In addition, it is common knowledge that within cities, certain neighborhoods are stronger than others.

We are also seeing different markets within cities depending on the price range of the properties being offered for sale.

Below you will see charts for San Carlos, Menlo Park, and Palo Alto broken down into quartiles - i.e. each city is divided into four quartile price ranges - one could label them “low price quartile”, “middle low quartile”, “middle high quartile” and “high quartile”. These prices are for LIST prices.

Here is the chart for San Carlos:

Let’s look at San Carlos…….

In the lowest price quartile in San Carlos, average prices have declined from $825,000 July 2007 to $745,000 July 2008.

In the middle low price quartile in San Carlos, average prices have were $1,075,000 July 2007 dropped to $925,000 in April 2008 and have recently risen to $1,000,000.

In the middle high price quartile in San Carlos, average prices have declined from $1,400,00 July 2007 to $1,300,000 July 2008.

In the high price quartile in San Carlos, average prices have declined from $2,100,000 July 2007 to $1,700,000 July 2008.

In San Carlos:

The lowest quartile price homes are found east of El Camino and prices in those neighborhoods have dropped over the past year. 

The very highest price range in San Carlos has dropped significantly over the past year.

The entry level price quartile (low middle) for homes located west of El Camino has remained fairly steady.

Here is the chart for Menlo Park:

In the lowest price quartile in Menlo Park, average prices have declined from $700,000 July 2007 to $500,000 July 2008.

In the low middle price quartile in Menlo Park, the average price of $900,000 has remained fairly constant over the past year.

In the high middle price quartile in Menlo Park, the average price was $1,325,000 July 2007 and has risen slightly to $1,400,000 July 2008.

In the high price quartile in Menlo Park, average price was $2,500,000 July 2007 and has risen $2,750,000 July 2008.

The lowest priced areas in Menlo Park are in Belle Haven east of Highway 101, property values in that area have dropped significantly.

The higer priced areas of Menlo Park west of El Camino (west Menlo) have increased over the past year even during a very tough market overall. The desirability of west Menlo is matched by the continued financial strenght of the people who want to own there.

The chart does indicate a slight cooling in all prices ranges since spring 2008.

Let’s look at Palo Alto……

In all four price quartiles in Palo Alto, average prices are about the same in July 2007 and July 2008.

The Palo Alto market has remained very strong over the past year.

Sarah Scafford of International Listings recently wrote a guest post in Pat Kitano’s Transparent Real Estate talking about the differences between timeshares and fractional ownership. Most of what Sarah writes is spot-on.

I am fortunate to own a fractional at Old Greenwood in the Truckee/Lake Tahoe areas and get to spend 3 weeks a year in a wonderful townhouse with attached garage overlooking the 18th fairway of the Nicklaus designed Old Greenwood golf course.  Amenities include the Pavillion a recreation center containing 2 pools, tennis courts, gym, bar, and restaurant. You can sit at the pool and see the backside of Northstar Ski resort which is about 15 minutes away by shuttle.

I declare this fractional as my second home and deduct both interest and property taxes.

I did not purchase as an investment though I am confident that in 20/25 years when I want to sell, I will get my investment back fully. In the mean time, I get to spend 3 weeks a year golfing and skiing to my heart’s content without the hassles of full vacation property ownership.

Let me know if you would like further information on Old Greenwood.

I can certainly say we see this trend in the San Francisco Bay Area market. The upper income desirable communities in San Francisco and the Peninsula are doing just fine during our current economic slowdown where the less costly more affordable lower income areas are facing numerous foreclosures and dropping property values.

I generally advise my clients to purchase in the best area they can.

One can always change the house but one can not change the location.

After 30 years selling real estate on the San Francisco Peninsula, I know the neighborhoods inside and out; I can help point you in the right direction and help you evaluate what neighborhood will be best for you.

2007 data is in blue and 2008 data is in red.

These numbers reflect closed sales through June 30 of each year.

As reflected in the number of sales my office has completed this year, the number of closed sales in all communities is down from 2007.

Mountan View down 3%

Los Altos down 21%

Palo Alto down 27%

Menlo Park down 28%

East Menlo Park down 72%

Redwood City down 16%

San Carlos down 20%

2007 data is in blue and 2008 data is in red.

As you can see inventory has increased in all communities from 2007 to 2008.

Mountain View up 91%

Los Altos up 45%

Palo Alto up 42%

Menlo Park up 47%

East Menlo Park up 58%

Redwood City up 61%

San Carlos up 54%

A short sale occurs when the existing loan balance on the property is greater than the value of the home.

The property is placed on the market and an offer is obtained which is accepted by the owner subject to the lender’s approval. The lender’s approval must be obtained before the sale can proceed and close. The lender needs to agree to accept less payment of an amount of money less than the current loan balance.

For example, there is a property with a $600,000 loan on it that is currently worth $500,000. An offer is obtained at $500,000 and then the offer is sent to lender for their approval. The lender does their own appraisal of the property. If you can convince lender property is only worth $500,000 in the current market then they may agree to take $500,000 now as full payoff of the loan instead of taking 6 months to foreclose on the property and then put property on the market and then sell for only $500,000 anyway and maybe less if the property or the market continues to deteriorate.

James Wexler, a real estate in the Scottsdale/Phoenix area has written an excellent post where he goes into detail how to make the short sale process easier and less time-consuming.

Here is the average sales price data for Mountain View, Los Altos, and Palo Alto.

Los Altos average sales price is up about 7% from last year and average sales price for Mountain View and Palo Alto remains basically unchanged.

Please review average sales prices in the chart above.

The blue column is 2007 and the red column is 2008.

I have broken out Menlo Park into the areas west of Highway 101 and the areas east of Highway 101 to indicate how different the current market can be based on price range and location.

In west Menlo Park, the 2008 average sales price of $1,841,515 is an increase of 15% from last year.

In east Menlo Park, the 2008 average sales price of $414,612 is a decrease of 34% from last year.

Redwood City has experienced a slight decrease and San Carlos a slight increase.

Here is what our office has experienced in the first half of the year to date.

Average sales price is up 5.5% but the number of sales is down 38%.

So in our market area, prices have held up fairly well and in some cases increased while sales volume is down significantly.

 I will supply actual market data for each community in my market area in subsequent posts.