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Prices Still Rising In Orange County

Prices Still Rising In Orange County

Prices continue to show gains for the areas of Newport Beach, Corona Del Mar, Newport Coast and Laguna Beach.  Most areas have surpassed their peak prices that occurred in around 2007.  Will prices continue to rise?  It seems the high end luxury homes have slowed a bit but the inventory still is at low levels.  There have been some high priced sales on the sand and one property in Dana Point just sold for $13,500,000 that was at 31 Beachview Avenue.  So, the summer could be a little slow, but as I tell my buyers, it’s a great time to offer as there is less competition.

 

Why So Many Chinese Buyers in Palo Alto and Along the Peninsula?

Why So Many Chinese Buyers in Palo Alto and Along the Peninsula?

Everybody reads about the large supply of Chinese buyers who are buying homes here along the Peninsula.  There are many agents, one prominent one who we all know and now has a plane to fly his Chinese buyers around, who target the Chinese buyers very heavily.  Buy, why are there so many Chinese buyers and why are they buying here?

We all marvel at the prices being paid and the recent appreciation of 30% per year for the past couple years.  For those of us who live along the Peninsula, you may be surprised to know that real estate in Palo Alto, Atherton and Menlo Park may be a bargain when compared with other international locales. Heck, we aren’t even as expensive as New York.  Who would have thought 10 years ago that an investor from Shanghai might find a Manhattan penthouse affordable? Of the 10 most expensive cities in the world, New York is the only one from the U.S., said a recent report from England-based real estate consultancy Knight Frank and researcher WealthInsight. Monaco, Hong Kong, London, Singapore and Geneva all outranked New York. Sydney, Paris, Moscow and Shanghai rounded out the list. San Francisco, Palo Alto and Atherton, not even on the list.

In Hong Kong, which saw double-digit real estate price increases from 2009 to 2012, the average luxury home was valued at around $11,000 per square foot, the global real estate firm Savills said in a 2012 report. Yes, $11,000 per square foot! London, with its own booming real estate market, averaged $5,300 per square foot, while New York checked in at $4,100. Atherton and Palo Alto generally sells for $1,500  to $2,000 per square foot, quite a deal compared to the big guys.

For the 12 months ended in February, 788 homes worth more than $10 million each were sold in the U.S., according to real estate website Zillow. Slightly more than half were in the Los Angeles and New York areas. San Francisco, south Florida and Colorado ski resorts Aspen and Vail also saw some of the most-expensive transactions. Chinese Buyers, in particular, Chinese homebuyers increasingly are buying up high-end property in the U.S., Realtors said. China’s strong economic growth has generated dozens of billionaires and thousands of millionaires in recent years. They are attracted to America’s stronger property rights and a relatively stable political and economic climate, according to the National Association of Realtors.

So, why are so many Chinese buyers scooping up luxury properties? Because they are rich and prices here are a deal and they have property rights that might be hard to come by in their own country.  Hard to blame them.

With the worldwide economy getting better, I can’t see much of a slowdown to the pace of buying from our overseas friends.  Gary Kurtz of Alain Pinel in Menlo Park has Chinese buyers that he has never met but converse with on a regular basis and are looking for investment homes here in the Atherton area.  I find lots of Atherton and Palo Alto off market homes and I know they will make a relatively quick decision and buy without seeing as they trust my word and insight into the market.  It seems to be a win-win situation for sellers, Chinese buyers, agents and all in the luxury real estate industry.

 

Atherton Now Most Expensive City In USA

Atherton Now Most Expensive City In USA

Yes, it was only a matter of time, but it finally happened.  Forbes declared Atherton’s 94027 as the most expensive zip code in the country. For those of us who live here, we knew this was coming.  Especially since about 40% of sales are off market in Atherton so we think it’s been number one for a while.  Due to the volume of buyers from China, more properties are actually going on to MLS where they can be seen on various websites the Chinese buyers look at.

The median home price is $9.4 million, up from $6.6 from last year.  The first quarter of this year has recorded 7 sales over $10 million dollars  and there are many listed now from 10-50 million dollars (on and off market).

The crazy thing is also that Menlo Park is now moving quickly up the price ranks as well.  Just as an example, today on tour there were 10 new listings all over 2 million dollars and the highest is $5.85 million.  Just last year, Menlo Park was averaging in the $1.6 price range and that is also surging.

Prices across the board are up 30% from last year, so what was unaffordable last year to the average person is even more over the top this year.  There are still multiple bidding wars going on for properties at all price points.  Take for example the property that was on broker tour in Atherton last week for 14 million and is being quoted as being bought sight unseen by a Chinese buyer.  The fact of the matter is that an agent I toured it with actually bought it right after tour and before I could bring my clients by to see it.  I knew it would go fast, but I wasn’t expecting it to go that fast.

Overall, luxury real estate is alive and well and especially along the Peninsula in cities like Atherton, Palo Alto, Menlo Park and Los Altos hills.  There are still more buyers than sellers, but hopefully some more inventory will start to hit soon.  My buyers are getting frustrated!

Palo Alto Housing Inventory Lower Than You Think It Is

February 28, 2013 Real Estate News No Comments
Palo Alto Housing Inventory Lower Than You Think It Is

It’s the end of February, the weather is a bit warmer and all is well in Palo Alto.  All except the housing inventory as the numbers remain unseasonably low.  Broker tour for the city of Palo Alto is on Friday, so that means most agents put their new listings on MLS by early Thursday so their new listing can make it on the Friday broker sheet.  As of today, there are 29 homes for sale in all of Palo Alto, and a total of 8 condo’s.  The average number of sales in a month for Palo Alto is somewhere in the 40’s, depending upon the month.  Knowing that 5 of the 29 have been on the market quite a while and probably not an easy sale, this means that all buyers are after about 24 homes.  But, the real number to look at is to take the inventory of 29 homes and separate them out by price range.  You have 8 homes in the 3 million plus range, 8 in the 2-3 million range, 10 in the 1-2 million dollar range and 3 under a million.

The price range is the true identified of what is out there as most buyers fit into only one of the price ranges.  For example, if you are looking for a home over three million, then you don’t really care to see the homes in the 1-2 range so your inventory is really only the 8 in your range.  So, housing inventory is a very personal number that is always a subset of the big number all the agents talk about.  For most buyers, there are really approximately 8 homes in the Palo Alto housing inventory that they really care about.  This shortage of housing inventory is why prices are going up as I know there are more than 8 buyers out there so it tends to create the situation where a buyer just wants to buy a house and they pick one of the 8 they see as the inventory doesn’t seem to be getting any better.

So, until more people decide to sell, this housing inventory number is much smaller than you think it is.

Atherton Luxury Real Estate Prices on The Rise

January 4, 2013 Real Estate News No Comments
Atherton Luxury Real Estate Prices on The Rise

Home sales and prices of Atherton real estate took a healthy jump for the year 2012 at a slightly above average 12 percent.  Atherton real estate has one of the highest average prices in the country at just over $4.5 million dollars.  So far in 2013, we are seeing a surge in mega priced homes that will be hitting the market soon in the over 50 million dollar range.  Atherton real estate is held by many a VC, CEO and tech giant who might be living behind those closed gates leading to properties well over one acre.

Atherton

2011 2012 % Change
Number of Sales 73 82 12%
Average Price ($000) $4,125 $4,626 12%
Average DOM 78 60 -23%
Months of Inventory 0.2 0.3 50%

Woodside Real Estate Down, All Others Up

January 3, 2013 Real Estate News No Comments
Woodside Real Estate Down, All Others Up

Woodside real estate figures were the only blip on the charts with negative numbers while all other areas of San Mateo County showed gains in real estate prices and sales numbers. Woodside has been stagnant except for a 100 million dollar sale by a Japanese businessman. The huge off market number did not affect the charts as the sale happened off MLS. San Mateo county real estate prices were at a healthy 10% rise across the board.

Portola Valley

2011 2012 % Change
Number of Sales 70 62 -11%
Average Price ($000) $2,256 $2,405 7%
Average DOM 80 68 -15%
Months of Inventory 0.1 0.3 200%

Redwood City

2011 2012 % Change
Number of Sales 535 593 11%
Average Price ($000) $755 $842 12%
Average DOM 72 48 -33%
Months of Inventory 0.1 0.1 0%

Redwood Shores

2011 2012 % Change
Number of Sales 49 72 47%
Average Price ($000) $982 $1,061 8%
Average DOM 30 27 -10%
Months of Inventory 0.1 0.0 -100%

San Carlos

2011 2012 % Change
Number of Sales 278 317 14%
Average Price ($000) $960 $1,072 12%
Average DOM 44 35 -20%
Months of Inventory 0.1 0.0 -100%

San Mateo

2011 2012 % Change
Number of Sales 595 680 14%
Average Price ($000) $807 $871 8%
Average DOM 54 38 -30%
Months of Inventory 0.1 0.0 -100%

Woodside

2011 2012 % Change
Number of Sales 99 83 -16%
Average Price ($000) $2,504 $2,077 -17%
Average DOM 111 85 -23%
Months of Inventory 0.4 0.4 0%

 

 

San Mateo Country Real Estate Sales Up in 2012

January 2, 2013 Real Estate News No Comments

Menlo Park & Atherton Photos_0033Homes sales in San Mateo County took a decent jump in 2012 with the number of sales up 10% for the entire county and the average price was up 7% to almost $995,000.  It’s amazing to think that it’s almost a million dollars to buy an average home anywhere in San Mateo country.

San Mateo County

2011 2012 % Change
Number of Sales 4,646 5,130 10%
Average Price ($000) $932 $995 7%
Average DOM 68 49 -28%
Months of Inventory 0.2 0.1 -50%

Homes For Sale Listing Not Accurate on Popular Online Websites

Homes For Sale Listing Not Accurate on Popular Online Websites

Home buyers and sellers often quote Trulia, Zillow or Redfin as their main source of real estate information. If they are out looking for a home, they check these popular online sites daily to see what’s on the market. All real estate agents know that the information definitely isn’t up to date for homes along the peninsula as there is so much off market activity and it’s kept between agents who work the areas a lot, so the online sites don’t have a clue to what’s really for sale here.

A new report by Redfin proves what we agents have known for a long time – the information on these sites isn’t accurate at all. I personally have received calls about listings that have sold months ago and have grown to find it fairly normal, but I never understood how bad the statistics really are. The study found that approximately 36 percent of the listings on the websites were no longer active.

Wow, 36%!

That’s a big margin of error. Do they do it so they can keep potential buyers and sellers on their sites longer and sell more page views and advertisements? Do they do it because there is a shortage of inventory in many areas and they don’t want to look like there isn’t enough information to keep home searchers happy? I’m not sure what the reason, but read the full article here.

This gets back to a plug for using a local real estate agent who has the latest information plus the off market listings.  I would estimate 20-30% of the business in this area if done off market, so if you really want to find a house, call a reputable agent.  I can help you with your real estate needs in areas such as Menlo Park, Palo Alto, Atherton and surrounding areas.  There are also plenty of other good agents as well who are professionals and take their jobs very seriously.  Working with clients to buy and sell luxury real estate is a demanding job as there are high stakes and very successful buyers and sellers who only accept the best agents to handle their transactions.  Relying on these websites seems like a step in the wrong direction and in an area of intelligent, successful people, this isn’t always the smartest choice.

Palo Alto Off Market Sales, Why Are They Increasing?

Palo Alto Off Market Sales, Why Are They Increasing?

As you all know, off market sales are increasing in all cities along the Peninsula and especially in areas such as Menlo Park, Palo Alto, Atherton, Los Altos and Los Altos Hills.  There are many reasons and each seller and agent might have a different opinion on why they want to choose to sell their home off market instead of thru the MLS.  One reason that is being discussed frequently is the surge in popularity with the IDX sites, such as Trulia, Zillow, Red Fin etc.  Many agents are choosing not to syndicate their listings or even keep the home off market because of how those sites operate.  They are very informative for the consumer and have great information, however, the downside is that they are using our listings to sell advertising.  They are making millions of dollars off of agents advertising and hard work, while the agents typically don’t get anything in return.  It would be great to see some statistics on how many people actually buy a house because they saw it on Zillow or Trulia, but those statistics don’t exist.  So, the thinking is that 99% of the people who visit the sites aren’t making a purchase based on seeing the home on the site, but typically get the info from their agent.

Many agents don’t like it because the online sites charge other agents to put their picture/ad next to our listing so the consumer believes the advertised agent is really the listing agent.  So, agents who do a lot of business and get high end listings don’t always want somebody else’s picture next to their multi million dollar listing, so they are choosing to keep the home off market.

Is this the reason for the surge in off market listings in the area?  Who knows, but it’s one reason that the IDX sites are the center of discussion as the various MLS’s are hearing complaints from their members and the MLS’s are losing control of their listing data.  The future of these sights are unknown, but anybody who goes on them quite a bit also knows the information they provide is not always accurate nor up to date.  The only place buyers can get the real information is from their real estate agents, and that won’t change no matter what happens to the popularity of the online sites.  Do you use the various sites and have you ever made a purchase based on seeing it on Trulia or Zillow?

 

Menlo Park Real Estate Prices Jump

Menlo Park Real Estate Prices Jump

Menlo Park

As reported in Bloomberg Businessweek, prices in Menlo Park are rising as inventory remains small.  The rest of the nation is tuning in on what is happening in our bubble of the world.

Here is an excerpt from the article which as published today.  Facebook Inc. (FB) (FB)’s Silicon Valley (MXWO0IT) hometown has a limited supply of real estate available for its newly minted millionaires as sellers await further price gains in a market buoyed by growing wealth from technology businesses.

Home listings in Menlo Park, California, a leafy town about 30 miles (48 kilometers) south of San Francisco, fell 9 percent in the year through April compared with the same time in 2011, data from MLS Listings Inc. show. The number of new properties coming to the market decreased for the eighth time in 12 months.

The initial public offering of the world’s biggest social network, which raised $16 billion on May 17, is contributing to surging real estate demand in Silicon Valley’s tech enclaves and bolstering values amid scarce inventory. The median price of a home sold in Menlo Park jumped 8.5 percent to $1.19 million in the first quarter, according to research firm DataQuick.

“The market was already hot, and now there’s more pent-up demand,” said Jim Harrison, chief executive officer of MLS Listings, a Sunnyvale, California-based publisher of home listings for San Mateo and Santa Clara counties in the heart of the Valley. “Buyers are going nuts, but sellers are holding back.”

Facebook, which has fallen (FB) 22 percent since its IPO, is only one factor fueling wealth creation, said Michael Dreyfus, founder of Dreyfus Properties, a brokerage with offices in Menlo Park and the neighboring city of Palo Alto. Hiring at Apple Inc. and Google Inc., as well as law and finance firms, has yielded a “very broad-based and healthy” surge in real estate, he said on Bloomberg Television’s ’’Bottom Line’’ on May 23.

‘Savvy’ Sellers
A “savvy bunch of sellers” has purposely kept their homes off the market in desirable areas in anticipation of the IPO, Dreyfus said. Listings haven’t been this scarce at this time of year since 2005, when house prices neared peak values, said Theresa Dreike, an MLS Listings spokeswoman.

“With so many people looking and so few homes available, the market is squeezed and sellers can get whatever they want,” said Stephanie Seeger, 39. She and her husband bid $86,000 over the asking price to win a four-bedroom home with about 2,300 square feet (214 square meters) in Menlo Park’s Willows neighborhood. The $1.88 million purchase is scheduled to close today, she said.

Across the U.S., a scarcity of homes for sale is boosting property values, from foreclosure-stricken Florida and Arizona to more robust markets in Texas and coastal California. Home listings totaled 2.54 million in April, the lowest for the month since 2005, according to National Association of Realtors.

Waiting It Out
In hard-hit areas, people who owe more than their homes are worth, known as negative equity, are crimping supply by refusing to unload their property at a loss, said Stan Humphries, chief economist of Seattle-based real estate service Zillow Inc. Sellers in Silicon Valley, on the other hand, are motivated by maximizing price and can afford to wait as job growth and the economy improve, he said.

Home values in the U.S. should be “modestly stronger” by the end of the year, rising about 3 percent, Barclays Plc analysts in New York said in a May 23 note. All nine regions in a Federal Housing Finance Agency housing index showed price gains in March. The gauge climbed 2.7 percent from a year earlier, the biggest increase since November 2006.

“You’ve got a lot of people with negative equity who want to sell but can’t, and people in affluent areas choosing not to sell,” Humphries said in an interview. “A pattern of materially stronger demand is emerging, but there’s a big constraint on supply.”

Cupertino, Palo Alto
In Cupertino, home to Apple (AAPL) (AAPL), inventory this year through April fell 15 percent, and new listings dropped for the 10th time in 12 months, MLS Listings said. Prices climbed 2 percent in the first quarter from a year earlier to $1.1 million, according to San Diego-based DataQuick. In Facebook’s former home of Palo Alto, adjacent to Stanford University, new listings declined for the 11th month, and prices jumped 22 percent to $1.6 million.

Facebook announced in February 2011 that it would move to an empty Menlo Park office campus in a lease deal that was the area’s largest in 20 years. The 1 million-square-foot complex, dubbed 10 Hacker Way, was followed by a $250 million renovation that’s still under way. About 2,400 employees work there.

This article shows that luxury real estate is alive and well in the area.  Even thought the Facebook IPO has not gone as expected, many Facebookers cashed out some of their shares before the IPO and still made their money, while another group has to wait 6 months to sell, and hopefully the price will have rebounded by then.

 

My Contact Information

Gary Kurtz
949.565.5201
gkurtz@homgroup.com
BRE# 01710776

Kathy Kurtz
714.394.2676
kathyk213@aol.com
BRE# 01876966

HOM Sotheby's International Realty
1200 Newport Center Drive, # 100
Newport Beach, CA 92660

949.565.5201 (cell)
949.478.7769 (office)
650.796.5507 (Silicon Valley #)

Contact me now with any questions:
gkurtz@homgroup.com

Kurtz Real Estate Group




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Menlo Park Monthly Real Estate Sales Figures for October 2011

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Prices Still Rising In Orange County

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Why So Many Chinese Buyers in Palo Alto and Along the Peninsula?

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Why So Many Chinese Buyers in Palo Alto and Along the Peninsula?

Everybody reads about the large supply of Chinese buyers who are buying homes here along the Peninsula.  There are many agents, one prominent one who we all know and now has a plane to fly his Chinese buyers around, who target the Chinese buyers very heavily.  Buy, why are there so many Chinese buyers and […]