Arn Cenedella

Archive for the 'Palo Alto Real Estate' Category

Inventory Levels Palo Alto Menlo Park Redwood City San Carlos

All 4 communities saw inventory levels drop at the end of the year.

All 4 communities have seen inventory levels increase through 2009.

Palo Alto has experienced the greatest increase in inventory levels – very interesting!

Palo Alto Real Estate Friday Update 2/27/09

22 new listings this week in Palo Alto.

2 pending sales this week in Palo Alto.

123 listings currently for sale in Palo Alto.

23 pending sales currently in Palo Alto.

As one of the agents in my office said after tour today, there sure are a lot of homes for sale in Palo Alto right now “a dime a dozen” says she.

Good opportunity to get into one of the Peninsula’s most sought after communities.

Good news for Investors – Fannie Mae rule change

Until today, Fannie Mae had a rule that they would not buy mortgages from borrowers who had five or more real estate loans – or perhaps more accurately stated – mortgages from borrows that had loans on five or more properties.

Fannie Mae changed this rule today:

Per Fannie Mae announcement 09-02:

Multiple Mortgages to the Same Borrower
To support prudent lending for housing investment, Fannie Mae is changing our current limit of four financed properties per borrower. We will allow five to ten financed properties per borrower, with certain eligibility and underwriting requirements, including a 720 minimum credit score and 70-75% maximum LTV/CLTV/HCLTV (depending on the transaction and property type). The requirements apply to any loan being delivered to Fannie Mae, regardless of whether Fannie Mae is the investor on the borrower’s other mortgages.

I have recently written several posts stating my belief this is a great market for first-time buyers or for first-time investors.

This Fannie Mae rule change will make it easier for investors to make additional real estate investments.

Due to price decreases and interest rate decreases, invesotrs can now buy property in certain areas of the San Francisco Peninsula with 20% down and have a break-even cash flow. This was impossible two years ago.

In more expensive areas, the numbers are also better than they were two years ago but will require 30% to 35% down.

I have contacts with real estate brokers throughout the country – Dallas, Raleigh, Austin, Phoenix, Indianapolis, Sacramento, San Diego, and the Bid Island. If you are looking for wloer downpayments with greater cash flow, these areas are worth a look.

And do not forget, you can use 401(K) and IRA funds to purchase real estate so if you are tired of stock market gyrations, this is an option to consider.

What is happening in the Palo Alto 94301 market zip code?

Palo Alto 94301 generally includes all areas north of Oregon Expressway east of Alma including downtown, Professorville, Old Palo Alto, and Crescent Park. This is Palo Alto’s most expensive zip code as you will see by the median prices below.

Where is the market in this area of Palo Alto headed?

The median list price in Palo Alto 94301 increased to $2,475,500.

Average price per square foot in Palo Alto 94301 decreased to $951.

Average days on market increased to 90.

33% of the listings in Palo Alto 94301 have a price reduction.

The current market action index for Palo Alto 94301 is 20 – below 30 is considered a buyers’ market.

This market action index is a higher higher – indicating a little warmer market – still a buyer’s market but not as strongly so as other Palo Alto areas.

Below you will find chart showing market action index by price range over the past 6 months.

The price range is broken down into 4 quartiles:

Highest has median price of $5,495,000

2nd highest has median price of $2,649,000

3rd highest has median price of $1,922,250

Lowest has a median price range of $1,245,000

Wow ! The market action index took a big plunge right about time the stock market was going south.

But has rebounded strongly since that time. It is almost like the market took a real shot – then caught its breath – and then buyers started realizing what a fabulous place the older and most northern neighborhoods of Palo Alto are.

As an aisde the Facebook building on Hamilton Avenue is for sale at $9.1M.

What does Zillow Q4 2008 report say about the local market?

During my 31 years in the real estate business selling properties up and down the San Francisco Peninsula, I am often asked what is so special about Menlo Park or Palo Alto or Los Altos?

Why are homes more expensive in these areas compared to San Carlos (my home for the past 23 years), Redwood City, Belmont, and Mountain View?

The data below taken from Zillows Q4 2008 reports for the San Francisco MSA and the San Jose MSA may give an answer.

On a quarter Q4 to quarter Q3 comparision:
Menlo Park home values up 1.2%
Palo Alto home values down -0.4%
Los Altos home values down -2.9%
while Mt. View is -7.1%, East Palo Alto is -16.7%, Redwood City is -8.4%, San Carlos is -7.3%, and Belmont is -9.4%.

The year to year data is similar Menlo Park up slightly, Palo Alto and Los Altos down slightly, and the other cities down a fair amount ranging from -4.9% to -37.3%.

As I have told my clients “when times are tough, the more desirable markets hold up better”.

But for those doomsayers out there, please note for EVERY CITY except East Palo Alto, the 5 year and 10 year annualized change are ALL POSITIVE. So even after two fairly tough years, home values in these San Francisco mid peninsula cities has gone up over the past 5 to 10 years.

Average increases over 10 years at about 6% per annum. East Palo Alto had a 10 year annualized increase of 5.3%.

A $500,000 property purchased in any of these cities 10 years ago – on average – would be worth $909,000 today.

Say this property was purchased with 20% down or $100,000 10 years ago, the current equity of $509,000 would represent a 17.67% return on the downpayment. This is a “broadbrush” calculation for illustration purposes.

Of course, if the market should continue down for another year or two, the 5 and 10 year annualized returns would be reduced. But I think this data does show the strenght of our local market in the worst economic conditions most of us have ever seen in our lifetimes.

The media often uses Zillow data to paint a bleak picture of the real estate market.
Using Zillow’s own data, I believe one can make reasonable arguments that our market is doing pretty good all things considered.

If there are any stock market guys out there, I would be interested to see 5 and 10 year annualized stock market returns after the current collapse.

Consider real estate in your retirement accounts. Want to learn more, just let me know.

What is happening in the Palo Alto market 94303 zip code?

Palo Alto 94303 generally includes all areas east of Middlefield south of Embarcadero but does include the area around highly-regarded Duvenek School. The 94303 zip code also includes all of East Palo Alto.

Where is the market in this area of Palo Alto headed?

The median list price in Palo Alto 94303 remains stable at $1,295,000.

Average price per square foot in Palo Alto 94303 decreased to $756.

Average days on market increased to 72.

43% of the listings in Palo Alto 94303 have a price reduction.

The current market action index for Palo Alto 94303 is 18 – below 30 is considered a buyers’ market.

Below you will find chart showing market action index by price range over the past 6 months.

The price range is broken down into 4 quartiles:

Highest has median price of $2,395,000

2nd highest has median price of $1,449,000

3rd highest has median price of $1,198,000

Lowest has a median price range of $280,887

The lowest price range in this report essentially shows data for East Palo Alto with a median price of $280,887. Only two years ago, the median price in East Palo Alto was over $600,000. East Palo Alto has been hit with numerous foreclosures so the current market in East Palo Alto is saturated with bank owned foreclosures.

You will note that the highest price range in Palo Alto 94303 has been and is extremely cold – ie buyers market – with market action index of only around 5 but now has warmed up slightly to around 10 – still weak.
The second highest price range has gotten stronger over the past 3 months and is now around 20 – still a buyer’s market but warmer. The entry level for Palo Alto has gotten colder and colder over the past 6 months and is now at an anemic 10 just like the highest price range.

The East Palo Alto market while being relatively warm with a market action index over 20 has cooled in the past tow months also.

What is happening in the Palo Alto market 94306 zip code?

Palo Alto 94306 includes College Terrace, the California Avenue area, Barron Park, and most of Palo Alto south of Oregon west of Middlefield.

Where is the market in this area of Palo Alto headed?

The median list price in Palo Alto 94306 decreased slightly to $1,449,900.

Average price per square foot in Palo Alto 94306 increased to $759.

Average days on market increased to 73.

56% of the listings in Palo Alto 94306 have a price reduction.

The current market action index for Palo Alto 94306 is 16 – below 30 is considered a buyers’ market.

Below you will find chart showing market action index by price range over the past 6 months.

The price range is broken down into 4 quartiles:

Highest has median price of $2,499,000

2nd highest has median price of $1,750,000

3rd highest has median price of $1,299,000

Lowest has a median price range of $988,000

Until about October 2008, the entry level price ranges in Palo Alto – the 3rd and 4th quartile price ranges were relatively strong – almost a balanced buyer/seller market in the upper 20s. 30 is a balanced market. Since October 1, the market action index in these lower prices ranges have dropped significantly  to a buyer’s market. The highest price ranges have been more stable over the past 6 months.

It appears that perhaps the stock market debacle in early October 2008 has put the brakes on the usually robust Palo Alto market.

Facebook Building for Sale in downtown Palo Alto $9.1M

The Facebook building at 164 Hamilton Ave. Palo Alto just came on the market at $9.1M.

This 10,395 square foot office building is listed by Vince Schwab.

2 years ago, I very much enjoyed selling a house located on Addison right across the street from HP’s founding garage location.

Now I will work on Facebook’s building.

Downtown Palo Alto is happening.

Did you know you can buy real estate with your 401(k) or IRA funds?

With real estate values down, there are excellent buys in real estate for long-term investment – both here on the San Francisco Peninsula and elsewhere in the country. I have developed experienced real estate contacts in other areas of the country like Sacramento, San Diego, Phoenix, Dallas/Ft. Worth, Kansas City, Raleigh, NC, and elsewhere.

There are solid long-term investment opportunities available on the San Francisco Peninsula.

Would you prefer to have greater control over your retirement funds?

Would you prefer to invest your retirement funds in real estate – a tangible asset that people need for shelter?

Yes, real estate values in most areas of the country are down.
But I would submit that stock portfolios are down even more.

If you would like more information on investment opportunities and/or purchasing real estate with your 401(K) or retirement funds, please contact me for a FREE 50 page Q&A about self-directed IRA real estate investing.

I am happy to meet with you for a NO OBLIGATION consultation and explanation of the process.

New Listings in Palo Alto, Menlo Park, and San Carlos

New Palo Alto listings within last 10 days

New Menlo Park listings within past 10 days

New San Carlos listings within past 10 days

Just let me know if you need further information on any of these properties or wish to personally view the homes.