High End Homes on Peninsula are selling.

In case you missed it, here is an excerpt from a recent article about the high end housing here on the Peninsula and how well it is selling.  Los Altos Hills  has had the big sale while Palo Alto is consistent and almost a sellers market.  Atherton and Menlo Park and moving along nicely with Atherton getting the high end sales.

Mark Zuckerberg buys in Palo Alto!

Mark Zuckerberg's New Home

Well, it’s only fitting that Mark Zuckerberg finally buys a house in Palo Alto.  After all, he has made billions of dollars while starting his company in Palo Alto, he might as well officially call it home and buy where he works.  Soon, he will be working in Menlo Park, but Palo Alto has the claim to fame on tech exec’s homes.

The king of Facebook’s home was purchases for just around $7.0 million dollars and the Palo Alto luxury real estate market continues to improve with this sale.  The house is nice, and within close proximity to his work and in a neighborhood where he won’t be bothered as the town is full of tech kings.  Let’s see how long he lives in it or if he calls this home his main residence, after all, a guy like him might just buy the house to keep the press/news world looking in one direction while he secretly buys a much bigger house somewhere else.

Here are some pictures of Zuckerberg’s home, it is very “Palo Alto ish” and nice.  If he wants to buy in Atherton, I have the perfect $6.9 million dollar home listed that he might want to look at due to the size, privacy and great yard for parties or hanging around the pool with the Facebook family.

Call me Mark!

Palo Alto Million Dollar Condo On The Market

Check out my listing for a condo in downtown Palo Alto that is just a block away from University Avenue and the great restaurants and shops that people love. It’s just under 1800 square feet, single level and is located in a security building. If you want to know more about it or are looking for other homes in the area, please give me a call.

Palo Alto Home Sales Stay Strong

Home sales in Palo Alto for the 3rd quarter in 2010 remained up compared to the same time period in 2009. The total number of homes sold as well as the prices were up a strong 10%.  When you combine that with the numbers showing the average days on market for the sale of a home in Palo Alto were down 15%, you have the feeling that inventory is still moving and buyers still want to be in this beautiful city.  The leaves are falling and temperatures are cooling, but the real estate market is staying on the hot side as multiple offers are still happening.  Let’s hope for a good final quarter of the year.

Palo Alto                              3rd Q/09                             3rd Q/10                        Change
# of Sales                                 105                                        116                                  10%
Average Price ($000)    $1,463                               $1,616                                10%
Average DOM                         59                                         50                                   -15%

The Rich Are Defaulting On Mortgages At Alarming Rate

Don’t look around at your neighbors too closely, but the well-off are losing their master suites and saying goodbye to their wine cellars.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population according to David Streitfeld.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to the real estate analytics firm CoreLogic. Homes priced over a million dollars are considered luxury real estate in many areas.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

As a recent example, five luxury properties in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.

Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”

In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.

“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”

The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.

Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.

At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.

At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.

Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.

The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent.

With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.

“Those with high net worth have other resources to lean on if they get in trouble,” said Mr. Khater, the analyst. “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”

Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006.

“I just decided to let it go, give it back to the bank,” he told the celebrity gossip TV show “TMZ.” “I just didn’t feel like it was a good investment.”

The rich and successful often treat their homes as business investments and make decisions on their personal items in a similar way that they would for their businesses.  Bottom line decisions without the emotion that other homeowners may have towards their residences.  A default is a strategic default, not a failure.

“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” Mr. White said.

The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process.

In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick.

In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up approximately 10% over 2009 and over 400% from 2008.

The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two.

The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. Many of the luxury real estate areas have downtown areas that are filled with empty storefronts, typically unusual in well to do areas.  Discretionary spending of the rich is affecting the little guys, who of course have mortgages to pay, thus the vicious circle.

But this is still Silicon Valley, where failure can always be considered a prelude to success.

In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing.

His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called “the global meltdown,” the man, a technology entrepreneur, said he quit making his $9,000 monthly payments.

“I’m going to be downsizing,” he said.

The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. “I’m a businessman,” he explained. “I have to be upbeat.”

Things seem to be turning a bit as some areas are showing nice price increases and we all have to stay upbeat and fight to keep on top, irregardless of whether you are looking to buy or sell off your luxury real estate.  If things don’t look great, just look around at your neighborhood, you’re not alone.

Palo Alto Home Sales = Multiple Offers

Every week, we have staff meetings to discuss listings, sales etc. and we are seeing a change in the market that I thought would be interesting to pass along to all of you.  I know you’ve seen me write for the past couple of months that the published stats will start to support what I am seeing on the market.  Here is an example of just one segment of the market as reported in last weeks meeting, and this is only from Alain Pinel.

1. 5 offers received on 2553 Emerson street in Midtown Palo Alto with 3 bedroom, 2 bath, 1784 sf.  Listed at $1,398,000 and went  pending within a week on the market. Top offers went over $1.5M.

2. 4 offers on 2671 Emerson with 4 bedroom, 2 bath listed at $1,648,000, sold to an all cash buyer. No contingency, as is, quick close clean offer.

3. 6 offers on 3250 Murry way with 3 bedroom, 2.5 bath 1548sf, listed at $1,098,000 sold within a weeks.

4. All cash buyer bought 2340 Dartmouth house for its tear down value and will rebuild it. It was listed at $1,295,000 last year. Sold off the market.

5. Approx. 3 offers on 3715 Whitsell with 3 bedrooms, 1 bath listed at $895,000.

6. One all cash offer was received on 3145 Emerson new construction house. Seller rejected the low ball offer.

7. Multiple interested parties are taking disclosure packages for 601 Matadero.  Multiple offers to follow.

The same thing is happening in Menlo Park, Atherton and areas along the Peninsula.

Market Focus: South Palo Alto

December and January were very slow – for two months the Palo Alto housing market was in a dormant state. Only six homes have changed hands since the beginning of the year in South Palo Alto. A year ago at this time, many homes were languishing on the market as buyers stayed on the sidelines, worrying about their jobs, the sharp decline in their 401k accounts, and whether housing prices would ever rise again.

While no one claims the housing market is out of the woods yet, an unusual dynamic is occurring in many communities around the Bay Area and in our own backyard. Buyers and sellers have realized that neither of them will benefit from rising interest rates, and now we have a market with rising inventory and many active, well-qualified buyers looking for houses. Open houses are very busy. Most of this year’s sales happened within the last two weeks. Today when we write this article, there are 19 pending sales in South Palo Alto and 21 active listings. Well-maintained, reasonably priced homes in the median price point or lower, sell with multiple offers. One recent sale generated 13.

South Palo Alto is on the lower range of the overall Palo Alto housing market, and today it gets a disproportionate level of activity comparing with the rest of the city. In the entire city of Palo Alto there are 36 “pending sales” and more than half of them (19 as mentioned above) are in South Palo Alto.

There are a lot of areas in all price ranges here in the SF Bay Area and that’s what makes this such an interesting real estate market.

Million Dollar Homes Sales Drop in California

The number of California homes that sold for $1 million-plus declined for the fourth consecutive year in 2009, the result of buyer reticence, a difficult mortgage market and several years of price drops that tugged the value of many homes below the million-dollar threshold, a real estate information service reported.

A total of 18,621 Golden State homes sold for a million dollars or more last year. That was down 23.8 percent from 24,436 in 2008. In 2007 it was 42,506; in 2006 it was 50,010; and in 2005 it peaked at 54,773. Last year was the lowest sales count since 2002, when 15,703 were sold, according to San Diego-based MDA DataQuick.

Total California home sales – including all price levels -increased 16.9 percent last year, to 460,166 from 393,703 in 2008. One in 25 homes sold for a million dollars or more last year, while the year before it was one in 16, and in 2006 it was one in nine.

“Prestige home sales are a unique sub-category of the real estate market. The buyers and sellers respond to a different set of motivations. In the multi-million-dollar price ranges, decisions are largely discretionary and aren’t as dependent upon jobs, prices and interest rates the way they are for most buyers and sellers,” said John Walsh, DataQuick president.

“Traditional million-dollar markets are holding up relatively well, while expensive markets that emerged four or five years ago are not,” he said. That puts Menlo Park real estate, Atherton luxury homes, Palo Alto mansions, Los Altos Hills real estate and other SF Peninsula real estate in a decent position.

Million-dollar home sales in Riverside County dropped 48.6 percent last year, while they dropped 13.3 percent in Los Angeles County.

Statewide, there were 332 sales for more than $5 million last year, 228 sales were in the $4-$5 million range, 590 in the $3 million range, 1,902 sales in the $2 million range, and the rest – 83 percent – between $1 million and $2 million.

About 1,900 of the homes that sold statewide last year for less than $1 million had previously sold for $1 million or more. The median date of the prior sale was April 2006; the median price decline between the 2009 sale and the previously $1 million-plus sale was about $420,000. The median percentage decline was about 35 percent.

Palo Alto Luxury Real Estate…on Tour Today

The Palo Alto Egg

It took until the 15th of January, but today there was actually a decent amount of Palo Alto real estate on the market to preview.  The first couple weeks of the year are usually slow and not many homes to view on broker tour or at open houses.  So, it’s exciting to get a  feeling that activity is starting up again and agents and sellers are out there again showing their wares.

I visited a couple of great surprise homes.  When I say surprise, I mean that from the outside I was thinking the house would be fairly average, but when you get inside, the surprise is in the size and quality of the home.  A home on Park Blvd. was the house of the day for me.  Check it out by clicking here. It’s been entirely remodeled and even has a nice screening room.   It’s listed by Alexandra Vondergroeben of the Sereno Group, call me and  I can help out if you are a buyer that is not working with an agent.

I saw a couple of homes that I know will come down in price, but I won’t list those here.   Overall, the prices out there are fairly consistent and in line with where the market is, not where it will be by spring (which will probably be higher in my opinion).

Palo Alto Luxury real estate is back on the rise.  There are a good number of homes for sale and some condos for sale that are reasonably priced.

Palo Alto Mansion

Today was a day looking at some homes for sale in Palo Alto, California.  I was pleasantly surprised by some great homes that I found today, some classic mansions and some with unbelievable views.  Palo Alto is known for it’s oak tree lined quaint streets with mansions stacked up side by side.  Some are classic old mansions and some are new and totally renovated and have a contemporary feel.  One mansion today was a classic style that had upgrades, but at the same time you could feel the history of the house.  Situated on a little over half acre, the grounds are lush with a pool, rose gardens and lots of large trees and beautiful grass areas.

The house seems to go on forever as room after room is discovered on a walkthru of the upstairs.  Bedroom leads to another bedroom or workout room and you get the feeling you could easily get lost from the rest of the people in the house by finding a room off a room to hang out in.  Even for a large family, I can’t see this house ever feeling crowded. Palo Alto Luxury real estate is alive and well.

The living room, family room, dining room and “piano room” all have large picture windows that view out to the picturesque backyard giving a feeling of living in your own private world.