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Market Conditions in Palo Alto : Real Estate Advice

  • All334
  • Local Info27
  • Home Buying162
  • Home Selling21
  • Market Conditions42

Activity 47
Fri Feb 6, 2015
Elena Talis answered:
Good answers below. Bit it is hard to suggest any particular area without knowing your commute - where are you going to be working?
0 votes 7 answers Share Flag
Fri May 9, 2014
Erica Glessing answered:
It sold for $2.8M so Juliana was right! Palo Alto values are running strong in 2014.
0 votes 4 answers Share Flag
Mon Apr 7, 2014
Erica Glessing answered:
If your question is "is Barron Park a good area for Stanford University" most definitely yes. You can bike from Barron Park to Stanford, and the Margarita bus (stanford's bus) picks up from very close by. Easy!

It is relatively challenging to rent in Palo Alto and I recommend you go to the rental on the morning it is listed, as quickly as possible, in person, and make a case for yourself. Have a pay stub or proof of "how you can pay rent" in hand.

Good luck!
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0 votes 1 answer Share Flag
Thu Aug 29, 2013
Michelle Carr-Crowe answered:
Prices are significantly higher this year as compared to last year, but it only matters if you actually take advantage of the high point when it's available.
1 vote 7 answers Share Flag
Mon Nov 19, 2012
Juliana Lee MBA LLB answered:
Looking back at this spring and summer, and now fall ... talking with buyers, the spring increase in the number of houses seemed to come later this year than normal. Buyers were definitely feeling competitive pressure when they could find homes they liked.

The number of homes sold during the first quarter of 2012 in Palo Alto was the lowest it has been since 1998. The number of homes sold during the second and third quarters of 2012 were comparable to the same quarters in 2010 and 2011.
http://julianalee.com/palo-alto/palo-alto-statistics.htm

Home sales prices climbed dramatically in the first quarter of 2012 and have stayed high. With 40 single family homes listed for sale during the Thanksgiving week, the number of homes offered isn't dramatically different but the listing prices are. The lowest priced home listed is $1.38M. There are only 5 single family houses offered below $1.5M

If you look at sales price vs list price, this year has been another strong year for sellers. If you look at days on market, Palo Alto homes are selling about as quickly as they ever have and aren't showing signs of slowing.

How much of this year's benefits for sellers were due to facebook's IPO? It may well have caused people to delay offering their homes for sale but what stands out is that 418 homes have been sold in 2012 vs 418 homes during the same period in 2011, yet prices climbed dramatically.

Juliana Lee, MBA LLB
cell: 650-857-1000
Top 3 agent nationwide at Keller Williams Realty
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0 votes 4 answers Share Flag
Sun Jul 8, 2012
Elena Talis answered:
So what is the real question? Is this house is worth the asking price? Yes, the lot size and the location alone support the price. Keep in mind that this part of Palo Alto belong to Los Altos school district and there is very few comparable sales to help with the pricing. ... more
0 votes 7 answers Share Flag
Tue Jun 19, 2012
Marcy Moyer answered:
Mindy,
The inventory is always low this year inventory in all classes is at historic lows. There is just not a lot of turn over in Palo Alto multifamily homes since the rental market is always so good here and many investors buy and hold for decades.
However, this year the multi family home inventory is low everywhere, not just Palo Alto. It is almost as hard to find one for sale in surrounding cities like Menlo Park, Redwood City, and Mountain View.
Marcy Moyer
DRE 01191194
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0 votes 2 answers Share Flag
Wed Jul 20, 2011
Suz A answered:
Hello Lost,
Homeowners sell for a lot of reasons. In some cases, they are under pressure to sell and they take the first offer. I'm not a sophisticated investor, but I do know that in a soft market, selling after two years is not a strategy for wealth building. Many Realtors will tell you that if you are not going to be in a house for five years, you might not build equity.

You might be aware that Mark Zuckerberg just purchased a home the 940301 zip code (Palo Alto) - maybe a sign that things have calmed down enough at Facebook that he can take care of needs like this. The previous owner of Zuckerberg's house made $1 million on the sale.

I do agree with you. The example you cite is brutal.

SuZ
PML of Longmont, CO
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0 votes 9 answers Share Flag
Mon Jan 10, 2011
Michael Cheng answered:
I've got just your number. It's not in Palo Alto, but if you're looking for a project, I figured you're probably not that selective.

This one is being listed by a busted builder for the last 3 years. It's half completed and there's an identical one across the street in the same condition.

http://www.redfin.com/CA/Oakland/9745-Thermal-St-94605/home/17358905

Good luck.
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0 votes 2 answers Share Flag
Wed Jul 21, 2010
Joseph Chen answered:
Dear Mk

Below is a link to the FEMA.gov website. Enter the address of your concern in the box located on upper left corner of the page. The site will generate a Flood Map for you.

http://msc.fema.gov/webapp/wcs/stores/servlet/FemaWelcomeView?storeId=10001&catalogId=10001&langId=-1

Hope you find this information helpful. Let me know if you need anything. I'll be glad to help you out.

Joseph Chen
Keller Williams Realty
Palo Alto
650-776-1997
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1 vote 6 answers Share Flag
Tue Jan 12, 2010
Brad Gill answered:
Just because a home becomes repossessed by a bank doesn't mean that that bank will turn around and immediately post the home for sale. There are many factors that banks must weigh before deciding whether or not they will immediately market the repossessed home for sale.

Currently in Santa Clara County there are about 3500 homes that have been repossessed over 2009 that have not been marketed for sale (the so called “shadow inventory” of foreclosed homes). There are currently 2500+ homes, condos and multi-family residences for sale in Santa Clara County – so imagine if all 3500 foreclosures hit the market at the same time?

Banks understand the forces that drive the housing market and with last year’s gains in real estate values holding through the beginning of this year, hopefully the banks will be more likely to hold their foreclosure inventory then rush to bring them to market.

There are also accounting issues that these banks face. When they foreclose on a home they can continue to count it as an asset at full value until they bring such asset to the market for sale – once the asset is priced to sell they must immediately discount the value which reduces their balance sheet and hurts their financial standing. And with 141 bank failures reported by the FDIC over 2009 alone (check it out at the FDIC's website - www.fdic.gov), and added pressure by government stress tests, I’m sure that banks will be cautious to begin willfully acknowledging losses on their financial statements for some time to come.

Additionally, I also believe that there is just a lot of sorting out left to accomplish – the FDIC is frantically selling the “assets” (which would include foreclosures and delinquent mortgages) of failed banks to investors at steep discounts as they rush to recover their insurance obligations. And these investors have their own ways of dealing with their purchased inventory of REO’s.

And finally, there continue to be voluntary foreclosure moratoriums placed by national lenders as well as forced moratoriums by the GSE’s with the intent to keep delinquent homeowners in their homes long enough for these homeowners to either seek loan modifications or sell their homes on the open market as short sales.
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1 vote 1 answer Share Flag
Tue Dec 15, 2009
Cp_94301 answered:
pacific,

Have you tried refinancing your property? Rates are at historic lows, and should get rid of the arm as soon as you can. If you find that you cannot refinance, it is because the house already has lost value to be regarded as a sound investment by most institutions.

Depending on what you find out, you should consider selling. Just because you made a mistake buying at the peak of the market does not mean you need to make another mistake by not unloading the property to mitigate your losses. Jster points out it is a pain in the butt to move, which is true. However, consider the alternative: how much equity and wealth do you wish to ultimately transfer to your family? Making a bad investment with what is likely your most expensive asset is a sure fire way to destroy your families wealth.
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1 vote 14 answers Share Flag
Sun Dec 6, 2009
Jeff Stricker answered:
Hello Home Buyer
RE Sutherland, although it shows very well, it's only a 3/1 - most folks are looking for 3bd/2ba minimum. Therefore it will get fewer looks from potential buyers in this price range. However, there is very little on the market presently. Also, until a home has been on the market for 30 days or more, most sellers aren't willing to consider an offer very much under the asking price. Bottom line: buyers decide what the value is. Having been at this for 20 years, I can assure you it's not predictable what someone may be willing to pay - or not - for a particular home. It will be interesting to see what this one goes for.
Best of luck!
Steve
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0 votes 2 answers Share Flag
Thu Oct 15, 2009
Trapdoor answered:
I've got no special insight, but I'd guess the conditions you describe are the result of the fact that the more affluent you are the more you can afford to "wait out"; the current down turn. So the more expensive houses are priced more aggressively (or unrealistically) and their supply and sales volume is more constrained (driving down the average sale price). The bizarre number of homes for rent in Palo Alto bears this out. Annecdotally, I can say I've got a couple of friends trying to rent their old places out rather than sell, and even know one guy who is living with his divorced wife rather than sell their place and split the proceeds while they wait things out! I certainly understand the psychology (no one wants to sell low), but if everyone is thinking this, then now is probably a good time to sell... ... more
0 votes 1 answer Share Flag
Mon Oct 5, 2009
Jonp answered:
Why do you say this deal was impressive?
0 votes 2 answers Share Flag
Fri Sep 4, 2009
Terri Vellios answered:
I have a PDF I'd be willing to email if you are interested in the sales trend for the last two years in Palo Alto.

There was a foreclosure moratorium put in place to slow down the market. That was to end recently.

As for a wave of foreclosures I have access to data showing notices of default and pre-foreclosure status, so if I chose to compile data from that, I could. But that doesn't mean that the homeowner will get to the point of short selling or going to foreclosure. They may be working on loan modifications or it may be a temporary situation. The reality is we are still seeing more homes in distressed. If Banks were to release all these foreclosures in a wave it would be like shooting themselves in the foot, competing with lower priced homes. It makes better sense for the banks to try to work with the borrower, and if need be, release the homes slowly into the market. But then again, banks don't have a history of doing "what is smart".

To respond to multiple offers, it is the auction mentality...buyers bid on low priced homes and then they compete, after being beat out of offers they become competitive, not only financially, but emotionally. This drives the price up, and that is what determines market value. What a buyer is willing to pay and what it closes at. When talking about statistics one must understand the bench mark and what the statistics are. For example, prices are up? Ok, from yesterday, 2 months, 2 years? Neighborhood and area should not be "lumped" into one comment that is the all knowing Oz answer.

It is always good advice to consider the source of the information and their motivation for providing that information. Newspapers sell on hype, Realtors and agents depend on a healthy market, as do lenders. But just because they may have a monetary interest doesn't mean that the information is incorrect.
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0 votes 30 answers Share Flag
Wed Aug 26, 2009
Marge Draper answered:
Well, it is morbid, but that's human nature. I don't think the value of property in South Palo Alto is lowering, first of all.

I think the worry is that this kind of thing is "catching". By that I mean that young people are impressionable. Depression is a very serious disease, and when untreated can lead to suicide. People in San Francisco use the Golden Gate Bridge, on the Peninsula they use CalTrain. ... more
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Wed Aug 12, 2009
Joe Nernberg answered:
Not a fan of Eichler homes. I think the concept is interesting, but not very functional or comfortable. These homes are always too hot or too cold because the homes have no attics and numerous windows. Radiant heating can be a good system if heating was unitary. Most of these heating systems have just one thermostat/zone. Seismic stability is another concern. Today's construction require shear walls, so it's unusual to see glass within 4 feet of the end of each wall/corner. Rather, Eichler homes rely on glass (and not always tempered for safety). Low slope/flat roofs tend to leak and wear out quickly.

You cannot make Eichlers homes safer or more comfortable without changing the concept. As long people understand they are buying a conversation piece - they should not be disappointed.
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0 votes 3 answers Share Flag
Wed Jul 22, 2009
94402 answered:
According to jonp, housing is not tied to affordability in palo alto.

Do you have any data to support this assertion? If anything, it is the other way around. Housing is actually a lower percentage of families' net worth in san mateo/hillsborough compared to the midwest. Palo alto is more than likely the same.

But this is really besides the point, as a couple of posters pointed out, housing zoomed right by incomes and overall net worth over the past 15+ years. Doesn't take a genius to know what direction it will take now.
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1 vote 37 answers Share Flag
Wed Jul 22, 2009
Eastcoaster answered:
I've only be here a short while, but find it confusing when blogs and questions are ranked via "popularity" because whatever the formula used, it is hard to predict so you always end up clicking more that you want to find out whether there's a new post. ... more
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