Top Silicon Valley Shopping Malls

Based on the latest information for 2024, there are a few more malls in Silicon Valley but the four that I reviewed in 2006 are still thriving:

Stanford Shopping Center - Palo Alto: Known for its beautiful open-air design, this shopping center offers a unique Northern California shopping experience with around 200 stores featuring top names in fashion, jewelry, and electronics. It also has a remarkable bakery and specialty grocery stores​​.

The Great Mall of the Bay Area - Milpitas: This is a large indoor mall offering a mix of outlet stores, mid-range retail, and family entertainment. It's known for its wide variety of shopping options, although not all stores are outlets​​.

Westfield Valley Fair - San Jose: An upscale mall with strong anchor stores and brand names, covering about 1.5 million square feet. It features large play areas for children and an enormous food court with outdoor seating​​​​.

Santana Row - San Jose: A trendy urban residential neighborhood that blends a downtown shopping experience with city living. It offers fine dining, wine bars, and a lively nightlife scene on weekends​​.

Gilroy Premium Outlets - Gilroy: Located about an hour south of San Jose, this outlet mall features around 150 stores, offering a wide range of major brands and family shopping options. The entire town of Gilroy has grown in popularity, hosting traditional retailers as well​​.

Westfield Oakridge Mall - San Jose: Notable for its bright neon signs and tall architecture, it houses a variety of shops and restaurants, including popular brands like Michael Kors and Nordstrom Rack, as well as Century Theatres​​.

Eastridge Center - San Jose: A three-story mall in east San Jose, offering mostly casual-end brands and three department stores: JCPenny, Macy’s, and Sears. It also features AMC Theatres​​.

These shopping centers offer a mix of high-end retail, family entertainment, bargain shopping, and trendy urban experiences, catering to a wide range of shopping preferences and needs in Silicon Valley.

My previous 2006 post: There's no shortage of places to shop in Silicon Valley but there are five places that have a distinct flavor all their own.

Image of Stanford Mall Garden

Stanford Shopping Center - Palo Alto (Best Experience)

This beautiful open air shopping center has all the staples you'd expect from a high-end mall, presented in a uniquely Northern California way. Actually, "mall" and "shopping center" don't adequately describe the town plaza atmosphere created by the combination of architectural design and greenery. The Stanford Shopping Center boasts about 200 stores with the best names in fashion, jewelry and even electronics represented. Sweet tooths are rewarded by the impressive La Baguette bakery and the adjacent courtyard where you can enjoy your fresh pastries. Plus you'll find specialty grocery stores and a butcher onsite.

The Great Mall of the Bay Area - Milpitas (Largest Shopping Center)

The Great Mall of the Bay Area in Milpitas is the spiritual opposite of the Stanford Shopping Center. Inside this gargantuan building, you'll find a schizophrenic combination of outlet mall, mid-range retail and family entertainment. And while you won't always find the lowest prices here (since many of the stores like Old Navy are not actually outlets) there are an almost infinite number of places to hunt for bargains. Be sure to wear comfortable shoes and bring a stroller for the youngsters because it's actually possible to walk several miles if you explore the whole mall!

Westfield Valley Fair - San Jose (Best Traditional Mall)

Valley Fair is an extremely popular upscale mall, run in the typically efficient Westfield style with strong anchor stores and brand names. The mall is large, with about 1.5 million square feet of stores, and though walking through all of it is real exercise, it isn't daunting because of the layout. Parents often appreciate the large play areas for children and the enormous food court has outdoor seating which makes for a nice break from the bustle inside. There's bustle outside too as parking is tough on the weekends --- though it (seriously) may be easier than the line for the ladies room during peak times.

Santana Row - San Jose (Most Trendy)

Santana Row, located across from Valley Fair, is actually a relatively new urban residential neighborhood that was master planned to blend a downtown shopping experience with city living. Almost self-conscious about its own elegance, Santana Row is trendy without feeling contrived. Fine dining, wine bars, and even a courtyard chess set complete with two-foot tall pieces round out the experience --- until the weekend comes. Seemingly with the flip of a switch, the Santana Row nightlife becomes "the scene" with music, drinking and entertainment. And with the switch, parking becomes a dogfight in the tight garages.

Gilroy Premium Outlets (Best Bargains)

About an hour south of San Jose, the Gilroy Premium Outlets are a collection of about 150 outlet stores with an enormous selection of major brands and stores for everyone in the family. Because of the popularity of the outlets, the entire town of Gilroy is booming with traditional retailers as well like Costco, Home Depot, Best Buy, and others, making it a good one-stop shopping destination. Traffic between Silicon Valley and Gilroy is sometimes limited by a stretch of Highway 101 which narrows down to two lanes in either direction, and often leads to bumper-to-bumper conditions on weekends.

June 2020 South Bay / Peninsula Real Estate Market Update

Welcome to our June newsletter. This month, we’ll continue to update you with important information about your local real estate market. First, we will cover new survey data from the California Association of Realtors (CAR) that shows buyers and sellers are operating under differing expectations about the real estate market. Following that, we will review the local market. Although 2020 is proving to be unique, we hope to provide you with an encouraging analysis of May’s housing data as well as an overview of our expectations moving forward as we phase out of the strict stay-at-home orders. 

This month’s topics include:

• Key News and Trends Impacting Your Local Market: The June CAR survey reveals a rift between buyer and seller expectations. Median home prices remain resilient. Sellers are more hesitant to enter or remain in the market, while buyer demand gets a lift and mortgage applications rise.

• May Housing Market Update: Housing inventory plateaus, single-family homes and condos continue to sell close to list price, and homes under contract climb.

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Key News and Trends Impacting Your Local Market

Since most California counties are beginning to lift restrictions, we will start to see the housing market steadily recover. Although an exact end date to quarantine does not exist, on May 20th, Governor Newsom confirmed that more than half of the state’s 58 counties were moving into phase two of the widely adopted “four-pronged approach.”

On June 3rd, the California Association of Realtors (CAR) released survey data sampling California agents and their clients over the last week of May. The results revealed that buyers and sellers are now operating under very different expectations about the real estate market: the majority of buyers expect home prices to be lower while only a small number of sellers are reducing their listing prices.

In the long run, who is right will depend on how long the economic recovery takes. In the short term, however, the data tells us that single-family home buyers, at least, appear to have wishful thinking.

Silicon Valley median home prices did not decline enough for sellers to cut the listing price. In May, single-family home prices in San Mateo and Santa Cruz were only down slightly compared to the previous year while prices were higher in Santa Clara.

Compared monthly, prices did decline, most notably for Santa Cruz homes and San Mateo condos. However, monthly price movements, which are more volatile and often don’t capture as accurate a picture as year-over-year comparisons, will require sustained declines before homeowners should start pricing their homes materially below comparables.

Weighing in on the subject in his June 3rd market update, Jordan Levine, Deputy Chief Economist at CAR, said:

“We [now] expect some price impacts eventually as a result of some of the negative economic impact. . . . The price impacts will be in the modest category of the low single digits for 2020.”

Evidence supports the idea that price declines will only be in the low single digits for the 2020 calendar year. The market continues to see a larger sell-side impact, meaning that housing supply has declined more than buyer demand. The survey data below shows that far more sellers withdrew listings than buyers withdrew offers.

While sellers continue to grapple with the state of the market, California is again facing a major housing shortage, which prevents prices from dropping. The CAR survey also provided the most recent mortgage application data for both California and the United States. In May, California mortgage applications for home purchases (as opposed to refinances) rose significantly from April and are only down 1.7% from this time last year. Mortgage applications correlate with buyer intent to purchase a property and indicate the number of homes under contract and home sold.

All of this is welcome news. The May data assures homeowners that their home equity is still intact as restrictions begin to lift. It should also encourage buyers who may have been delaying a home purchase to enter the market.

A fourth CAR survey result illustrates the degree to which both supply and demand is currently stagnating. Over half of the California realtors surveyed indicated that they had at least one client that was delaying buying or selling until conditions changed. We assume that this pent-up demand will give way in the coming months to more participation and market activity from both sides.

Alongside pent-up demand, there are the changes to daily living which may impact home purchasing decisions in the future. In order to ensure employee safety, companies have massively shifted toward a remote workforce, which creates new space requirements for potentially millions of Americans. As a result, millions of Americans may need to consider purchasing a new home that better accommodates work from home. Remote work also means employees can live almost anywhere. Without physical restrictions, employees may look elsewhere for places to live such as locations with lower costs of living. Between new housing requirements, low rates, and pent-up activity, there is potential for a busy summer buying season that is similar to what we usually see in the spring.

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May Housing Market Update for Silicon Valley

Over the last three months, the housing market has changed so rapidly that we began to look at the data on a weekly basis rather than a month monthly basis (as is typical) to illustrate how significantly the market has changed over a shorter timeline. 

In the month of May, the weekly Silicon Valley housing data for single-family homes supported the survey data from CAR. First, housing inventory has hit a plateau after a steady climb from the March trough as sellers continue to hesitate entering the market.

The plateau in inventory is also due to an increase in buyer demand; homes under contract have increased steadily since the phased reopening of the economy began. They have risen well past pre-pandemic levels in early March. 

The sale-to-list ratio reflects the change in the original list price and the final sale price of a home. For example, a ratio of 100% means that a home sold for the price at which it was most recently listed. In the Silicon Valley, sale-to-list prices have been consistent; buyers and sellers are negotiating the final sale price in line with the list price.

We also look at months supply of inventory, which measures how many months it would take for all current listings on the market (including listings under contract) to sell at the current rate of sales. In May, the months supply for single-family homes rose. This may seem counterintuitive to the weekly data above (which shows less inventory and more homes under contract), but remember that months supply compares inventory to sales. Low sales volumes recorded in May are the result of the low volume of homes under contract in late March and early April; said another way, homes under contract turn into sales around 30 days later. Expect recorded sales volume to increase in June and months supply to decrease. San Mateo stayed relatively flat from April to May because sales and inventory increased at a similar rate.

In May, sales volumes were only slightly down from the previous year in Santa Clara and Santa Cruz, rebounding from April lows. In San Mateo, sales were up by 20%. This shows how rapidly the housing market is recovering.

As we discussed in previous newsletters, the fundamentals of the housing market were strong before the global economy stalled, and they have continued to show stability during the months of quarantine.

Looking ahead to July, we anticipate housing market activity to increase as pent-up demand turns into participation from both sides. We will closely monitor the evolving state of the market to make sure that our clients are pricing and negotiating to get the most value out of their transactions.

Median Home Prices and Sales in the Peninsula

The San Jose Mercury News has a nice breakdown (below) of the median sales price and number of sales for each zip code in the Peninsula (Santa Clara County, San Mateo County, and Santa Cruz County). You can also see the percent change comparing this January to the same period in 2010. In the Silicon Valley (Santa Clara County) the median sales price for all homes was $460,000, a 2% drop from the same period last year. But looking at resale homes, we saw a 1.9% increase to $529,000. Looking at number of home sales in the area, there were 1,424 sales for all homes, a drop of 10.9% from last year; in resales, 987 sold, which was 5.6% less than last year. We'll soon see in the spring and summer months of 2011 if it picks back up, when the majority of sellers and buyers are on the market.

Overall, Los Gatos Los Altos zip code 94024 had the highest median sales price of $1,569,000, but Palo Alto/East Palo Alto zip code 94303 had the highest $/SqFt at $883. On the other side of the scale, San Jose zip code 95133 had the lowest median sales price at $230,000, and Gilroy zip code 95020 had the lowest $/SqFt at $195.

Silicon Valley Housing Market Trends – Fourth Quarter 2010 Update

Since the crash, the Silicon Valley has recovered faster than the nation on average. Narrowing the range to our four comparison cities - Los Altos, Mountain View, Palo Alto, and Sunnyvale - we have an above average group even against Santa Clara County (see graph below). Experts at DataQuick, an independent real estate analysis company, report that the median sales price and home sales have fallen in the Bay Area from a year ago. The same is true in our example cities. But in a post-crash economy the most important factor real estate professionals, buyers, and sellers are looking for is a stable market.

Prices in our four cities have remained stable, yet deprecated, for the past two years. What will really excite the housing market is a return of high-cost homes and increased buyer confidence found in areas such as gains in employment and relaxed credit standards from banks. While some have seen this as an opportunity to find a house for less, most of the market is collectively holding its breath.

So with anticipation of what 2011 brings, lets review how 2010 was for our four real estate cities.

Median Selling Price Q4 2010

We've also talked about the median selling price over the years here and here, and we're getting further away from the dump in housing prices that occurred late 2008. Like we mentioned in the opening, what people are looking for is stabilization, but also, at what price will that occur.

This quarter, Palo Alto nearly dropped to its lowest price since the bust, unusual for a strong market, but is expected when top-tier homes are not being put up for sale until the market improves. There is obvious demand in this city as it has the lowest average days on market of our comparison cities (see third graph). Currently, Palo Alto is around 2005-2006 levels, which is about 4% lower than the fourth quarter in 2006 compared to the same quarter in 2010.

But where Palo Alto struggled in the past two quarters, Los Altos has risen two straight quarters. Although the news is tempered by its current fourth quarter median sales price, which is about equivalent to its first quarter in 2006.

At a price point $500,000 or so lower are Mountain View and Sunnyvale. Continuing to be the most stable city of the group, Mountain View has reliably hovered at a median price of $900,000 for single-family homes -- equal to the first half of 2006.

Sunnyvale reflects the current movement of Santa Clara County, and moved back to levels found near the end of 2004.

Sales Price to Listing Price Ratio

The sales price to listing price ratio gauges buyer and seller expectations. (Consider that a 1% difference here on a million dollar home is equal to $10,000.) The first thing that jumps out is Palo Alto is the only city in our comparison where homes are selling higher than their listing price, a ratio above 100%.

With Palo Alto and Los Altos trends reversed from our last graph, Los Altos increased its median price but the majority of the home sales in the city have made pricing adjustments to fit the mood of the conservative buyer. Mountain View, which also saw a bump in the median price, faced a dramatic drop of about two percent to 98%, down from 100%. This could be a correlation with more aggressive sellers entering these markets, but they are not getting the bites they saw in 2008.

Sunnyvale remained similar to the previous quarter, nearing a balanced market between buyer and seller.

Interestingly, Santa Clara County has not realized a ratio above 100% for some time, unlike our four comparison cities. Going back to our 2000 to 2010 report, the county broke 100% in the beginning of 2004, peaked above 104% for single-family homes in spring 2005 and fell under again mid-2006. As a comparison, the average ratio for our four cities remained above 100% from 2004 until late 2008.

Average Days on Market Q4 2010

Average days on market is another good indicator of market health. So much so that sometimes buyers and sellers put unreasonable weight into days on market of a house listing. But in markets where emotions can play a large role in a purchase, it is not unexpected and something to be dealt with.

This graph mostly looks like a mess of weaving colored lines, with no consideration to housing prices. Signs of a bubble popping through a climbing average days on market were felt in Santa Clara County as a whole late 2005, whereas most of our four comparison cities kept an average days on market below 40 until 2009. The days on market of the county and our cities are more closely aligned now that the market has cooled, as we can see they are following a similar trend since late 2009.

Number of Closed Sales Q4 2010

In the number of closed sales graph we were able to put our four comparison cities on the left vertical axis and also include Santa Clara County homes sales using the right vertical axis. While county sales are not comparable in number to city sales, displaying both can help compare overall trends to the individual cities.

Traditionally, home sales dip during winter and peak during spring and summer. But looking at 2010, Palo Alto pushed up, Los Altos dipped, Mountain went up, and Sunnyvale followed the winter plunge. Buyers are out there combing for good deals, especially in valued markets such as Palo Alto. Though previous years have shown that the biggest dip happens during the first quarter of year, so we'll have to wait and see if these cities continue to break the trend.

One positive emerging trend occurring for all our four comparison cities and county alike, is a steady increase of sales, most clearly seen when you compare first quarters.

Sunnyvale Housing Market – Fourth Quarter 2010 Update

The winter months are rolling through the fourth quarter of 2010, and home sales have sunk along with the median sales price and average days on market. This is no surprise and remains a truth that there are seasons in real estate, and we can expect it to stiffen as we enter the first quarter of 2011.

Comparing the fourth quarter of 2010 to the same period in 2008 (closed sales, 90; average days on market, 47; median sales price, $656,500) and in 2009 (closed sales, 141; average days on market, 52; median sales price, $760,000), Sunnyvale is wavering but not falling into a double dip market that bearish experts are predicting.

What to Expect When Buying or Selling During the Winter Months

winter sales comparison

From the graph above, even though the real estate market has been a mess these few past years, it’s easy to see new listing and buying trends: lots of new listings in March followed by peak selling a couple months later, then a dramatic drop in everything around November. (Check out our prior post going more in-depth on market cycles.) Off hand there’s a couple good reasons for this. Though it may not be as pronounced here in the Silicon Valley, cold and rainy weather play a role in how attractive a property looks and keeping it presentable for potential buyers. Also it’s the holidays, when many people are with families or travelling. Lastly, it’s harder for families to move once school starts for their children.

So what do those remaining buyers and sellers see in the winter months?

As a homebuyer in the spring and summer months, you are approached with a large selection of new listings but an equally large group of competing buyers. These months are to the sellers’ advantage. The market turns in favor to buyers once the temperature drops and competing buyers thin out. During this period, sellers are usually more motivated to sell the house over getting the best price. For the buyer it is a great time to push for a deal, albeit you are looking at 50% less listings than there are in spring and summer.

The main reason against listing a home in the winter time is that the chance to get a high selling price on a home is reduced because buyer competition is reduced -- expect to make some compromises with buyers who already understand the importance of timing. Though this is not the case for every new listing during winter, since a desirable house will always draw attention.

But the tradition of only selling in the summer months is being influenced by the wake of the real estate crisis that started around 2007. With a depreciated housing market and mortgage rates at record lows, many buyers are aware that no matter the season this is an opportunity to buy a house they might not have been able to afford five years ago.

Reasons to sell near the end of year can be tax related, examples include 1031 exchange, which defer capital gain taxes, or inheritance taxes. And there is always personal reasons, including relocation for a job or divorce.

Whatever the reasons for selling in the winter, the biggest worry is having a high days on market (DOM), which makes an otherwise fine property look stale. One way to avoid this is to drop the listing price and excite interest. And if a seller can afford to have patience, they can take the home off the market until an allocated number of days before putting it back on the market with a restarted DOM. And then you are back to the excited spring market.

Real Estate News Roundup: October 29th

Giants in the World Series

A shout out to The Orange and Black, living up to the name and making Texas look small. Good luck this Saturday and Sunday:

And in other orange news, your Halloween community event list:

• Zillow.com breaks down the 20 best cities for trick or treating, and best places to trick-or-treat in San Jose.
• San Jose Mercury News Halloween holiday headlines
• Los Altos events, via the Town Crier.
• Mountain View events, via the Voice.
• Palo Alto events, via the Weekly.

Bay Area Real Estate News:

• Palo Alto Weekly article talks about local "premium" housing developments.
• SF Gate: On The Block says Bay Area real estate is walking on tight rope -- inventory is thin and demand is fickle.
• Another one for On The Block, five red flags for renters.
• Real estate monitoring company DataQuick reports that "Bay Area September Home Sales Second-Lowest in 19 years." On the other side of the coin, the median sale price is 8% higher than a year ago.
• The Chronicle reports that Bay Area foreclosures are down 32.5% from last year; statewide they were down 25.5%.
• San Jose mercury reports on a job market study done by Beacon Economics. In the third quarter of 2010, the Bay Area brought in 4,500 payroll jobs. But, construction, retail, and government remain the weakest industries.

National Real Estate News:

• We all appreciate politics that call it as it is: presenting Jimmy McMillan of the Rent is Too Damn High Party, via Wall Street Journal.
• Fresh Air with Terry Gross untangles the mortgage foreclosure crisis with guest Gretchen Morgenson, from the New York Times. A good summary of how we got here and how banks aren't helping solve foreclosures through the use of "robo-signers."
• The Associated Press: New home sales rise 6.6% after dismal summer

To Fill Your Inner Real Estate Gossip:

• Among other news, Chelsea Handler needs to talk to Mr. McMillan. She is renting for $35,000 a month in Brentwood, CA, via NBC Bay Area.
• Couldn't help but one last Giants mention. Online tickets for the games at AT&T Park sell into the thousands, via Oakland Tribune.

Silicon Valley Housing Market Trends – Third Quarter 2010 Update

For the 2010 third quarter housing market report we are going to look at quarterly graphs back to 2006, which should help us better understand where we are today in the Silicon Valley. After the crash in 2007, the best thing we can do is look how are we doing compared to the year before. Putting a long view on it spins it for the worst: Bay Area sales: a region on a tight rope; Bay Area September Home Sales Second-Lowest in 19 years. Our four comparison cities -- Sunnyvale, Mountain View, Palo Alto, and Los Altos -- have performed well in the last year. Here are some highlights that compare this quarter from the same period in 2009:

- Sunnyvale, Mountain View, and Palo Alto have improved their median sales price - Average days on market dropped 30% or more in all four cities - Palo Alto bumped above 100% in the sales price to listing price ratio for the first time since 2008 - Number of closed sales are up in Palo Alto and Los Altos, and down in Mountain View and Sunnyvale; Concurrently, the same is true for total sales volume.

So read on to get more information about the number of homes sold, median sales price, average days on market, and selling price to listing price ratio. All of our data comes from MLS listings inc. measuring single-family homes.

closed sales - 2010 Q3

The homes sold graph clearly shows the natural market cycle that dips in the fall and peaks in the spring and summer. What we are looking for in the following graphs is how each individual city performed before the housing bubble crash (pre-2007), during, and in the recovery period (after 2009).

All cities began to slide in 2007 and dropped to their lowest levels at the end of 2008. This also meant more homes on the market and an increased inventory, including foreclosed and short-sale properties.

If we compare the first quarter of 2009 to the first in 2010, all four cities jumped in number of homes sold: Los Altos (+133%), Mountain View (+130%), Palo Alto (+44%), and Sunnyvale (+13%).

median - 2010 Q3

In median sales price we can see the obvious spike in home prices that occurred because of the housing bubble. Mountain View peaked mid-2008, about a year before the other three cities did. Mountain View also suffered less of a downturn when the bubble popped. You can see the other three cities sliding at the end of 2008, while Mountain View prices increased.

Today, we notice that levels have smoothed out since 2009 and have worked their way towards 2006 levels, experiencing a small drop, with Los Altos the exception, this quarter.

Another thing to consider in the steep drop of home prices at the beginning of 2009 was in part of expensive homes coming off the market, such as in Los Altos, and low-valued foreclosures and short-sales coming onto the market, bring down the overall median sales price. Like mentioned earlier, Sunnyvale (+3.6%), Mountain View (+3.4%), and Palo Alto (+6.7%) increased their median sales price compared to last year, but realized a deprecation from last quarter; the reverse is true for Los Altos.

average days on market - 2010 Q3

Average days on market is a good indicator of market health -- closer to 30 days means properties are coming onto the market at a good price and buyers are interested; above 60 days means properties are priced poorly or buyers are nervous about the market, or both.

Los Altos peaked in early 2007, quickly dropped, and followed the similar trend of the three other cities, but taking, until 2010, the longest to recover.

Sunnyvale is interesting because it has the largest population and is the city with the lowest median sales price. It is more likely that Sunnyvale had more distressed properties that pushed up its average days on market higher than the other cities from 2007 to 2009. But Sunnyvale also dropped the soonest once buyers became confident in the market again just after 2009.

Palo Alto, considered one of the strongest housing markets in the state, had the lowest days on market this quarter of our comparison cities. In the next graph we can see that it is also the only market that has turned into a seller’s market.

sales to listing ratio - 2010 Q3

In the sales price to listing price graph we explore what makes a buyer’s market (below 100%) and what makes a seller’s market (above 100%).

As the housing bubble grew, buyers were willing to pay above listing prices to get the home they wanted. From our previous median sales price graph, home prices peaked in the third quarter of 2008, but then quickly fell in 2009 -- Los Altos being a major example of peaking in median sales price then falling the most in both the median sales price and the listing price to sales price ratio. Buyers weren’t taking anything for a period and sellers weren’t ready to adjust their home prices.

It has taken until 2010 and later for the market to really stabilize here in the valley. The ratios for Mountain View and Sunnyvale are hovering around 100%; Los Altos is still struggling at 97%, while Palo Alto has turned to a seller’s market at 101.26%.

Closing It’s always easy to look back and be able to see that the housing market was peaking, but at the time it is very difficult for an individual to judge if the market would sustain its levels or pop like it did. What we are realizing today is a much more conservative market that is looking for a sustained growth rather than the feeding frenzy that happened. One advantage of being in the Silicon Valley is that although we took a hit, we returned to levels that existed only four years ago and are seeing signs of stabilization or even growth (Palo Alto really standing out). We’ll be able to tell in the next couple quarters if that holds true (the upcoming winter quarter is slower for real estate), and we’ll try to do a larger comparison that shows the Silicon Valley compared to other parts of the nation, and lastly, how neighborhoods within cities are doing.

Los Altos Housing Market – Third Quarter 2010 Update

One thing to consider when looking at data from Los Altos is that its population of around 30,000 is less than half of the next smallest city in our quarterly comparison. But, on the other hand, the median price is the highest at $1,565,000 -- 13% higher than Palo Alto and almost double either Sunnyvale or Mountain View.

median_2010Q3

In the third quarter of 2010, the median price bumped up 4.3% from last quarter and is equivalent to 2006 levels. Another positive sign for Los Altos is that average days on market is in the 40s range, a significant improvement from the third quarter last year, where it was hanging out at 67 days.

The last item of note for Los Altos is the sales price to listing price ratio has fallen this quarter, 96.96% from 98.21% last quarter. Since 2008, Los Altos has been a buyer's market, while our three other comparison cities have been trending towards a seller's market. Buyers aren't necessarily hesitant but we are seeing a lot of price adjustments in the area.

Bay Area Real Estate Shifting to a Seller's Market, U.S. Still Slipping

Bay Area home sales in August may have dropped to an 18-year low (an 11% decline from last year), but the median sales price rose 6.9% from August 2009, according to a report released by MDA DataQuick this September. And viewed with a wider lens, things have been steadily improving in the Bay Area:

Last month was the second in a row to post a month-to-month decline in the median, which so far this year has peaked at $410,000 in May and June. On a year-over-year basis, the Bay Area median has risen for 11 straight months, though before July those increases had been in the double digits – ranging from 10.6 percent to 31.0 percent – since last November.

The San Jose Mercury News posted two stories on the report, asking Are Silicon Valley homebuyers holding out for lower prices? and stating that although the market is falling, it's not falling as fast as it was.

While the real estate prognosis changes from county to county and even neighborhood to neighborhood, the big picture drawn by DataQuick's numbers shows things pretty much bouncing along, with the market neither going off a cliff nor shooting for the stars.

While on a national level, Bloomberg News took a gloomier viewpoint on the real estate outlook, reporting that home purchases in August were at their second-lowest level since 1963, when experts first started recording the data; and the median selling price of $204,700 was at its lowest level since December 2003.

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market. ... “Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”

Which is where currently the Bay Area differs from the rest of the nation. Stated at the end of the Mercury News article, the inventory of unsold homes is shrinking to the point where in the next couple of months Bay Area real estate could turn into a seller's market. _

Recommended Reading:

• Where Are We Now? 2000 to 2010 Silicon Valley Real Estate Report
• Silicon Valley Housing Market Trends – Second Quarter 2010 Update
• The Yearly Cycles Behind the Silicon Valley Real Estate Market
• When Not to Buy a HouseHow Much House Can I Afford? (Part 1 of 2)