Comments on: Palo Alto Real Estate Prices Continues To Defy Gravity…And Expectations…But Tight Inventory Is Part Of The Reason http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html Commentary on the real estate market of the San Francisco Bay Area Sat, 13 Mar 2010 18:45:15 -0700 http://wordpress.org/?v=2.8.4 hourly 1 By: salina http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-143036 salina Fri, 07 Nov 2008 09:43:00 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-143036 Why do realtors still talk up the market? They would be better to let prices come down to keep the industry moving rather than causing what will be catastrophic bust in a years time. Jimmy Noh is right. Its must a matter of time. Maybe its because the realtors feel guilty that they are THE cause of the credit crisis internationally by their greed and disregard for normal economics. The layoffs in Silicon Valley have started. Watch this space. Defy gravity... There is no such thing anywhere on earth. Why do realtors still talk up the market? They would be better to let prices come down to keep the industry moving rather than causing what will be catastrophic bust in a years time. Jimmy Noh is right. Its must a matter of time.
Maybe its because the realtors feel guilty that they are THE cause of the credit crisis internationally by their greed and disregard for normal economics. The layoffs in Silicon Valley have started. Watch this space.

Defy gravity… There is no such thing anywhere on earth.

]]> By: Jimmy Noh http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-142988 Jimmy Noh Thu, 16 Oct 2008 09:16:42 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-142988 This only proves my point. The market is now turning, delayed but turning. The year to year figures are insane. 35% increase is sheer bubble, totally out of proportion to incomes in the area. The lowest income to housing price in the country. The crash will come to lower end housing in Palo Alto and it will be a big big correction of 40% or more. 1. There are no more IPOs. The stock market has crashed. When the venture capital dries up these guys will all be out of a job. 2. People in Palo Alto have money, and its in shares. Shares have crashed. People have lost a ton of money. This will effect how rich they feel. 3. The Palo Alto schools, good as they are, are being overcrowded and squeezed out by State policy of increasing lower end housing in Palo Alto. There are now gangs of hispanics at Paly. This is not a nice thing to say but its the truth and it is a fact that it will not attract high end real estate purchasers. 4. It will only take an earthquake...and that will pull the card out of the bottom of the house of cards. This only proves my point. The market is now turning, delayed but turning. The year to year figures are insane. 35% increase is sheer bubble, totally out of proportion to incomes in the area. The lowest income to housing price in the country. The crash will come to lower end housing in Palo Alto and it will be a big big correction of 40% or more.

1. There are no more IPOs. The stock market has crashed. When the venture capital dries up these guys will all be out of a job.

2. People in Palo Alto have money, and its in shares. Shares have crashed. People have lost a ton of money. This will effect how rich they feel.

3. The Palo Alto schools, good as they are, are being overcrowded and squeezed out by State policy of increasing lower end housing in Palo Alto. There are now gangs of hispanics at Paly. This is not a nice thing to say but its the truth and it is a fact that it will not attract high end real estate purchasers.

4. It will only take an earthquake…and that will pull the card out of the bottom of the house of cards.

]]> By: Jimmy Noh http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-118765 Jimmy Noh Sun, 04 Nov 2007 01:53:34 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-118765 Problem here is if you look at what happens to high income enclaves such as Palo Alto in recessions is that these enclaves just experience a lag in price declines of two years. This is because people dont have to sell or get adjustable mortgages but when the areas around them go down hill buyers move out of the expensive areas to adjacent areas experiencing price declines. The declines in prices in Palo Alto will come and will come very large indeed but not until next year. Look at the historical data from past recessions. Problem here is if you look at what happens to high income enclaves such as Palo Alto in recessions is that these enclaves just experience a lag in price declines of two years.

This is because people dont have to sell or get adjustable mortgages but when the areas around them go down hill buyers move out of the expensive areas to adjacent areas experiencing price declines. The declines in prices in Palo Alto will come and will come very large indeed but not until next year.

Look at the historical data from past recessions.

]]> By: Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. (650.387.2860) http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-114005 Kevin Boer, Broker Owner, 3 Oceans Real Estate, Inc. (650.387.2860) Thu, 18 Oct 2007 05:53:11 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-114005 Hi BJ & Realist, Thanks for dropping by. We are comparing apples to oranges: You and I are both relying on data summaries without digging into the underlying data. Here's what I mean: 1) The Altos Research stats that I used above are very specifically defined as follows: <i>The rolling 90-day average of median prices of all "Active" and "Pending Continue to Show" single family homes on the MLS as of each date.</i> 2) The <a href="http://www.dqnews.com/ZIPSJMN.shtm" rel="nofollow">DataQuick data you cite</a> uses a <i>very</i> different underlying data set. As best as I can tell, DataQuick's definition is <i>the median sales price of all single family resales plus all condo/townhome resales plus all new construction with a close of escrow date in the four weeks preceeding 9/26/07, as recorded in county data</i> Completely different data sets. In addition, Data Quick seems to be confusing Palo Alto with some bits of East Palo Alto, and appears to omit the 94303 and 94304 zip codes. Trust me, the median sales price of homes in Palo Alto is most emphatically <i>not</i> around $1M now. More in a later post. Hi BJ & Realist,

Thanks for dropping by. We are comparing apples to oranges: You and I are both relying on data summaries without digging into the underlying data.

Here’s what I mean:

1) The Altos Research stats that I used above are very specifically defined as follows: The rolling 90-day average of median prices of all “Active” and “Pending Continue to Show” single family homes on the MLS as of each date.

2) The DataQuick data you cite uses a very different underlying data set. As best as I can tell, DataQuick’s definition is the median sales price of all single family resales plus all condo/townhome resales plus all new construction with a close of escrow date in the four weeks preceeding 9/26/07, as recorded in county data

Completely different data sets. In addition, Data Quick seems to be confusing Palo Alto with some bits of East Palo Alto, and appears to omit the 94303 and 94304 zip codes.

Trust me, the median sales price of homes in Palo Alto is most emphatically not around $1M now.

More in a later post.

]]> By: Realist http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-113938 Realist Wed, 17 Oct 2007 20:00:59 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-113938 According to dqnews.com today, the average price of a home sold in Palo Alto in September was $1.0 or $1.1m, depending on the zip code. If avg asking prices remain around $2.4m in PA, this tells me that realtors are not advising their clients correctly, and that many buyers are more astute readers of the market than realtors. Kevin & Christine, you're not winning yourself any fans with your spin. Stop drinking the CAR koolaid. According to dqnews.com today, the average price of a home sold in Palo Alto in September was $1.0 or $1.1m, depending on the zip code. If avg asking prices remain around $2.4m in PA, this tells me that realtors are not advising their clients correctly, and that many buyers are more astute readers of the market than realtors. Kevin & Christine, you’re not winning yourself any fans with your spin. Stop drinking the CAR koolaid.

]]> By: Christine Kani, Mortgage Broker, Equitas Capital http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-113624 Christine Kani, Mortgage Broker, Equitas Capital Tue, 16 Oct 2007 17:45:11 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-113624 Great article Kevin. I absolutely agree with the assessment you articulate. It is unfortunate that in the past some members of our community have been done a disservice -- having either strong-armed or falsely encouraged of buying a home by ways of a neg-am mortgage....which is not resetting or abou to reset. It is indeed the members of such micro communities who are feeling much of the hurt, and are desperately trying to refinance, or sell if they can no longer qualify. Indeed, I often encourage people to look ahead and prepare for a refinance EVEN IF the mortgage has not reset if people still want to keep their homes. In this environment, it is more important than ever to ensure that buyers are not only fully qualified, and fully understand their CASH FLOW situation before moving forward to buying a home! Great article Kevin. I absolutely agree with the assessment you articulate. It is unfortunate that in the past some members of our community have been done a disservice — having either strong-armed or falsely encouraged of buying a home by ways of a neg-am mortgage….which is not resetting or abou to reset. It is indeed the members of such micro communities who are feeling much of the hurt, and are desperately trying to refinance, or sell if they can no longer qualify. Indeed, I often encourage people to look ahead and prepare for a refinance EVEN IF the mortgage has not reset if people still want to keep their homes. In this environment, it is more important than ever to ensure that buyers are not only fully qualified, and fully understand their CASH FLOW situation before moving forward to buying a home!

]]> By: BJ Dowd http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-113201 BJ Dowd Sun, 14 Oct 2007 18:30:44 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-113201 Kevin... ASKING prices are irrelevant. It's sales prices that matter. Menlo Park median asking is way over $1mil but median sales price is $750k because few are buying. Kevin… ASKING prices are irrelevant. It’s sales prices that matter. Menlo Park median asking is way over $1mil but median sales price is $750k because few are buying.

]]> By: Factual versus Actual: The Bay Area Real Estate tidal flow to the North Bay at Wine Country And Horses http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-111971 Factual versus Actual: The Bay Area Real Estate tidal flow to the North Bay at Wine Country And Horses Tue, 09 Oct 2007 17:03:42 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-111971 [...] yesterday, a long time Coldwell Banker agent in Sonoma County yesterday, and shared with her the 3 Ocean’s Real Estate recent post about rapid median price apprection in Palo Alto and other selected markets in the Bay [...] [...] yesterday, a long time Coldwell Banker agent in Sonoma County yesterday, and shared with her the 3 Ocean’s Real Estate recent post about rapid median price apprection in Palo Alto and other selected markets in the Bay [...]

]]> By: Chris Iverson, Realtor http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html/comment-page-1#comment-111154 Chris Iverson, Realtor Sat, 06 Oct 2007 15:32:47 +0000 http://3oceansrealestate.com/blog/palo-alto-real-estate-prices-continues-to-defy-gravityand-expectationsbut-tight-inventory-is-part-of-the-reason.html#comment-111154 Kevin, Looks like Adam Smith's invisible hand continues to be active in Palo Alto. Looking back over the last three years, we see this is the norm in Palo Alto, the number of homes for sale continue to be unusually low for the population. There is another factor at work here. If you sell your median home in Palo Alto for a median price of $2.35M, where do you go? Additionally, the trend of knocking down homes priced in the lower quartiles, and rebuilding on those lots with new homes priced in the upper quartiles is responsible for some of the results you are seeing. A 50 year old Eichler that sold for $1,000,000 a year ago isn't selling for $1,350,000 today. As Mark Twain said: There are lies, damn lies and statistics. That said, Palo Alto and the adjacent communities are a unique market, and real estate is very, very local. Just ask my clients looking at homes in Sunnyvale. Kevin,
Looks like Adam Smith’s invisible hand continues to be active in Palo Alto. Looking back over the last three years, we see this is the norm in Palo Alto, the number of homes for sale continue to be unusually low for the population.
There is another factor at work here. If you sell your median home in Palo Alto for a median price of $2.35M, where do you go?
Additionally, the trend of knocking down homes priced in the lower quartiles, and rebuilding on those lots with new homes priced in the upper quartiles is responsible for some of the results you are seeing. A 50 year old Eichler that sold for $1,000,000 a year ago isn’t selling for $1,350,000 today.
As Mark Twain said: There are lies, damn lies and statistics.
That said, Palo Alto and the adjacent communities are a unique market, and real estate is very, very local. Just ask my clients looking at homes in Sunnyvale.

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