Menlo Park Housing Market Update - October 2007
There's an interesting opportunity in Menlo Park when you take into account that the city has multiple personalities. I want to illustrate this using the median home chart below and a couple facts. First, if you look at the homes that are available, there are just as many single-family houses available between $400K and $800K as there are between $1.5M and $2.5M. 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 - $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.
