listing price.

Although the median sales price and total sales volume are still lagging compared to 2008 numbers, Sunnyvale is reporting strong numbers in other areas this quarter, showing that the city has pushed out of its slump.

^{(Downtown Palo Alto on University Avenue)}

Palo Alto is one of the premier real estate markets in California, but that doesn’t mean it was able to pass through the mortgage and housing crisis, just two years ago, without a scratch.

Like most of the Bay Area, Palo Alto home prices and inventory dipped following the crisis but are now showing signs of recovering.

Comparing first quarter results between 2008 and 2010, the number of single-family homes on the market went from 81 to 68, and the median sales price from $1.681 million to $1.518 million. First quarter results in 2009 were even lower, with 66 homes sold and a median sales price of $1.275 million.

Again, because of a location in the Silicon Valley, neighboring Stanford University and a top performing school district (news link), Palo Alto homes are some of the last to be hit by a recession and a bellwether out.

When considering a home in Palo Alto, homebuyers have over 14 distinct neighborhoods to consider and home values that range from $800,000 to tens of millions.

Entry-level market

I am seeing a lot of homebuyers trying to take advantage of the dip in local home prices and trying to secure a low mortgage rate right now. As a result, buying an entry-level home in Palo Alto can be a very competitive market.

Most entry-level homes in Palo Alto can be found south of Oregon Expressway, in the Midtown and south Palo Alto neighborhoods.

The median sales price this quarter for the area was $1.27 million; and the average days on market, excluding Midtown and two outlier homes, was 24 days.

Good family homes exist under one million, and I recently sold a three-bedroom, one-bath in south Palo Alto for $950,000 this quarter. But buyers should be aware that strong competition for entry-level Palo Alto homes results in many going above list price after multiple offers are made – sometimes as close to 20 offers.

High-end market

The mortgage crisis has slowed the sales of high-end homes because sellers can afford to wait until home values return. Buyers are also more cautious with their money and may find it difficult to get approved for a jumbo loan under today’s stiff mortgage regulations.

The number of high-end home sales, like in Palo Alto’s Crescent Park neighborhood, are returning back to normal levels this year. In the first quarter of 2008, seven homes sold in Crescent Park at a median price of $4.25 million. In the first quarter of 2009, only two homes sold, the higher one selling for $1.7 million. And in 2010, five homes sold for a median price $2.75 million.

What sold for $1.25 million in 2009 and 2010

A 2,091 square foot, four-bedroom and two-bath, two-story house was originally listed for $1.495 million but sold for $1.25 million in the first quarter of 2009.

The house was built in 1963, sits on a 7,688-square-foot lot and is located at Barclay Court, a cul-de-sac in the Charleston Meadows neighborhood. Inside are oak floors, a combination living and dining room with a fireplace. The house is located next to Robles park and part of the Palo Alto school district.

During this past quarter, a 1,324 square foot, three-bedroom and two-bath house was listed for $1.198 million and sold for $1.27 million.

The house was built in 1954, sits on a 9,009-square-foot lot and is located at Fairfield Court, a cul-de-sac in the Green Meadow neighborhood. Inside is hardwood floors, stainless appliances, new fixtures and a combination living and dining room with a fireplace. The large rear yard features a patio.

Market Snapshot – May 3, 2010

There are currently 69 single-family homes and 44 townhomes and condos available. Out of the69 single-family homes, the prices have a wide range from $760,000 to $8,000,000.

^{(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

This chart shows the change in jumbo mortgage interest rates during 2007.  Put in historical context, the jumbo interest rates over the summer didn’t approach the level of rates in, say, 1981, but since 2002, the housing market has benefited from mortgage rates that are historically low.

It wasn’t 2005 or 2006, though.  In May and July, some buyers discovered the home they were interested in just became about 5% more expensive at the same price because of another interest rate bump.  (A $1,000,000 P&I mortgage costs $5,996 per month at 6% and $6,321 at 6.5%.)  All the more reason to better understand how rate locks work.

Some homeowners with adjustable rates found themselves in a similar situation and ended up attempting a short sale.  Many neighborhoods were unaffected, others were peppered with short sales — where the available homes may or may not have real estate signs indicating a sale.

But many of the markets around Silicon Valley didn’t behave like one would expect from reading the news reports.  It’s the sales transaction information that tells the best story.

Data Points Across the 44 Cities in the Database for Santa Clara County and San Mateo County

1.  Of the 35 cities with a decrease in new listings year-over-year, all of the ones in Silicon Valley — there were 26, East Palo Alto and Milpitas were the exceptions — saw their median values increase.  (The cities outside Silicon Valley seeing decreases included outlying cities Gilroy, Morgan Hill and Loma Mar.)

2.  The were 9 cities that had an increase in new listings year-over-year.  Not surprisingly, this acceleration of inventory usually means a decrease in the median.  It is notable, though, that Santa Clara and Redwood City showed strength and bucked the trend.

3.  There wasn’t any real correlation between medians and homes "sitting" on the market.  San Mateo saw an 18% increase in CDOM (to 39 days) but had an increase of 8% in the median.  San Jose’s CDOM skyrocketed 29% (to 58 days) but the city as a whole had a median increase of 3.6%.  Mountain View and Palo Alto were on fire the entire year and saw their CDOM numbers decrease 29% and 9% respectively.

Silicon Valley’s Gains and Losses

Looking at the table, what stood out to me the most was where Menlo Park turned out.  I’ve written previously about how Menlo Park can be a mixed bag and how low-income housing has affected the median — and while Menlo Park isn’t the only city in Silicon Valley to have overnight parking restrictions, I’ve talked with a number of people who cite it as a reason why they wouldn’t buy a home there.

For the city that’s part Atherton, part Redwood City, part Palo Alto and part East Palo Alto, Menlo Park was the only one of these five cities to have both an increase in single-family home listings year-over-year and a drop in their median.  (Redwood City withstood its 9% increase in listings and still came away with a 4.12% gain.)

There was core strength in the 101 to 85 corridor of Palo Alto, Mountain View, Sunnyvale and Cupertino.  High-paying jobs and the perception of a bottomless market ironically helped fuel growth for 2007. 

The 30.6% drop in Palo Alto’s new listings cut supply rather dramatically.  And while Mountain View’s drop of 15.5% seems less dramatic in comparison, the average home sold took 22 days to sell.  The only number on my spreadsheet to come close to that speed is neighboring Sunnyvale, where the average is 28 days.  Sunnyvale, Palo Alto, and Mountain View all recorded sales prices at above 103% of list.

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

The median number has dropped 7.8% year-over-year in October from $1,192,000 to $1,100,000; the average stayed almost the same going from $1,145,500 to $1,145,000, with eight new listings in both periods and an inventory of 14 and 13 in those respective years.  The news, though, is in townhomes and condominiums.

In Redwood Shores, there were only three were closed in October 2007 (compared to 15 the year before) with inventory levels similar to 2005 and 2006.  The percent of list received went from just above asking to 93.36% this year. 

It’s sometimes difficult to be the first wave to adjust to a different landscape and changing market conditions, no matter how much data is available.  In this case, the initial valuation of these three townhomes was unrealistic, so the percent of list received is lower than it might have been if information about the shifting landscape were already digested.

There are good elementary schools in Redwood Shores.  Sandpiper Elementary, part of the Belmont-Redwood Shores Elementary School District, improved upon its elite test scores last year with a 17 point increase to 923.  When I last called Sandpiper just after the start of the school year, they were on the border of being over-subscribed, but were still able to take new students.

Obviously, it’s important to confirm availability before making a purchasing decision.  The Belmont-Redwood Shores district has two other schools over 900 API to choose from if there’s a wait list at Sandpiper (Central Elementary and Fox Elementary), and the others two come in at 875 (Cipriani Elementary) and 823 (Nesbit Elementary).

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

Median Home 2007 – $1,100,000

The Median Home for October 2007 in Redwood Shores is 615 Island Pl., which was actually a bank-owned property.  Its hallmark is a palacial master bathroom, which is the size of a bedroom in many older homes.  The main living area is also spacious as well, with high ceilings that extend over the second level.  The home comes in at 2310 square feet (on a 6053 square foot lot) with 3 bedrooms and 2.5 bathrooms.  This single-family home is part of a gated-community with an HOA fee of $230.

Compared With Last Year – $1,192,500

The first Median Home last year was 702 Nature Ln.  Located on a corner lot, this 2421 square foot home splits the main living level with the master bedroom and two other bedrooms upstairs but one bedroom and one of the three full bathrooms downstairs.  This home was listed as having a "motivated seller", and (originally listed at $1,288,000) it was reduced to $1,265,800 before eventually selling for $1,210,000.  The association fee for this home was $135.

1029 Rockport Ave., last year’s other Median Home, also has 4 bedrooms — two of which are master suites — along with one-and-a-half more bathrooms in the home.  It’s slightly smaller than Nature, at about 2200 square feet, but also sold for less: $1,175,000.   Rockport sold for 1.9% below list, but like Nature, it sits on the water.  Some may prefer Rockport’s covered arbor, which allows more outside light than a patio that is covered by a second-floor accessible deck.

Market Snapshot – November 9, 2007 

As of today, there are 29 townhomes and condos and 12 single-family homes on the market in Redwood Shores.  Nine of the townhomes and condos, but none of the single-family homes, have had a published reduction.  If you take out the two new homes listed today, the Active CDOM number is 44 days (37 with them included).  The Active CDOM number for townhomes is 55 days.

One of these townhomes is an interesting illustration of over-improvement.  The home was upgraded from soup-to-nuts: kitchens to bathrooms to floors and paint.  And all with top-of-the-line materials.  It was pretty clear that no expense was spared and it was decorated to the taste of the current owner.  The challenge is that now the property is priced well over the comparables in the area because the seller expects the value of neighboring properties plus the upgrades and a premium for including them.

There is nothing inherently wrong with upgrading to increase the value of a home, but that strategy works particular complexes or neighborhoods can support the number the seller is asking for.  (I used the analogy of "lobster on the McDonald’s value menu" in my book.  Would you pay $13 for anything at McDonald’s?) 

This complex is a very nice neighborhood but it’s difficult to justify a price $200,000 (21%) more expensive than a comparable sale one month ago when many of the upgrades are "six-of-one and half-a-dozen of the other" (i.e. pricey, but low value-add) choices. 

The fact is that the list is higher than any number any property has sold for in that complex.  The market is sending a clear message.  This home has been on the market for almost three months (without a reduction) and it risks joining the five other townhomes that have been on the market for 100 days or longer.

How Much Home Can I Get in Redwood Shores?

This is an overview of representative properties in Redwood Shores which closed in October 2007.

	$585,800 – 457 Cork Harbour Cir. #F 2br/2ba; 1136 sqft; HOA $405 2 master suites
	$604,500 – 405 Cork Harbour #D 2br/2ba; 1136 sqft; HOA $405 Granite counters; new laminate floors
	$620,000 – 1112 Camerota Way 2br/2ba; 1125 sqft; 11 years old; HOA $200 Corner unit
	$925,000 – 582 Osprey Dr. 3br/2.5ba; 1550 sqft on 3234 sqft lot Corner lot; separate family room
	$1,100,000 – 615 Island Pl. (Median Home) 3br/2.5ba; 2310 sqft on 6053 sqft lot; HOA $230 Gated community
	$1,150,000 – 22 Lido Ci. 4br/2.5ba; 2490 sqft on 4000 sqft lot; 29 years old; HOA $72 Newly remodeled kitchen
	$1,450,000 – 810 Sun Blossom Ln. 4br/3ba; 2710 sqft on 3998 sqft lot; HOA $108 Newly remodeled kitchen; custom paint

Recommended Reading:

• The Impact of Homeowners Associations on Purchasing Decisions
• Considering One HOA Versus Another
• Reasons People Stop Renting and How to Get Started
• Not Overpaying When Buying a Home
• Download the Silicon Valley Home Buyers Book

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

Second, the ones at the low end of the range are closer to Redwood City and East Palo Alto, and use Redwood City and Ravenswood Elementary School Districts, respectively.  The more expensive ones are closer to Atherton and Palo Alto and are part of the Menlo Park Elementary School District — and its 907 district API score — or the Las Lomitas Elementary School District — and its two schools with a 948 district API score.

So, with that in mind, the median value of homes in Menlo Park can be somewhat of a tug-of-war.  For September 2007, there were two transactions for low-income housing which closed at about $330,000 each.  If you threw those two out, the median single-family home in Menlo Park was $1,220,000.  That’s a realistic 6% decrease year-over-year.

It’s important to look beyond what the numbers are and understand the story behind them.  In this case, there’s been some softness in Menlo Park given increasing CDOM numbers, from 19 to 38 year-over-year.  (The average CDOM over 10 years is 34.)  But, from on the ground experience, there wasn’t anything to indicate a decrease as dramatic as the median value chart would indicate.

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

Median Home 2007 – $1,220,000 ($1,000,000)

As the median value chart shows, $1,000,000 was the actual median in Menlo Park.  That Median Home was 208 Oakhurst Place, a 57-year old, 3 bedroom, 2 bathroom home in Menlo’s Flood Park region that measures 1,800 square feet on a 6,421 square foot lot. 

The more representative properties are the two $1.22M homes.  The first is 596 Hopkins St., which is a revised Craftsman-style home that takes considerable advantage of natural light.  This 3 bedroom, 2.5 bathroom home measures in at 1,493 square feet (on a 4,195 square foot lot) according to the subdivision reports, and its location just feet away from Burgess Park puts it near a number of outdoor activities — from swimming to softball and skating — as well as Kepler’s and downtown.

From many, that proximity makes the smaller yard an acceptable trade-off.  The interior is modern and its kitchen relatively spacious considering the limited square footage. 

This property was originally listed at $1,350,000 on July 30 and underwent a reduction to $1,275,000 before selling after 40 days-on-market.  Hopkins is in a strong location in Menlo Park and the sellers understandably wanted to maximize their revenue given a comparable close by that sold off-market for $1,450,000. 

But assuming the homes were the same (the off-market one is actually larger by a couple hundred squares), the market in the spring and the one in August are two very different stories — especially this year with a nationwide mortgage crisis.

The other "almost" Median Home, 2108 Manzanita Ave., fared better.  Originally listed August 20 for $1,265,000, it sold in 9 days for $1,220,000.  That’s a 3.6% reduction.  At 1,150 square feet, this home at Manzanita is smaller than the other "almost" Median Home at Hopkins but its 6,500 square foot lot is considerably larger.  This 52-year old home was recently refreshed with new double-pane windows, a gas fireplace, and a new furnace.

Students split their early years between the exceptional Las Lomitas Elementary School then La Entrada Middle for elementary school, after which they go to  Hillview Middle and Menlo-Atherton High.

Compared With Last Year – $1,297,500

Last year’s first Median Home at 1077 Tehama Ave. is comparatively large at 2,310 square feet and has a 5,928 square foot lot.  It’s in the Menlo Park Elementary School District and is close to Flood Park which has everything from baseball, softball, volleyball, tennis, horseshoes and petanque — which I had to look up — to a vast picnic area.  The trade-off is that this home is also relatively close to 101.

Listed at 99-years old, Tehama is completely redone with a new roof, custom driveway, and modern interior.  The modernized kitchen has all of the stainless steel touches that buyers looking for a plug-and-play home would expect and the unheralded essentials like furnace and water heater are new as well.  This home 4 bedroom, 2.5 bathroom home sold in 12 days at $1,325,000, slightly over the asking of $1,299,000.

The second Median Home was 874 Cambridge Ave. in the downtown region of Menlo Park between Santa Cruz Ave. and the Stanford Shopping Center, and walking distance to both. 

This 47-year old home is also completely remodeled on the inside but the exterior still has the feel of ranches of that period, complete with an aerial antenna.  Among the additions were French doors, skylights, a new granite kitchen and hardwood floors.  3 bedrooms with 3 bathrooms, this home sits 1,750 square feet on a 4,800 square foot lot and sold in 36 days for $1,270,000, just under the asking of $1,295,000.

Market Snapshot – October 16, 2007 

There are 82 single-family homes and 17 townhomes and condos available today.  22, or 27%, of these homes have undergone a published reduction, which isn’t too high, but something to watch moving forward.  The reduced homes have an Active CDOM average of 116 days: one of the homes has been on the market for a whopping 407 days, which outpaces the second highest CDOM number at 209. 

It’s interesting that at a couple points over the past decade, the medians for homes and townhomes  in Menlo Park have either come close or overlapped.  There are a number of townhomes with large footprints, particularly around Sharon Heights and the Stanford Hills (towards Silicon Valley’s famous Sand Hill Road) which are well over $1 million.

The Active CDOM for all Menlo Park single-family homes is 70.  One home (not on the reduction list) has a CDOM of 465 days and 17 over 100 days.  A number of sellers subscribe to a wait strategy where they believe they can get the number they want if they leave their property on the market long enough. 

If the sellers don’t have a pressing need to move, this may be the route they decide to take.  Otherwise, maintenance and ownership costs (including taxes) make this strategy more costly each month and there’s a balance between getting a target number and maximizing gains (or minimizing losses) in a transaction.  Sometimes getting the number is an expensive proposition.

How Much Home Can I Get in Menlo Park?

This is an overview of representative properties in Menlo Park which closed in September 2007.

	$519,900 – 466 7th Ave. 2br/1ba; 790 sqft w/ 3000 sqft lot Updated kitchen
	$690,000 – 451 Oak Grove Ave. #4 2br/2ba; 1296 sqft; HOA $394 Close to downtown Menlo Park, Caltrain
	$700,125 – 192 Oak Ct. 1br/1ba; 920 sqft on 5900 sqft lot; 66 years old Cul-de-sac
	$830,000 – 3606 Fair Oaks Ave. 3br/1ba; 1270 sqft on 7125 sqft lot; 70 years old Updated kitchen; new plumbing and electrical
	$945,000 – 198 Elliott Dr. 3br/2ba; 1330 sqft on 7600 sqft lot; 52 years old Near Palo Alto
	$949,000 – 600 Willow Rd. #22 3br/2.5ba; 1637 sqft; 11 years old; HOA $295 Vaulted ceilings; new kitchen
	$1,220,000 – 2108 Manzanita Ave. (Median Home) 3br/2.5ba; 1150 sqft on 6500 sqft lot; 52 years old
	$1,220,000 – 596 Hopkins St. (Median Home) 3br/2.5ba; 1493 sqft on 4195 sqft lot
	$1,500,000 – 1665 Valparaiso Ave. 3br/2ba; 2230 sqft on 10000 sqft lot; 54 years old Large bedrooms
	$1,617,000 – 451 Claremont Way 3br/2ba; 1500 sqft on 0.25 acre lot; 51 years old Pool; short walk to downtown Palo Alto, Burgess Park; large lot
	$2,310,000 – 355 Santa Rita Ave. 4br/3ba; 2400 sqft on 14181 sqft lot; 67 years old Large lot
	$2,595,000 – 174 Seminary Dr. 4br/3ba; 2960 sqft on 11131 sqft lot Large floor plan; custom kitchen; 3-car garage

Recommended Reading:

• Why the Perfect House Wasn’t So Perfect
• Making an Offer on a Home: Behind the Scenes
• Not Overpaying When Buying a Home
• How Buyers Can Walk in the Shoes of Sellers and Their Listing Agents
• Choosing the Best Location for You

(c) Steve Leung, Realtor, for the Silicon Valley Real Estate Blog at 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

Sunnyvale’s average number of new listings during the month over the last ten years is 105 and it’s an illustration of why real estate is local.  National news headlines from around the country correctly talk about aggregate numbers that are lower because of deflating markets — and many Silicon Valley home owners here who might have considered listing their homes, but could afford to wait, sat out.

But ultimately, real estate is about location, supply, and demand.  And while supplies were down, demand was actually both "normal" and "up".  The ratio of closed transactions to new listings in August 2007 was 73%.  The 10-year average is 74% and it was 58% last year.  How did that increase manifest itself?  Besides a fourth consecutive year of over-asking closing prices in single-family homes, have a look at the difference in the cost of Median Homes year-over-year.

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

Median Home 2007 – $930,000

The umbrella wasn’t included in the number, which was $41,000 over the asking.  The Median Home in Sunnyvale is the 3 bedroom, 2 bathroom ranch at 956 Kintyre Way, a 51 year-old home. 

And while it shows in the plain styling of its exterior, the inside was completely remodeled to today’s expectations, with a new appliances in a completely renovated kitchen, hardwood floors, a pair of redone bathrooms, new paint inside and outside, and energy-saving double pane windows.  The lot is 6,572 square feet and comes with underground sprinklers and new landscaping.  All the work and upgrades paid off because the home took 6 days to go.

Compared With Last Year – $865,500

Kintyre’s styling is in complete contrast to one of last year’s Median Homes, the ultra-modern, 20 year-old, 1465 Yukon Drive, which sold for $870,000, 16 days after being re-listed (45-day CDOM).  The listing describes the home as "charming", which I always interpreted as a real estate code-word for "small", but this home is 2,068 square feet on the inside. 

"Charming" might more accurately describe the lot for a home this size, which is 3,920 square feet.  Ratios aside, the claim to fame for this 3 bedroom, 2.5 bathroom — I think you could call it a chalet bungalow — is the Cupertino schools, Nimitz Elementary and Cupertino Middle, plus Fremont Union’s highly-rated Homestead High School.

999 Glenbar Ave. is the other Median Home in Sunnyvale for August 2006.  As a 47 year-old home, Glenbar has a more traditional exterior but a completely modernized interior, with recessed ceiling lights, granite and stainless steel in the updated kitchen, new bathrooms, refinished hardwood floors, and maple vanities. 

Its 1,524 square feet contain 3 bedrooms and 2 bathrooms, but it has a more traditional lot size at 6,098 square feet.  Unlike its fellow Median Home, Glenbar sold for above its $844,888 asking, for a rounder $861,000.  It went in 13 days.

Market Snapshot – September 7, 2007 

There are 114 single-family homes and 72 townhomes and condos listed, for a total of 186 available residential listings.  It’s been generally good news for Sunnyvale, so let’s focus on the homes where things aren’t so good. 

Of the common interest developments, 19 have undergone a reduction and 6 have had their asking price increased.  Here’s a map plotting where the homes that have been reduced are.  As you can see, there’s no single area, but they do share some characteristics.

First, they’re smaller condos, many in the sub-1000 square foot range.  They have an average list price of $484,540 for an average of 1036 square feet.  The smaller condos are sitting because the ability of buyers in this range was largely hurt by the sub-prime implosion, the trend towards requiring higher down payments, and now by jumbo rate increases.

Second — with the exception of the cluster around #10 which is that complex of lower-end condominiums that I mention in the Threats section of my notes on the Expressions of Sunnyvale and Belmont Terrace — the small condos are either on or one block over from a major road east of Mathilda (and further from Mountain View).  Buying near a major road isn’t ideal but it’s really a combination of these two factors that has hurt this set of properties.

Of the 114 available single-family homes, 47 have undergone a reduction, with those 47 having an Active CDOM number of 84.7 days on average.  I was surprised until I pulled up a map.  You can’t tell every person’s situation from there.  Some people might have been too aggressive with their original mark.  Others might be in a bad financial situation.  But there are clusters in Sunnyvale towards and north of the 101.

Same issues here as with condos.  Homes at the lower-end have a shrinking set of buyers; home owners in more affordable portions of the city have a higher probability of being in financial distress. 

Net-net, the amount of "really good" inventory has been relatively low and those sellers have reaped the benefits.  But higher jumbo interest rates are pushing the effective cost of homes higher, so home owners should keep that in mind when listing a home towards or below the median — the minimum bar buyers have to jump over is getting higher. 

Conversely, buyers need to keep in mind there might be less inventory than it seems, particularly above the median.  Buyers will get some relief because of the publicity of the loan implosion and the time of year, but only certain sellers will need to entertain lowball offers.

How Much Home Can I Get in Sunnyvale?

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

	$400,000 – 1081 Reed Ave. #A 2br/1ba; 858 sqft; 35 years old; HOA $280 Custom bookcases
	$490,000 – 1271 Poplar Ave. #403 2br/2ba; 1040 sqft; 23 years old; HOA fee unknown 2 master suites
	$531,000 – 880 E. Fremont Ave. #611 2br/2ba; 930 sqft; 2 years old; HOA fee unknown Cupertino schools
	$575,000 – 163 Beemer Ave. (least expensive single-family this month) 1br/1ba; 688 sqft on lot under 4500 sqft; 99 years old Detached garage converted to office; 2nd bed separate from main house
	$589,000 – 983 Belmont Terrace #3 2br/2.5ba; 1483 sqft w/ 720 sqft lot owned; 21 years old; HOA $395 Skylights, new paint See Realtor Notes on Belmont Terrace
	$629,000 – 740 Borregas Ave. 4br/3ba; 1675 sqft on 7200 sqft lot; 50 years old Family room has bathroom and separate entrance; one block from 101
	$695,000 – 998 La Mesa Terrace, Unit E 2br/2.5ba; 2120 sqft; 22 years old; HOA $310 Large bonus room; updated appliances; 2 car garage
	$700,000 – 618 E. McKinley Ave. 3br/1ba; 1391 sqft on 5000 sqft lot; 55 years old Fireplace, kitchen updated to tile, skylights
	$726,000 – 1152 La Rochelle Terrace, Unit B 3br/2.5ba; 1923 sqft w/ 2450 sqft lot owned; 12 years old; HOA $337 Large bonus room, hardwood floors, 2 patios
	$785,000 – 1039 Grape Ave. 3br/1ba; 1066 sqft on 6000 sqft lot; 53 years old Cherry Chase Elementary, converted garage not included in sqft
	$785,000 – 977 Asilomar Terrace #6 3br/2ba; 1895 sqft w/ 2613 sqft lot owned; 15 years old; HOA $384 End unit, large loft; gated community See Realtor Notes on Expressions of Sunnyvale
	$847,000 – 512 S. Sunnyvale Ave. 4br/2ba; 1582 sqft on 6050 sqft lot; 69 years old Remodeled, new carpet, fresh paint; close to downtown
	$859,000 – 400 Ives Terrace (most expensive townhome sold this month) 2br/2.5ba; 1960 sqft w/ 2700 sqft lot owned; 26 years old; HOA $335 End unit; gated community; large deck
	$945,100 – 1336 Flicker Way 3br/2ba; 1407 sqft on 6138 sqft lot; 43 years old Cupertino schools; hardwood floors, granite counters, pool
	$1,050,000 – 1694 Kamsack Dr. 3br/3ba; 1544 sqft on 7405 sqft lot; 46 years old Cupertino schools; refinished hardwood, new paint and landscaping
	$1,190,000 – 838 Trenton Dr. 4br/2ba; 1752 sqft on 8276 sqft lot; 47 years old Cherry Chase, Homestead High; laminate flooring; Eichler
	$1,275,000 – 761 Inverness Way 4br/3ba; 2573 sqft on 6098 sqft lot; 15 years old Cupertino schools; curved staircase, 3 fireplaces
	$1,405,000 – 598 Fort Laramie Dr. 6br/3.5ba; 2855 sqft on 8550 sqft lot; 40 years old Cupertino schools; large pool, wetbar

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