Available supply in the Los Altos market hasn't been as low since 2000, when the median number for single-family homes jumped an astronomical 48.9% year-over-year. That year, the number of closed transactions to new listings was almost 2-to-1 (48 closed to 25 new). The headline number this year is that closed sales are the lowest in a decade, but so was the available inventory. Relative demand for what's available has been strong enough to draw notable increases in two key statistics. 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 - $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.