Home Buying in Palo Alto>Question Details

Newfamily, Home Buyer in Palo Alto, CA

Price of 424 Homer Ave, Palo Alto?

Asked by Newfamily, Palo Alto, CA Sun Nov 17, 2013

Hello, i'd appreciate input on 424 Homer Ave? What explains the multiple $ decreases? And is there a garage or not (I thought every PA house had to have at least one). Thank in advance.

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Juliana Lee’s answer
Often a homeowner wants to "test the waters" and will not listen to the advice given to them. Perhaps they were in no hurry to sell but thought there might be one buyer who the house is perfect for and would pay a premium price. Seldom will there be any significant public information about what is done to sell a house or why.

The general rule is that Palo Alto requires one covered parking space for new homes. Homer is on what would be considered a sub-standard lot (there are quite a few in Palo Alto) meaning it is too small to meet current zoning goals. Generally building plans for a sub-standard lot are individually reviewed. They typically do not conform to current zoning goals.

As you mention 2025 Santa Cruz is a very different property and will appeal to very different buyers. If you look at cost per sq ft. you will see that Palo Alto is on average more expensive than Menlo Park.
http://julianalee.com/menlo-park/menlo-park-statistics.htm
http://julianalee.com/palo-alto/palo-alto-statistics.htm

Both Palo Alto and Menlo Park are very desirable cities. Palo Alto has a reputation for higher rated schools and tends to attract different buyers. Even though the two cities are next to each other, they are in different counties.
Web Reference: http://julianalee.com
0 votes Thank Flag Link Wed Nov 20, 2013
The decrease in price is because of no demand for the product. Something about it whether it just being the price is too high is not attracting buyers.

Alex Greer
Loan Officer
NMLS #1056079
http://www.TheMortgageOutlet.com

408-352-5147
AGreer@TheMortgageOutlet.com
0 votes Thank Flag Link Mon Nov 18, 2013
NewFamily,

Thought you might find the following of interest.

The average value per sqft for similar homes that have sold the past 12mo in Menlo Park/Palo Alto

http://s6.postimg.org/kherq5m1d/2mil_dollar_per_sq_ft_last_1…

The sales price as compared to list price for the last 12mo. In otherwords did Seller on average get more or less than they asked for a home they put on the market? and is there any seasonal variation?

http://s6.postimg.org/mxgl40441/2mil_DOM_vs_Sale_to_List_pri…

Let' talk more about the implications of the above information and what it might imply relative to your situation.

Hire the Best! The right Realtor can make all the difference.

Stu Carson
"Luxury and Country" Team Leader
Keller Williams Realty
408-209-0849
Stu@StuCarson.com
0 votes Thank Flag Link Sun Nov 17, 2013
NewFamily,

OK! First of all I'd like to congratulate you for wanting to better understand the variables and the causes of them when looking to invest $2mil+ in a home!

As is often the case, deeper analysis can reveal more reasons for the variances than a cursory analysis or a opinion. I like to say "everyone has an opinion... show me the facts please". You wouldn't respect, hire or feel comfortable with a surgeon that wanted to do heart surgery and did run lab rest, take image scans, etc... to as much as possible understand "what's up!".

I've begun to do some analysis for you in order to answer your questions and perhaps some factors that hadn't been considered. That analysis is summarized in this google doc "My Drive" spreadsheet which you should be able to access by clicking here https://docs.google.com/spreadsheet/ccc?key=0AjiHoKj4ywq7dF9…
if not, email me Stu@StuCarson.com and I will send you a pdf version.

It shows the Elementary/Middle/High Schools for the two properties you've asked about as well as several others currently on the market in the same price range. It also shows for each property the $'s per sqft, the age, # of bedrooms and tries to high light aspects of the each property that typically impact market value positively or negatively, like being on a busy street or lot size. I included in the analysis several other homes currently on the market in the same price range and similar size.

In summary, 424 Homer is the ONLY property where the children of that address would attend Palo Alto H.S. instead of Menlo Atherton. PA High is nearly 100 points higher scoring on the API score for their average student at an amazing 905 making that one of the top public high schools in the Bay Area. That combined with the possibility that the second 2bd 1bth unit on the home might be part of the reason why the owners initially thought they could get more for the home. If that unit could be as they suggested in their marketing rezoned to be a permitted rental unit/second dwelling it would increase the value.

Regardless as you will see in the spreadsheet analysis they are now priced appropriately for the size of the home, condition, school district and having an "in-law" unit.

2025 Santa Cruz is a very interesting home. New construction, therefore modern architecture, utilities, etc... and yet one of the lowest costs per sqft.

I'd be happy to do more analysis, on these and other properties for you. I can also assign one of our "Luxury and Country Team", Buyer Specialists to you. They will research the market daily until together we find THE right home for you. Then I can assure you, I personally will negotiate the best possible price & terms for your purchase, treating every $ as if it were my own.

Hire the Best! The right Realtor can make all the difference.

Stu Carson
"Luxury and Country" Team Leader
Keller Williams Realty
408-209-0849
Stu@StuCarson.com
0 votes Thank Flag Link Sun Nov 17, 2013
Thanks again. One more question, what do you guys think about 2025 Santa Cruz, Menlo Park. I know - very different properies and so many things are subjective - but similar pricepoint so a natural comp for us. Only downside that I see is busy street/noise. Thanks in advance
0 votes Thank Flag Link Sun Nov 17, 2013
The home was overpriced to begin with. The location is good, though Homer is a busy street. This home is on a small lot, and there is no garage. I have some free time to meet with you and discuss this and other opportunities in Palo Alto.
0 votes Thank Flag Link Sun Nov 17, 2013
Thanks all, very helpful. We got somewhat interested because of 1. location, and 2. my in-laws come over frequently so keeping as a duplex may make sense. However, it seems that conditions aren't great and even at the reduced price, if we were to renovate, my guess is that all in it'd be in the 2.4-2.6$M range, so pretty expensive for a not so ideal property.
0 votes Thank Flag Link Sun Nov 17, 2013
I have a network of good contractors and individual trades as well, and I have extensive experience building (remodel and new construction) since I just finished our house in PA. We could meet at the property and address all your questions.
Flag Sun Nov 17, 2013
New Family; I can introduce you to the good contractor and he can give you some idea to change the floor plan and upgrade it with minimum cost.

If you like the location we can solve the other issue
Flag Sun Nov 17, 2013
Hi,

I believe the house was overpriced in the first place, and it didn't gain momentum; therefore, we saw the price decreases.
Some observations:
1. Although the location is nice, the lot is relatively small, even for PA
2. No garage: yes, you are right, the current rules would call for two parking spaces: one-car garage and one uncovered parking space on the property. However, the house was built in 1937 under different rules.
the new owner would grandfather the "no garage" situation, but if one would re-build from scratch, the new rule applies.
3. The layout is not ideal.
4. Bonus Basement: it is not up to today's standards: the low ceiling and those post in the middle of the room give you the basement feeling.
I hope it helps. I live on Addison Ave and I am very familiar with our neighborhood.
Thanks,
Alex Comsa
0 votes Thank Flag Link Sun Nov 17, 2013
Newfamily,
424 Homer is a complicated property. Let's start with the garage issue. Some older home in Palo Alto were built without garages. This is often true for homes on smaller lots. If a home did not have a garage to begin with the city can not make you put one up unless you tear it down and build new. Even then you only need to put up a carport, not a garage. However a carport takes up the same amount of space so it does not solve any problem. Since this lot is so small, 3920 square feet it would not be easy to put up a new house and covered parking. Putting up a new home on this lot would never make sense to someone who needs to pay 2million to get the lot. the new home could never have enough square footage to justify a price that would allow 2 million for the land and another $700,000 for the build out. there is no room for profit.

The next issue is why is it not selling to someone who wants the home the way it is. At the original price of 2.8 it was too overpriced to consider. At 2 million it is not so outrageous except that it has been converted to a duplex and would need conversion to put it back to a single family home. It is not a legal duplex so getting a loan on it would be problematic. It is no longer a sing family home so converting it back to one would cost money.

So there are so many problems even the frenzy for homes in Palo Alto has not produced a buyer willing to purchase this home. that does not happen too often so sometimes this presents an opportunity for a buyer with vision who has an agent with good negotiating skills.

Marcy Moyer
Keller Williams Realty Palo Alto
marcy@marcymoyer.com
Cal BRE 01191194
650-619-9285
Web Reference: http://www.marcymoyer.com
0 votes Thank Flag Link Sun Nov 17, 2013
This property is a project from the simple standpoint that it's a multi-family configuration in a single family neighborhood. There is no garage and the slicing up of the structure into 2 units means there may be other non-forming features. There are many homes in Palo Alto that don't have garages, most are grandfathered.
My opinion is that the price reductions were made because investment will be needed to make the property usable as a single family home.
0 votes Thank Flag Link Sun Nov 17, 2013
It is tenant occupied and makes showing difficult. It is currently being used as a duplex. The seller probably believed a duplex would be worth more than a single family in the area. Buyer's looking for a 5 bedroom home would need to factor in the cost to convert back into a single family home. With that the agent and seller is adjusting price to market conditions until a price attracts a buyer to write an offer.

Not all homes have garages. Sometimes the lot is just too narrow to drive a car to the back. I've seen this many times with homes with basements. A backyard garage but the window well for the basement prevents a car from accessing it. I don't know if that is the case with this home.
0 votes Thank Flag Link Sun Nov 17, 2013
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