Palo Alto

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
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
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 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
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.

 

Palo Alto Housing Market – Fourth Quarter 2010 Update

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Palo Alto, the feather in the cap of Silicon Valley real estate, struggled with its median sales price, falling two straight quarters after reaching its peak in second quarter of this year since the housing bust. The fourth quarter of 2010 was lower than the same period in 2008 ($1,350,000) and in 2009 ($1,370,000). This is due to two factors: the real estate market adjusting to pre-bubble prices, and fewer expensive properties being listed because of the deprecated values.

On the positive side, sales are up overall, beating all previous quarters this year and the fourth quarters of 2008 and 2009. The sales price to list price ratio is also one of the most balanced of our four city comparison, and with a ratio just above 100%, the only one favoring the seller.

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
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
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 - 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
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.

Palo Alto Housing Market – Third Quarter 2010 Update

palo alto real estate third quarter 2010 chart

Palo Alto really established itself this quarter as a market leader. Compared to the third quarter in 2009, Palo Alto has improved in all five measures. This quarter Palo Alto jumped its selling price to listing price ratio ahead of the other three cities in our comparison to 101.26%, turning it into a seller's market. Though, what this means for future home prices or the market is anybody's guess as we enter the winter quarter.

ratio_2010Q3

The average days on market in Palo Alto remains the lowest of our four cities at 35 days, a drop from 57 days for the same period last year. Palo Alto also has the highest total sales volume, even though it has the second smallest population in our comparison. This is due to the wide range of property values available in Palo Alto, from just under a million to the many millions.

Silicon Valley Housing Market Trends - Second Quarter 2010 Update

In the second quarter of this year (April to June) we can really see which areas of the housing market have bounced back from the crisis and which areas are still struggling. To visualize those details, and to complement our second quarter 2010 analyses of Los Altos, Mountain View, Palo Alto, and Sunnyvale, we have created some city comparison graphs. 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: 

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.

Recommend Reading:

Palo Alto Housing Market – Second Quarter 2010 Update

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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%.

New Construction Review: Redwood Gate by SummerHill Homes, Palo Alto

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The corner of El Camino Real and West Charleston Road has undergone a lot of real estate development in the past few years. First it was the 181-unit Arbor Real on the corner and now on the old Elks Club property, beside Arbor Real, is the new Redwood Gate by SummerHill Homes development. (map.)

The properties are listed as detached and attached single-family homes, which are unlike the the condominiums and townhouses available at the previous housing developments we have reviewed, Altaire and Sterling Park.

Redwood Gate may have better features, a better location and more square feet than its "competitors," but it also has a higher price tag -- $1.15 million to $1.499 million. Continue reading to find out more about this Silicon Valley real estate development and see if it lives up to the old adage: you get what you pay for.

Overview

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Redwood Gate is one of the smaller real estate developments in Palo Alto with just 35 detached and 10 attached single-family homes, plus a half-acre park.

Construction of the single-family homes at Redwood Gate started in 2009 and will be completed by the first quarter of 2011. The neighboring Elks Lodge is also under construction and will be completed by October 2011.

As of June 2010, 26 homes have sold and nine homes are currently available; in the future, the five homes in the park location, two of the attached homes and the three remaining model homes will be available.

The development is located in the Charleston Meadows neighborhood and close to the neighborhood’s three schools -- Juana Briones Elementary, Terman Middle School and Gunn High School -- that are all less than a mile away, and off of Arastradero road.

As a further incentive to visit Redwood Gate, receive a $50 Visa gift card for scheduling a tour of the properties with one of our agents in the month of July.

Details and Pricing

Redwood Gate properties are listed on MLS Listings Inc. as either attached or detached single-family homes, but sold to homebuyers under condo ownership and approved for loans under the detached condo category. This is the only way that developers could get approval in Palo Alto for building homes that have a large living space on a small lot. Otherwise, the residences resemble the single-family homes they are priced at -- the median price for homes in Charleston Meadows in 2009 was $1.25 million; condos were $801,000.

Being in a single-family home, instead of the condos and townhouses found at Altaire and Sterling Park, means that the homes do not share walls (even the duet-style homes, which are connected but have air space between walls), and the homeowner owns the house along with the land underneath and the yard for 10 feet. Homeowners, also, own a percentage of the common area through a $202 monthly HOA fee, which includes landscaping, all water usage, garbage collection, exterior property insurance.

Along with a difference on paper between Sterling and Altaire, is the difference when you see the property. Redwood Gate properties are about $500,000 more than a comparable townhouse at Altaire, but also have a two-car garage, large patio space, high ceilings, an extra loft room and 500 square feet more.

All seven floor plan options are still available at Redwood Gate as of June 2010. Plans range from three bedrooms two-and-a-half-baths and two stories through five bedrooms three-and-a-half-baths and three stories. Residence 1A has 1,7775 square feet all the way through residence 7B with 2,380 square feet, and listed at $1.15 million through $1.42 million, respectively. Upgradeable features are also an option.

Highlights

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New and modern homes. We’ve already mentioned the extra space and privacy that Redwood Gate allows, which means there is more flexibility for growing families. A new build means modern features, including Kohler sinks and faucets, GE stainless steel appliances, maple cabinetry, granite countertops, volume ceilings. Homes are also designed to be GreenPoint Rated, which help in energy efficiency and are environmentally friendly.

Smaller development size means a closer community and less hassle over parking spots, including the 14 guest spots. It is also surrounded by another housing development, the Elks lodge, and a pleasant residential area on Wilkie Way in the rear.

Good location in Palo Alto. If you ignore the busy El Camino Real intersection, Redwood Gate is better and more centrally located in Palo Alto over Altaire and Sterling Park. It is walking distance both to schools and Robles and Briones Park, and one mile from Charleston Shopping Center and San Antonio Shopping Center.

Strong home values. Because Redwood Gate properties sell as single-family homes their value will be more stable over the condo and townhouse market. In addition, Palo Alto, as we have seen, is one of the strongest real estate markets in Silicon Valley.

Concerns

Traffic on El Camino Real can be difficult, but noise shouldn’t be an issue because the Elks Lodge lies between Redwood Gate and the street.

Limited parking could be a pain if you plan on having more than two cars. Besides the 2-car garages, there are only 14 guest spots available here.

It is a high purchase price for condo ownership at Redwood Gate when considering that the median selling price in 2009 for homes in the Charleston Meadows neighborhood was $1.2 million. Having said that, the homes have been selling at a rate of two a month, so demand is clearly there. Another consideration is that standard homes under $1.2 million in Palo Alto are not going to be new and most likely need repairs or upgrades, and lack the premium build and features that a new development like Redwood Gate has.

Comparables

Altaire and Sterling Park aren’t comparable since price and features differ so much as we covered under the pricing details category. The locations of these properties are less than ideal since both sit near 101 and at the edges of Palo Alto. Another option for homebuyers in this price range would be to consider an entry-level home.

In the past three months (April, May, June 2010), the median price in south Palo Alto for single-family homes has been $1.26 million. Of those homes that have sold, the average age is 56 years old, average interior square footage is 1,779 and average lot size is 7,200 square feet.

So Redwood Gate homes have equivalent interior space and come with all the advantages of a new build and low maintenance, but on the other hand, lack in lot size and ability to customize when compared to a traditional home in Palo Alto.

Takeaway

These homes are generally targeted for people that are moving up from a condo or townhouse and need the extra space for a growing family. The residences offer the benefits of a new community development but also the future stability in home values that a single-family home has in Palo Alto. Of course, Redwood Gate prices reflect these criteria and it certainly is a quality development, but the high-price tag could be a determining factor for a lot of potential homebuyers.

Feel free to contact us for more specific information and an opportunity to tour Redwood Gate in-person (plus a $50 Visa card if you visit in July), or just to find out more about our unique Silicon Valley real estate services.

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New Construction Review: Sterling Park by Classic Communities, Palo Alto

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Sterling Park is another of the recent housing developments in Palo Alto, which also includes Altaire and Redwood Gate. Located in the Midtown neighborhood, the use of mixed housing and two on-site parks helps Sterling avoid the compact feeling of standard developments in Silicon Valley and lets its residents enjoy some extra space. Click through to find out more about the property.

Overview

Parallel to the 101 freeway and on the corner of West Bayshore Road and Loma Verde Avenue, 96 units compose the new Sterling Park development, which is slated to be completed early 2011.

The development is broken down by 28 detached single-family homes, 39 townhouses and 29 condominiums. Potential buyers should be aware, however, that all its single-family homes are sold out, and only one remaining three-bedroom and two remaining two-bedroom townhouses are available as of June 2010. That leaves the 29 one-and three-bedroom condominiums left, which will be released for sale this October.

The six and a half acre site accomplishes a neighborhood feel with wider streets, mixture of home types, focus on the two central parks, and a nose mitigation wall beside the 101 freeway to reduce the noise and view of passing traffic.

The Midtown neighborhood, which Sterling is located in, is known for its small-town feel and there is a variety of positive things to say about the nearby schools -- Palo Verde Elementary, Jane Lathrop Stanford and Henry Gunn High School.

For basic information, available floor plans, features and sales information about Sterling you can visit their web site.

If you are ready to visit the property for your first time, consider representation from a local Silicon Valley real estate agent who can provide information about local comparable properties and help in sales negotiations. The second half of an older post I did goes over these considerations.

Details and Pricing

The two remaining two-bedroom three-bathroom and one-car garage (floor plan 4) townhouses start just under $800,000. The last three-bedroom three-and-a-half bathroom and two-car garage (floor plan 5) townhouse is selling for under $900,000.

The upcoming 29 condominiums will start at approximately $600,000 when released late 2010. They will have either one or three levels, with a respective amount of bedrooms; and range from 1,050 square feet to 1,800 square feet.

In addition, all properties include either a one-or two-car garage. Street parking will be limited to the 39 visitor parking spots and reserved spots that are estimated to sell for $5,000 each.

Homeowner’s association fees will initially be $325 a month, but reduced to under $200 once all the homes sell out, which should occur upon the developments completion by mid 2011.

Highlights

Lots of space. Because Sterling is composed of single-family homes, townhouses and condominiums, two parks and a community recreation center, the scenery is more pleasant than the dense row housing we usually see in developments. Traffic shouldn’t be a problem on West Bayshore Road and most parking inconveniences have been reduced since every property has their own garage.

Affordable, luxurious, green. Prices starting at $600,000 for a condominium in Palo Alto are a strong draw for many first-time buyers. But Sterling also has luxury features such as gourmet kitchens with General Electric appliances and granite countertops, and large master suites. Standard green and energy-efficient features reduce utility bills and result in quieter homes.

A location in the Midtown neighborhood means Sterling is only one mile away from fulfilling basic shopping and restaurants needs at the Midtown shopping center, which includes Longs Drugs, Safeway, Starbucks and Mike’s Cafe. And only half a mile from Greer Park, Seale Park and the Palo Verde Elementary School.

Concerns

Beside two office buildings and the noisy 101 freeway. The developers did their best to mitigate both these issues by, first, focusing the real estate development inward and towards the parks. Second, noise levels have been reduced by a wall built along the freeway. Lastly, for condos located on Bayshore Road, the developers have taken extra measures to reduce the noise through sound insulation like double-pane windows.

Competition:

Two other currently competing real estate developments in Palo Alto are Altaire and Redwood Gate. Comparable properties at Altaire are about $100,000 higher and Redwood Gate is mostly detached homes starting above a million. So expect nicer overall building quality and features at those two developments, but both are located at crowded intersections. Redwood Gate has the advantage of being centrally located in Palo Alto, while nearby Altaire is at the boarder of Palo Alto and Mountain View.

Takeaway

Most buyers looking into Palo Alto already know about its strong real estate market and fantastic school district and API scores. But most are taken aback by the steep Silicon Valley real estate prices, and is why many developments in Palo Alto make it possible for new homebuyers to break into Palo Alto’s prestigious market.

Sterling Park reflects this demand and doesn’t skip on features that should enable the properties to hold their value in the coming years.

Feel free to contact us for more specific information and an opportunity to tour Sterling Park in-person, or just to find out more about our unique Silicon Valley real estate services. 

New Construction Review: Altaire by Regis Homes, Palo Alto

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Altaire, the newest townhouse development in Palo Alto, should be on anybody's shortlist when looking for an entry-level opportunity to move into the area without forgoing quality accommodations. We'll cover some important details you should know about the property in this post.

Overview

The 103 urban-looking townhouses are set along open walkways and adjoined to the recently constructed Taube-Koret Campus for Jewish Life, which, together, create a feeling that is unique from traditional high-density developments. The whole complex site is right off the 101 freeway at 3901 Fabian Way.

Construction on Altaire is expected to be completed by late 2010. As of June, 59 of the 61 townhouses already completed have sold, and developers are currently in the last phase of construction for the remaining 42 homes, which are expected to be sold out by the end of the year.

For a quick description of Altaire, floor plans and features visit their website. You can also take a YouTube tour of the residences and view example show homes on their flickr page.

Also of note, when considering a property, especially a new build, representation from a real estate agent can help provide the buyer with a larger knowledge base in areas like negotiating a final sales price or showing comparable properties in the area. The second half of an older post I did goes over these considerations.

Details and Pricing

Image shows the entire layout of Altaire residences in yellow on the left, and the rest of the campus and fitness center on the right. (Click image to enlarge.)

Available properties include one, two, three and four bedrooms; and prices start at $479,000, high-$600,000s, $739,000 and high-$800,000s, respectively. The typical three bedroom unit is around 1,300 square feet, while a four bedroom is around 1,900 square feet.

Homeowner's association fees are from $375 to $475 a month and include: water, disposal, landscaping, insurance, two underground parking spaces and storage, and maintenance.

Also included in the purchase price is a free year membership to the JCC fitness center — a 33,560-square- foot space that includes an indoor and outdoor pool, basketball court and gym, and an expected membership of 10,000. The campus also has a preschool, senior living residences, and cultural arts center.

Highlights

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Altaire is an upscale townhouse community. New owners can expect spacious and contemporary designs, stainless steel Bosch appliances, in-home laundry, high-efficiency air and cooling, secure underground parking, and high-speed Internet connections. The townhouses were designed to meet both ENERGY STAR and GreenPoint Rated programs for energy efficiency and eco-friendliness.

Being located in Palo Alto means residents can expect some of the best schools (Fairmeadow Elementary, Jane Lathrop Stanford Middle School and Gunn High School) in California, a bustling downtown, Stanford University and Shopping Center, and a strong local government. Altaire is ideally located near the Baylands PreserveShoreline Amphitheatre, Century 16 Theatres, and retail developments Charleston Plaza and Rengstorff Center, which includes Costco, Best Buy, and REI.

Strong home values will continue in Palo Alto as we have seen in the 2010 quarterly post on the real estate market.

The adjoined Community Center creates a convenient neighborhood environment. Just outside the door is the previously mentioned fitness center that also has a soccer field, tennis courts, and Pilates and yoga studios. There is also a cultural arts center, cafe, preschool and day care, meeting rooms with planned adult programs and lectures, and senior living residences.

Concerns

Area originally zoned for commercial buildings. Altaire and the community center was built atop the old Hewlett Packard site, which means that the surrounding scenery is mostly corporations like Space Systems/Loral on Fabian Way and the 101 freeway nearby.

Being at the edge of Palo Alto means a longer drive to downtown, schools or other popular spots in the city. Conversely, though, it is located near two big shopping centers, the movie theater and concert venue, and Baylands Preserve.

Expect more traffic and noise from the busy intersection at San Antonio Road and East Charleston Road, and also when the Community Center holds events -- an expected trade-off of living in a more urban environment. Buyers also get two underground parking spaces with storage, but not the convenience of an attached garage.

Competition:

Sterling Park is another new housing development on 1080 Loma Verde Ave., which is a mile north of Altaire and separated from the 101 Freeway by West Bayshore Road.

The development has sold out of single-family homes, but the remaining townhouses are priced and have a contemporary style similar to Altaire, though different floor plans and amenities available. Sterling Park has attached garages and is adjacent to a residential neighborhood and near Greer Park, but on the other hand, there are commercial buildings on two of its sides. Lastly, most of the remaining townhouses available sit on West Bayshore Road.

Takeaway

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As with any home purchase, there are positives and negatives that the buyer must personally weigh in their final decision.

Palo Alto's strong real estate market and outstanding school district and API scores is a draw for many buyers, and combined with today's depreciated market increases the attraction. Additionally, Altaire makes the most of its location, offers premium townhouses and a Community Center that other developments cannot match. For these reasons, first-time buyers and anybody interested in a new build should take the time to consider if Altaire is the right place to settle down.

Comparing Real Estate Trends of Local Cities

In order to help visualize the previous posts on the 2010 quarterly updates for Palo Alto, Los Altos, Mountain View and Sunnyvale, the graphs below show each city in comparison of overall home sales, median selling price and average days on market. The graphs cover quarterly results from 2008 to 2010 for single-family homes using data from MLS listings Inc.

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Number of homes sold –

It is hard to see how the cities responded to the crisis within this time frame since most home sales drop off during the winter months and spike in summer. But it is clear that home sales sagged in the first quarter of 2009, were slow to return initially, and then eventually returned to similar or stronger numbers by the end of 2009, which have continued through 2010.

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Median selling price

All four cities home prices started to slip at the end of 2008, with the exception of Mountain View, which dropped a couple quarters later. Prices rebounded mid-2009, after cities like Sunnyvale had bottomed out in the beginning of 2009, and have begun to stabilize at a depreciated value. Los Altos, which has the most expensive houses of the four cities*, realized a 20 percent drop from the beginning of 2008 to 2010; Mountain View dropped 17 percent, Palo Alto dropped 11 percent, and Sunnyvale dropped 15 percent.

*Los Altos may have a higher median selling price than Palo Alto, but part of that is the wider range of home prices available in each of the 14 Palo Alto neighborhoods, where the lower-end is selling quickly, and a population that is double the size of Los Altos. (Expect a post covering Palo Alto neighborhoods in the future.)

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Average days on market –

Building up to the crisis, average days on market increased for all four cities until the beginning of 2009. Interestingly, Los Altos and Palo Alto numbers are still increasing today, while Sunnyvale and Mountain numbers are dropping. This may be a result of higher priced homes in Los Altos and Palo Alto that tend to stay on the market longer, especially in a recession, in contrast to the strong demand for the greater supply of low priced entry-level homes in Mountain View and Sunnyvale.