Menlo Park Real Estate Update – Statistics for September 2011

A short video that shows the important real estate statistics for Menlo Park sales figures for the month of September, 2011 compared to September 2010. This is a good indicator on how the real estate market for Menlo Park is doing and helps buyers and sellers determine timing for buying or listing a home for sale.

Central Menlo Leads Sales Volume By Large Margin in Menlo Park

The Central Menlo area showed the most total sales volume by dollar amount compared to other areas of Menlo Park by quite a large margin. There was just over $122 million dollars in total sales for the last twelve month period. The results are based on 390 total sales for all of Menlo Park and 62 sales were posted in the Central Menlo area. Coming in second for amount of units sold was actually the east of 101 area of Menlo Park, however, the home sales prices are dramatically different than Central Menlo and the reason for the vast dollar amount difference. Luxury real estate sales are still strong as Central Menlo had an average sales price of just under two million dollars.

Area: Dollar Volume: Number of Sales
Central Menlo: $122,821,516: 62
County / Alameda Area: $67,163,500: 44
Allied Arts / Downtown: $50,725,625: 34
Willows / O’Conner Area: $47,499,890: 43
Menlo Oaks Area: $41,449,100: 21
Sharon Heights / Stanford: $35,012,600: 18
Middlefield to El Camino: $33,717,910: 28
County Area / Fair Oaks Ave: $24,399,875: 36
Flood Park Area: $24,246,275: 29
East of U.S. 101: $18,110,811: 61
Felton Gables: $9,250,000: 4
Alpine Road Area: $6,006,000: 6

Palo Alto Real Estate Takes a Breath

Palo Alto real estate is still hopping, however, the market has been cooling off a bit in recent weeks, as more homes are available and demand is less. Some prices even moved a bit lower as a result. Expect this trend to continue as more inventory hits the market.  Palo Alto has a lot of luxury real estate and is always an area in demand due to the tech executives and companies that call Palo Alto home.  In our recent reports, the median price in Palo Alto 94301 is $1,597,000 and average days on market is only 61 days.  Just a couple weeks ago, the median price was over $2.1 million so this shows the inventory in that sweet spot is fairly non existent.   The surprising number this week is the percentage of homes with a price decrease, which is 35%.  That’s a big number for such a strong area.  This means that the “in demand” homes have sold quickly and it’s probably the less desirable properties that are still sitting on the market.  It’s still a sellers market in Palo Alto and the average price per square foot is at $934 and I’ve seen homes that are asking way over that price per square foot, but are tending to sit if they go over $1,000.

Menlo Park Real Estate Market Update

The median list price home in Menlo Park this week is $1,098,500.

Inventory has been lightening lately and the Market Action Index
has been trending up. Though days-on-market is increasing, these
are mildly positive indications for the market.

Supply and Demand

Home sales have been exceeding new inventory for several weeks.
While still a Buyer’s market, prices seem to have responded by
moving upward. If the demand trends continue, expect prices to
keep marching upward, especially once we see a Seller’s Market.

Market Action Index: 19 (strong buyer)
Index above 30 implies Seller’s Market conditions. Below 30, conditions favor the buyer.

Real-Time Market Profile Trend
Median List Price $ 1,098,500
Median Lot Size  6500 SF
Average Days on Market (DOM) 97
4,501Median House Size (sq ft) 1690
Median Number of Bedrooms: 3
Asking Price Per Square Foot $636

Despite this week’s down tic, price trends have generally been
moving up lately. Prices are below the market’s high point, and
so watch the Market Action Index as an indicator of how long this
trend will last.

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%

Atherton Sales Prices Stay Strong Despite Drop In Sales Volume

Sales prices in Atherton of luxury real estate stayed strong in the 3rd quarter of 2010 compared to the 3rd quarter of 2009.  Despite the economy and general gloom and doom news, it was surprising to see the prices jump for the Atherton real estate market.  Prices increased while the number of sales took a big dive, dropping almost 40%.  Since the inventory levels also took a huge increase, this means that the inventory is there, but buyers are being very selective.

Realtors and home sellers are hoping for an end of the year surge in sales.  The best case scenario for a buyer is in place due to the high amount of inventory on hand.  Atherton real estate was just named by the Wall Street Journal as the second priciest area in the country, coming in only behind an area of New York.  So, in essence, real estate in Atherton is the most expensive on the west coast.

Atherton                            Q3 2009         Q3 2010               Change

# of Sales                                  26                        16                       -38%

Avg Price (000)                   $ 3,424              $ 3,972                  16%

Avg DOM                                  94                         64                      -32%

Months of Inv.                     3.2                         13.3                    316%

Real Estate Statistics for Peninsula Looking Up!

The new second quarter statistics are in and looking pretty good.  Below are some numbers for some communities in San Mateo County. I’ll continue to make other posts for other cities in San Mateo County as well as Santa Clara County over the coming days.

Atherton real estate showed a number of sales increase by 25%, while prices on these primarily luxury homes were down only 3%. The average days on market took a big dip (which is good for sellers) as it was down 44%, which means that buyers were out in force and looking to purchase a home instead of sitting on the fence.

Menlo Park real estate also showed some gains as sales were up and prices were up.  The gains were small, but it shows that Menlo Park luxury real estate is still a viable option for buyers.  I say luxury real estate as prices are over a million dollars, even though they are quite significantly lower than the luxury homes of Atherton, which average out at almost $3.7 million dollars per home.

More statistics to come, but here is a start

Community                           Q2 2009           Q2 2010           % Change

San Mateo County
# of Sales                                 1,017                    1,178                   16%
Average Price ($000)              $897                     $964                      7%
Avg Days on Market                69                           55                  -20%
Months of Inventory                    3.1                          3.6                    16%

Atherton
# of Sales                                     16                            20                    25%
Average Price ($000)         $3,788                $3,672                     -3%
Average DOM                           116                         65                    -44%
Months of Inventory                    8.0                       5.6                     -30%

Menlo Park
# of Sales                                     95                        101                        6%
Average Price ($000)         $1,324                 $1,343                        1%
Average DOM                            55                          44                    -20%
Months of Inventory                   2.2                         2.3                        5%

Redwood City
# of Sales                                     109                        151                      39%
Average Price ($000)             $744                    $804                        8%
Average DOM                               52                         49                       -6%
Months of Inventory                   3.4                         3.0                     -12%

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.

1st Quarter Sales Figures In: Looking Good!

As expected,  sales figures for San Mateo and Santa Clara Counties for the first quarter of 2010 compared to the first quarter of 2009 were up in all major areas.  This is a good start to showing that the deadly silence of real estate activity in 2009 is behind us and people are optimistic about buying and selling homes again.  It doesn’t mean that the entire country is real estate happy again, it just means that our neck of the woods is taking positive steps in the right direction.  Here are the numbers.

Santa Clara County

# of Sales*                                 1,965          2,177           11%

Average Price ($000)*             $575           $711           24%

Avg Days on Market (DOM)**   104                   63          -39%

Months of Inventory**                 5.7              2.6           -54%

San Mateo County
# of Sales*                                   624                 769            23%

Average Price ($000)*             $745              $913            23%

Avg Days on Market (DOM)**      84                   54           -36%

Months of Inventory**                 6.1                  3.8           -38%

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.