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I recently had a discussion with another realtor about the state of the Los Altos real estate market. We both felt that it is somewhat easy to tract the number of home sales. However, we also both felt that due to the lower volume, the effect on sales price trends was not as easy to tract. Because sales volume is drastically down, each individual sale has a greater affect on the MLS statistical trend data.
In order to get a better understanding of Los Altos price trends, I ran a little experiment. Note: I realize that this may not be statistically sound, but I do think it is interesting.
I compared three homes that were similar in size, condition and location. The variable was in the timing of the sale. I compared two homes that sold late summer/early fall 2007 with a home that just closed escrow (early fall 2008). The difference in the sales price will (in theory) give us a better idea as to the effect the real estate downturn has had on our local real estate prices.
The sample properties are:
575 Arboleda Drive, Los Altos. This home was listed on July 17th, 2007 for $1,295,000. It was a 2 bedroom 1 bath home (approximately 1168 sf) on a 10,019 sf lot. It sold with multiple offers for $1,500,000.
535 Arboleda Drive, Los Altos. This home was listed on August 23rd, 2007 for $1,425,000. It was a 3 bedroom 1 bath home (approximately 1268 sf) on a 10,018 sf lot. It sold with multiple offers for $1,450,000.
653 Arboleda Drive, Los Altos. This home was listed on September 25th 2008 for $1,349,000. It was a 2 bedroom 1 bath home (approximately 1129 sf) on a 10,234 sf lot. It sold with multiple offers for $1,380,000.
All three homes were similar in size, condition and located within the same block on the same side of the street. The two homes that sold in 2007 have been torn down and are in the process of being re-built. The home that just closed escrow, 653 Arboleda Drive (which closed escrow on Friday), already has a chain fence around it indicating that the buyer is going to do extensive construction on the property.
Comparing these homes and the time-lines in which they sold, one can (loosely) conclude that over the past year, the price (demand) for this type of home in Los altos has dropped by approximately 8%.