Mountain View was one of the last markets to get hit during the meltdown of the economy. It had held strong through 2008 as buyers continued to focus on good schools and reasonable prices with close proximity to major employers, particularly those in the tech space. A fairly balanced inventory and prices kept the market over $1.067 million in 2008. However, in 2009 prices dropped substantially with a final average of $945,000. What's interesting is that sales actually rose, increasing about 2% of 2008. Sales continued to rise in 2010 with a slight drop in 2011. Part of the strong sales figures has been that there are many affordable condos and townhouses in Mountain View - many priced in the $100,000-300,000 range. With good quality schools, that made the area appealing for both buyers and investors.
The trend on average selling price didn't so quite as well with prices rising slightly in 2010, up about 1% to $954,000. The story in 2010 was one of a glut of property and with so many choices, buyers had command of deals. In the strongest neighborhoods, things remained fairly balanced (Cuesta Park, Varsity Park, Waverly Park, etc) but lesser neighborhoods had plenty of inventory and nothing to drive them up.
That changed in 2010 as inventors snapped up most of what was available and inventory become more limited. That trend carried over into 2011 where homes that had languished on the market for many months or years eventually sold. There were a couple of homes on the market in Waverly Park that seemed to take forever (very close to Hwy 85). Those last few "bargains" held the average selling price gains down in 2011 but the overall figure still rose to break $1M for the first time in 3 years.
The trend in 2012 is continued strength with substantial price increases. Multiple offers are much more common and top neighborhoods are seeing prices 5-10% over asking prices in some situations. Based on the shortage of inventory and evidence of sales so far this year, I expect we'll see the Mountain View real estate market for single-family homes rise at least 5% with prices approaching their peak from 2007.
Saratoga has had a rough time since the real estate meltdown with steep declines in prices, particularly high-end homes, since the market started to crash in 2007. In 2007 the market peaked with an average selling price of $1,852,777. In 2008 that dropped to just over $1.8 million then to $1,550,000 in 2009. While it appears that is a drop of less than 20%, the reality is that the high-end saw prices drop much more. The trend for high-end homes was 30-40% discounts from their end-of-2007 highs. Buyers were basically calling all the shots.
The number of closed sales dropped substantially as well while inventory continued to rise. That's the key issue in the Saratoga market from 2008-2011, inventory was very high. Where some luxury markets saw inventory taken off teh market, Saratoga had significant inventory for a long time. This is because there was substantial speculative inventory and entry-level luxury buyers to extended themselves and couldn't hang onto their homes. In 2008 there were 239 single-family homes sold. That dropped to 230 in 2009 but rose nicely in 2010 to 288 homes sold. Last year is was 275.
The average selling price has continued to rise or hold fairly steady since 2010. That's when the general market recovery started. However, the excessive inventory has been an ongoing issue. With lots of choices, prices aren't rising as they are in other luxury markets like Los Altos Hills. However, with inventory available and better overall value and price apprciation potential in other markets, the recovery is still slow in Saratoga. The trend so far this year is for a decent number of homes sold and at slightly increasing sales prices. Sales prices are already rising as buyers scramble for good homes in good locations. The trend so far in 2012 is:
This place is spectacular! Do you like really good, gourmet-quality pizza? Then this is the place for you. My wife and I came here on Tuesday night and were blown away by the quality of the food. We started with a couple of beers and because it was Happy Hour, the prices were incredibly low. I got a great draft, hand-crafted brew for $2.50 and it was served in a couple of minutes - very fast service at this place. We opted to order their meatball appetizer and a large pizza with artichokes, pepperoni, mushrooms, and fresh tomatoes. That's our "benchmark" pizza whenever we try a new place.
The meatballs were incredible! Hand-made and seasoned to perfection. They're baked with a cheese topping and served hot out of the oven. We couldn't get enough of 'em! Our pizza came out promptly after and it was among the best we've ever had - and we've been to a lot of epic pizza places. The dough was perfectly cooked (we opted for thin crust), the sauce was tangy and vibrant, and the toppings were the perfect combination of fresh and plentiful (but not too much). It's artistry in a pizza pie!
Service was excellent and timely. But that's not where the story ends.
We came back on Saturday at lunch. The restaurant was much busier and lively. This time we opted to try their garlic bread, more meatballs, and a large caeser salad. WOW! These guys know how to make a salad. The lettuce was cool and crisp like I'd make at home, but even better. The dressing and croutons are all made right on side, from scratch, and you could tell. The croutons were slightly crisp, a little springy inside, and absolutely perfect. I've been in 5-star restaurants and these are on par.
The garlic bread is baked with a cheesy layer on top and pre-baked garlic. It's got a bold flavor and is almost as addictive as the meatballs.
Prices are reasonable, service is great, and the food it brilliant. Stop by and try Blue Line Pizza. You'll be glad you did.
Home sales in Los Altos Hills got so bad at one point that there were no sales at all for months. As one of the top 3 luxury markets in the country, it was the perfect example of how escalating prices from the dotcom era resulted in a crash in values and sales. The market actually got soft starting in 2007 but did well going into 2008. However, after that prices drop substantially and sales were fairly low.
In 2009, the market took it's biggest hit with sales actually up about 10% but prices dropping nearly 10%. The super high-end homes were almost not selling at all and buyers were constantly looking for bargains. Other nearby luxury markets such as Atherton and Saratoga also took hits on average sales prices. The bottom occurred in 2010 when the average selling price dropped to $2,590,417, down from the high in 2008 of $2,889,133. The real story is that there were almost zero high-end sales. Most of what was selling was heavily discounted homes. In fact, I sold a new construction home with over 5000sf for $2.65 million that year that had dropped in price from close to $5 million. Buyers assumed discounts were 20-30% in Los Altos Hills. Until late 2010...
In the late Fall of 2010, the market suddenly perked up. Homes priced at the high-end started getting activity and sales, which had languished for much of the year, were really moving. Well priced, well located homes would come on the market and sell relatively quickly. A total of 81 homes sold in 2010 - many in Q4. This continued into 2011 with 100 sales of single-family homes and the market snapping back about 5%. The declining trend had halted and was definitely on the upswing. More importantly, the ultra high-end market was strong. With a $100 million home sold and many others in the $5-10 million range selling, demand was high.
As we continue into 2012, the market is still strong with demand for new homes as good as we've seen in years. Many buyers are looking for land to build on and homes up to $5 million have several buyers interested. Anything priced under $3 million in a good location will sell. While total sales are a bit light, sales prices are up and I expect this trend to continue for the next several months. Based on what properties are pending and what has already sold, it's very realistic to project average selling prices to return to their 2008 highs and possibly go beyond.
The Los Altos real estate market last peaked in 2008 and dropped substantially in 2009. At the time, the market was driven by fear and uncertainty. Sales were still strong, from a units perspective, but the prices had dropped. This was driven mostly by a nearly complete absence of high-end sales. The homes that sold were, for the most part, the bargains. Inventory levels were fairly high as people who had to sell did.
I remember conversations with agents in 2009 and 2010 where many felt they had no idea the bottom would come. As you can see from the chart below, the bottom was clearly in 2009. The interesting thing was that consumers (many asking questions on Trulia and Zillow) made it clear that based on "paired sales", the market was still declining or likely to decline. At the time, I pointed out the flaws in the paired sales analytic approach. There were those who said I was crazy because that analysis is the basis for "Case-Shiller". Again, look at the chart, the markets rose.
Why did prices rise even in the face of market uncertainty? Very simply, it's a matter of supply and demand. The economy bottomed in 2009 and the recover picked up steam in mid-2010. Since Los Altos is a high-demand town (just as Palo Alto is) with top schools and nice neighborhoods, buyers came back. What you don't see in the chart is that sales of high-end homes really came around at the end of 2010. Those sales were the basis for much of the increase in the "average sales price".
Going into 2011, the level of inventory was relatively low and pent-up demand created a fervor in the spring unlike anything seen since the 2005 boom market. More importantly, the extreme high-end (homes in the $3+ million range) got much more action and that continued to pull up the low end. What made things worse was the fact that many homes were selling with 6-10 offers with many from all-cash buyers. That dried up a bit when the national economy was holding it's breath in August 2011. The loss of Fannie and Freddie loans up to $729K made people wonder if the rest of the markets would have an issue. That lasted about a month.
Now, as we're going through 2012, the trend is still to see slow and steady gains in sales prices. I expect this will continue based on current activity. Last year prices rose about 4.9%. I expect this year we'll see about the same, perhaps a little higher.
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Whether you are buying or selling a home in Los Altos, Los Altos Hills, Palo Alto, Mountain View, Cupertino, Saratoga or Atherton, you can count on my expertise to get the job done.
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