Real Estate

Real Estate Matters: Palo Alto homes staying on market longer

 

There have been two noticeable trends in the Palo Alto property market this year so far. First, properties have stayed on the market longer. Second, price reductions have been more common, especially at the very high end.

Inventory is up. There have been 344 new listings in the first half of 2016, up by 19 percent, compared to the same period last year. The median price of sold homes is $2.4 million so far this year, a marginal two percent decline from $2.45 million for the same period last year. However, it is the first decline in price since the recovery of the last financial crisis in 2009.

Average days on market in the first half of 2016 has been 21.6, a whole week longer than 14.7 days in the first half of 2015, and even slightly longer than 19.2 days back in 2012. Average days on market for active or unsold listings at the end of June was 43.5 days. After getting used to homes sold within a week in the past few years, the new reality of no solid offers after the first weekend of open houses did bring uneasiness to both sellers and listing agents. After 2-4 weeks, some chose to withdraw from the market, and some reduced price aggressively.

Excluding those homes later relisted at a lower price, there have been 58 new listings in the first half of 2016 later with reduced prices, more than double the 25 for the same period last year. Price reductions happened at all price ranges. Among the 58, there were 12 with initial listing prices above $5 million, 24 with initial listing prices above $3 million, and the last 24 below $3 million. Many of these properties are still not sold.

Listing prices are normally set based on discussions between the listing agent and the seller. While a good listing agent should know the target market very well, in reality it's not always the case, especially with the subtle changes in the Palo Alto property market. This year so far, cities on the Midpeninsula have shown different trends, while Palo Alto has started to decline, North Los Altos and good neighborhoods in the South Bay have remained the subject of buyers' bidding wars.

When the market changes, sellers tend to sense it later than buyers, because most sellers get to only sell once, while buyers go through multiple attempts. In other words, lower market participation for sellers leads to less insight about the market. In this case, even if a listing agent provides accurate and updated market information, with sellers having different and higher expectations, initial listing prices still might get set higher than the current pricing curve.

When the market is declining like today, correct pricing becomes even more critical to sellers' interests. If a property is priced too high, the selling side not only eliminates a large pool of potential buyers at the beginning but also takes the risks of having to lower the price. On the other hand, if listed too low, the seller may get trapped within a price range that is much lower than what's acceptable, as writing huge premiums over listing prices is no longer the norm.

For the rest of summer, when many locals headed out for summer vacations, international buyers, especially those from China, with their kids in the local summer camps, come to shop for homes for either investment or future relocation. It's worth watching how much inventory, especially those at the high end, that international demands can help us digest. For the rest of the year, while there are still mixed signs that could lead us to different projections, the probability of an instant rebound, however, seems very low.

Comments

5 people like this
Posted by Sell Now
a resident of another community
on Aug 12, 2016 at 1:45 pm

The peak is over. If you're thinking of selling, you'd better sell now. The foreign money is drying up, and the local buyers are fed up with unreasonably high prices.


13 people like this
Posted by Fear-mongering
a resident of Another Palo Alto neighborhood
on Aug 13, 2016 at 12:36 am

Welcome to late summer (based on school calendar) - the absolute slowest real estate market of the entire year (every year).


16 people like this
Posted by Get Smart
a resident of Barron Park
on Aug 13, 2016 at 10:44 am

The fact that Palo Alto is faring worse than Los Altos should be a sign. A sign that people who care about what is/was great about Palo Alto should wake up.

In my experience in the Bay Area over the years, these things made Palo Alto highly desirable among other local cities:
-the schools
-small-town feel with many amenities
-a lot of great retail - "the shops" people used to list as one attraction
-easy to get around relative to any other nearby city with comparable amenities
-proximity to Stanford
-smart nice population, more diverse than other wealthy areas

In the last 10 years, most of these assets have been signiicantly challenged, some perhaps gone forever, where by contrast, Los Altos has worked aggressively at preserving all of the above - they aspire to a "village" feel. Palo Alto has practically been under assault by people who want to cash out at the residents' expense. Where Los Altos has a billionaire resident setting up an investment/development company to mitigate the impacts of crazy boomtime cost increases and retain a small-town feel, Palo Alto has had vocal people like Kate Downing and Palantir actively turning the town into their own private office park.

The schools were always the primary driver of price, and too many years of administrators and their close parent enablers trying to protect the "brand" at the expense of doing the hard work to deserve the reputation (most importantly, hearing and acting on criticism and dissent rather than covering up and suppressing it). Not surprisingly, the results of not dealing with problems (including employees) that could have been discovered and fixed through a healthier relationship with the community and criticism are starting to show.

You can only cover for a growing divide between what someone says and reality for so long. And the trouble is, there's not just a lag in people realizing the emperor has no clothes, there's a lag in the hit to his reputation after he puts them back on. (This, however, does not mean he should lose any time in doing everything necessary to correct the mistake.) What's more, urban legends love counterintuitive conclusions: "you would think a place like Palo Alto would be the first place to find educational innovation yet they're way behind" or "you would think a place like Palo Alto would be flexible yet they are stuck in the last century thinking it's all about brick and mortar". (And the reality of these rumors will continue so long as the administrators and their enablers keep the focus on appearances rather than substance.)

If real estate were showing the same trends everywhere else, it would be one thing. This is new. Palo Alto - because of the schools - was usually the one place that remained stable when everywhere else tanked. What happens when too much of the higher end all flee to Los Altos or Saratoga or Woodside, and the lower end are pushed out by greedy developers, because Palo Alto has become a big office park with a lot of small apartments? The predictions of lowering housing prices will come true, but not because of capacity, because of destroyed desirability. Once that gets beyond a tipping point, it will be impossible to return.

Real estate agents should care about this for all kinds of reasons, especially because of the above lag in reputation.

Elementary enrollments are trending down. This is worrisome, since the elementary schools have traditionally been the best thing about this district.

Years of terrible policy and behavior from Palo Alto's special ed have hit the district's reputation incredibly in informal circles, and it won't be fixed by hiring expensive consultants when the people responsible for the untrustworthy and hurtful behavior toward families are still there. Administrators have created a culture of defensiveness where alienating and retaliating against parents who don't join in the echo chamber at district headquarters is rewarded, and untrustworthy behavior by employees is protected at taxpayer expense. There's nothing like seeing serious problems dealt with as if mostly for show to destroy trust forever. Worse still, the administration dealt with the worst cases by trying to push those children and families off the rolls - but that's that many community members who go out into the wider world and whose extended networks will see that this is not the kind of place where honesty, fixing mistakes, problem solving, and support for those who need it, are cherished above reputation. That in itself is ironically hugely destructive of trust and reputation. As a result of the top-level focus on reputation rather than substance, Palo Alto once had a great reputation for special ed but now Los Altos is regarded as far better.

More worrisome is the continuing and growing gap between the district administration's PR and reality. The latest article on school class sizes is a case in point Web Link
It took some parent gumshoes a lot of time to tabulate actual class sizes across the district, demonstrating a huge gap between what the community was being told about class sizes and what administrators had been telling the public in setting policy and spending district funds. In the meantime, the effects of large class sizes on existing students couldn't be glossed over to the families (and their networks of friends) experiencing them. My middle school student almost never had homework graded by a teacher. This was shocking to us in such a wealthy district, even in poor schools I attended as a child, we had more individual attention and feedback for our work from teachers.

A $375 million facilities bond, that was supposed to renew the schools for the next 100 years, and could have renovated the existing high schools while building and reopening the 3rd one, instead was spent on extra capacity at the existing high schools that (predictably) never did what was promised and has now left sigificant systemic problems. Yet the district administration is claiming they have new and renovated facilities, even while we see elementary schools say they need to take inequitable donations to renovate as if there had never been a facilities bond (that could have been enough to rebuild most of the school buildings in the district new if the money had been better spent).

Again, you can only cover the gap between reality and PR for so long. The suicides themselves should have been a wake up call much earlier. The CDC preliminary study showed that of the factors associated with mental distress and suicidal behavior in the 12 months prior, missed school was a big one, and illness-related absenteeism was the biggest one in Palo Alto - a far bigger factor that sleeplessness-related absenteeism - and Palo Alto fared worse than any of the districts compared in that regard. Given the high SES of the students, that's a big fat warning signal that the facilities are not as new and healthy as administrators claim. (The paper trail of parents and staff trying to get this fixed going all the way back to before the facilities bond approval should have been another, but I'm sure that's one "data set" the CDC will never hear word one about.)

Here again, the PR only covers up for so long when people whose kids have asthma or miss weeks of school because of pneumonia or flu or migraines talk to their extended networks about the stress or even pressure to repeat a grade their students experience (rather than support) when they come back. Administrators thinking they can get away with attacking "the weakest of the herd" has serious negative implications to the district's reputation that will resonate for a long long time even after problems are solved - and there's no sign of those problems even being honestly addressed at the moment. In response to the CDC's report, McGee's newsletter only made vague promises of looking into the issue (of illness-related absenteeism) and making it seem like the problem is just maybe a little souped up truancy problem. If only you make sure to send your kid to school more, they will be protected. (Here's a clue: kids are already going to school sick in order not to miss work, that's part creating the problem, encouraging more of it will only make things WORSE.)
Web Link

Here again, real estate professionals should be concerned about truth and reality coming together. Take a page from corporate playbooks: When corporations make big mistakes (intentional or not), coverup only delays and amplifies the problem and the pain. Telling the truth, admitting mistakes (to themselves and the public), and doing what it takes to make things right - that is the only path to restoring trust. Our district has a number of employees going back to the Skelly years who consider their professional backsides too valuable to ever allow that. The negative implications are like ripples (and toxins) from garbage thrown in a lake (to hide it). Real estate professionals should care about that.

On that score, probably one of the biggest hits to the reputation of the community was the district relentlessly slamming parents after the suicides in order to point fingers away from themselves. Before then (and I speak from experience as a parent) Palo Alto - deservedly so - had a reputation in parent circles as one of the most welcoming, intelligent, and open communities of parents in the Bay Area. My own experience bears that out. This did so much for increasing the desirability of our schools and community. But administrators who didn't want to be called to task practically mounted a smear campaign during and after the suicides. Who wants to move to a community that doesn't have any community? Problems with the school facilities, fiscal management, administrators, even special ed - those can be fixed, so it's better to sincerely shed light on and fix those as thoroughly as possible. But you can't just fix a bad social environment. So there again, the people who cared about our school district's "brand", rather than the people and solving the problems I think did a terrible disservice to the community and its reputation. (Prioritizing the "brand" eventually led to administrators' having too much power to protect their own backsides, even using hundreds of thousands of dollars in district legal fees to arguably protect themselves at the expense of the schools interests.) Allowing this to continue will do a number on the perceived desirability of Palo Alto homes for years to come. (Parenthetically, In the actual suicide data reported by the CDC, in Palo Alto "family relationship problem" was NOT one of the precipitating factors.)

Palo Alto also used to have a reputation as a place of greater economic and other diversity relative to rich communities on the Peninsula. All the self-interested NIMBY-baiting to push development has both resulted in the kind of development that has pushed out that diversity (especially low-income residents) AND given Palo Alto a bad reputation as being nothing but snot-nosed billionaires (which is definitely not my side of town where the most well-represented profession of my neighbors is education).

Restoring Palo Alto as a place where you can raise your kids surrounded by a warm, innovative, intelligent, welcoming community, have easy access to amenities (rather than having your blood pressure go up in stop-and-go traffic day in and out), where you don't have to constantly fight to avoid having tall buildings grow up around you with zoning laws treated like nothing, where you can have relationships with long-time family shops, where the school district treats everyone with respect and honesty and will innovate to meet the needs of its students --

Look at that again. That was Palo Alto 10 years ago. Now, I think I just described Los Altos. The outcomes of not dealing with THAT are coming -


1 person likes this
Posted by Jerry Underdal
a resident of Barron Park
on Aug 13, 2016 at 12:14 pm

Jerry Underdal is a registered user.

"The paper trail of parents and staff trying to get this fixed going all the way back to before the facilities bond approval should have been another, but I'm sure that's one "data set" the CDC will never hear word one about."

Two years ago a petition was circulated calling on the district to meet national environmental safety standards. I was told that several hundred residents, including some officials had signed it. I assumed that it would be submitted to the superintendent and board and prompt a district-wide debate over the health concerns mentioned above. So far as I know, it was not delivered. Is this correct? If so, why wasn't the petition delivered when it could have increased pressure on the district to prioritize remediation measures addressing internal air quality and other environmental factors that affect student wellbeing? Online complaints are easy to ignore, a petition is not.


6 people like this
Posted by Get Smart
a resident of Barron Park
on Aug 13, 2016 at 2:41 pm

@ Jerry Underdal,
Do you mean this one?
Web Link

Did you sign it?


"Online complaints are easy to ignore. Petitions are not."
Au contraire. I think petitions are pretty easy to ignore because the public has no lever in individual school district matters like they do in other arenas of life and politics. Public input is mostly a matter of satisfying appearance rather than to genuinely look for ideas or consider differing views and input. The district modus operandi is to ignore complaints they don't want to hear, and if there is a petition, give the appearance of listening. Regardless of how you feel about Mandarin Immersion, the five years of hoop jumping they were treated to until Grace Ma got fed up and threatened a charter is par for the course. The elementary textbook petition effort that netted signatures from a fair percentage of all elementary parents got them nowhere.

The most petitions will get you in the appearance of a hearing. I can't think of any petitions with this group of administrators or district culture that changed anything at all, with one exception, and in that case the district was cornered. They seem to be willing to change if a petition is signed by a lot of doctors and it's a hot-button issue where they are already sitting on a garbage-filled lake. I can't remember the exact issue now - epipens? Putting epipens in schools instead of only using the ones students have a prescription for and bring in themselves. In that case, dozens or maybe hundreds of doctor parents signed a petition. Why did they have to sign a petition? The district nurse had already testified in a contested special ed court case that the district had epipens everywhere and she knew this because she trained staff. I will leave the irreconcilability of those two statements to your imagination, but I promise you, the reality of this district's politics are far worse than anything you will imagine. Parenthetically, shortly after that petition, the district did indeed adopt the epipens (kind of strange since they claimed in court we had them) and the doctor-parent who spent more time than anyone collecting those doctor signatures moved to Los Altos.


4 people like this
Posted by Get Smart
a resident of Barron Park
on Aug 13, 2016 at 2:45 pm

Oh, sorry, to answer your question. I think the petitioner took a lot of serious personal flak for trying to get the district to deal with those issues and got hounded out of the district by nasty administrative and staff politics. You might be able to send a message through that link.


5 people like this
Posted by Get Smart
a resident of Barron Park
on Aug 13, 2016 at 2:54 pm

To my knowledge, you can find a longer paper trail than that. I'm told there are expert reports that advised the district to do those same things from before the clusters. (I may be wrong but I don't think they ever hired THAT expert again.) The facilities bond promised those things going back to previous parent complaints and actions, I'm told. I've heard numerous teachers and some staff complain over the years though who knows how well they pursued those complaints.

If it's a health and safety issue, it shouldn't have to take a community petition, anymore than if someone tells you the school bus brakes aren't working that you wait for a petition of complaint from parents to fix it. I think the things the petition was asking for were already promised in the facilities bond anyway. The real question is: since they had the money and the specifications to do it, why didn't they? Why does the Superintendent's message sound like this is the first time anyone heard of it? The community needs strong leadership to right the ship, not more hubris that the ship can never sink.


6 people like this
Posted by Palo Alto peak has passed
a resident of Another Palo Alto neighborhood
on Aug 13, 2016 at 6:13 pm

Of course, I could be wrong, but I do think the peak has passed. It is late summer, which is normally a slower time. True...but still something feels different. There are more houses coming out, taking longer to sell, fewer multi-offers, more price cuts, more contingent offers. Not sure if this is seasonal...in Burlingame, real estate is still pretty hot, with sales prices above list. North Los Altos seems relatively hot compared to Palo Alto as well. Both those other areas have good schools all through high school, like Palo Alto. Seems like people are starting to choose other cities over Palo Alto. Obviously, everyone wants the best for their children, and hearing about suicides and school stress is on their minds when shopping for houses. Also, there is an increasing lack of diversity in Palo Alto schools. Having lots of different races can be great, but when you start having greater than half of the class being Asian (Gunn is getting there), then it is no longer really diverse. Alot of people, many Asians included, may feel reluctant/intimidated to go to a school where the racial distribution is so skewed. The sense of competition at these schools is downright scary, and even Asian parents want to protect their kids from suffering.


7 people like this
Posted by Get Smart
a resident of Barron Park
on Aug 13, 2016 at 6:29 pm

I don't think any of that is true. First of all, PA schools are about a third Asian. This is lower than some parts of Cupertino and Saratoga where the housing market is still plenty hot. Secondly, "Asian" covers a pretty diverse group of people. Palo Alto is very international, which is actually quite wonderful. Have you ever been to a school international potluck? It's amazing.

If anything, we are seeing the chickens come home to roost for years of district mismanagement, poor treatment of families (at least not the uber wealthy ones), not tending to important planning that could have made us the envy of the state, coupled with aggressive development that has ruined the quality of life people used to pay a lot of money to get here.

This is not rocket science. Vote in City Councilmembers who prioritize civic duties like safety, schools, quality of life, the environment, health, and restoring some balance to the office park/resident imbalance by reducing the office park burden (which is far less damaging that high-rise housing in a place without the infrastructure). Make sure PAF didn't ruin the Comprehensive Plan (real estate agents: pay attn!).

And put some work into pushing for a far better, more efficient, HONEST, leadership in PAUSD (i.e., clean house). McGee might of worked but you know what they say about one bad apple. The bunch was already spoiled, what did people think was going to happen when to put in the new guy?


2 people like this
Posted by Get Smart
a resident of Barron Park
on Aug 15, 2016 at 9:35 am

@Jerry Underdal,
I'm told I missed replying to a big misunderstanding in your post.

"calling on the district to meet national environmental safety standards"

That's a misunderstanding apparently. There are no national standards. Not even for OSHA. There are no laws because there are no standards. There are no standards because it turned out that hard research to set them found that analytical testing was unhelpful for finding even serious problems. If you can't use testing, you can't enforce standards. So the research apparently focused on what did allow identification of problems affecting health of people using the environments and best practices to prevent the problems. There are well-researched best practices, based on consensus among environmental scientists and consensus-level research, and that I am told is what the district has been advised by its own hired expert to adopt (but they dud not) and by that petition, and was specified to be addressed by the facilities bond but wasn't. Those best practices are proven by consensus level research to reduce illnesses and illness-related absenteeism in schools. District officials have apparently been told this repeatedly but rejected advice to do anything about it.

Now that preliminary numbers show that illness-related absenteeism is the dominant absenteeism factor and that PAUSD was worst of all the districts surveys, we will see if the administration digs in on its arrogance and mistakes and commits more damaging CYA, or if they finally just learn how to own a mistake and make things right for the sake if children's lives. What the district does now will affect students beyond just their tenure at local schools. Hopefully community advocates will start to care, too. It'snot looking good, I saw the letter McGee posted, it sounded like he's treating it like kids are just being needlessly truant. The Weekly should really talk to parents whose kids lost a lot of school to illness in the last few years. How were they treated? What caused stress? Now that it's clear what a huge factor this is in suicidal behavior, and that Palo Alto is so strongly impacted, hopefully the district will change its tune.


2 people like this
Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 25, 2016 at 9:12 am

Has anyone reading real estate news also been reading school news? The elementary enrollment projection was down by 80 students but it was actually down by 200 students. Just this year. People used to sacrifice to get into the schools, the schools were the reason Palo Alto had fairly stable prices through downturns relative to other communities. Between overdevelopment ruining the quality of life and allowing the schools to go through years of propping up a reputation while behaving badly, we face a problem that will be difficult to fix once the chickens come home to roost.

The community needs to care about this or the mismanagement of our schools will not only continue to let down many if our students, it will hurt the stability of the market and tax base that supports the schools.


17 people like this
Posted by Nothing Lasts Forever
a resident of Midtown
on Aug 25, 2016 at 9:34 am

Nothing Lasts Forever is a registered user.

I have noticed that sellers are lowering their asking prices. I have seen several " for sale" signs with " price reduced" across them. This hasn't happened in years--usually the houses get more than the asking price.

However, the central banks of China have made it much more difficult to borrow money. China has been hemorrhaging money to the tune of trillions of dollars per year. Most of this money has gone to real estate investments in the US, Australia, Europe, and Canada.


9 people like this
Posted by OPar
a resident of Duveneck/St. Francis
on Aug 25, 2016 at 7:18 pm

Good. I'm a homeowner, but my house is obscenely overpriced according to Zillow.

School enrollment down? Good. The school's have been bursting at the seams and their quality has eroded as a result.

Less interest from foreign buyers? Good. Empty houses aren't good for a community. Let's get people who want to be part of the community. If houses are on the market, it gives people who can't pay all cash a chance to get into the market. Maybe a few of the families who have been renting for years can finally buy here.

Then maybe rents will fall a bit and we'll have fewer Downings excoriating us because we don't high rises in a town with a small grid.

The market *should* cycle.


2 people like this
Posted by OPar
a resident of Duveneck/St. Francis
on Aug 25, 2016 at 7:32 pm

Get Smart,

PAUSD is more than a third Asian and has been for several years. White enrollment dipped under 50 percent in 2011, at which point Asian enrollment was at 36 percent. I'd guess that it's around 40-45 percent now. Of course, it plays out differently at different schools--as might be expected, the elementary schools, overall, have a higher percentage of Asian students than do the upper grades. There's also a bit of a north/south divide.

I don't think it's an issue of white flight, per se; more an issue of who's willing to pay the most to buy in.


5 people like this
Posted by Bob McGrew
a resident of Menlo Park
on Aug 25, 2016 at 9:57 pm

@Get Smart - The elementary school enrollment decline has an obvious explanation - one that I've lived through. Five years ago was just when prices really started to rise. My wife and I had our first child in Palo Alto and put him in a Palo Alto daycare. Most of the other families with babies at our daycare also had kids in Palo Alto daycare.

But when we needed more space for our second child, we had to move out of the triplex. We looked at condos, but there just wasn't supply. We looked at housing prices, but even on our incomes it was just too much. We ended up moving to Menlo Park, where we were and are happy with the neighborhood and the schools.

More or less everyone who had a child in the daycare class with our son has moved out of Palo Alto by now for the same reasons. It's just too expensive for families in their thirties and early forties just starting out, unless you happened to win the IPO lottery. (Which is great for those friends of ours who did and who still live in Palo Alto!)

I've never (ever!) heard any young parents complain about "overdevelopment". Most, like us, would have preferred to stay in the town they had made their home. For that matter, most of the other families we know in Menlo Park wish it had an exciting downtown like Palo Alto does.

The elementary school enrollment is just declining because housing prices for single-family homes are out of reach for young families nowadays and there aren't really any condos on the market.


4 people like this
Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 26, 2016 at 12:23 am

@Bob McGrew,

That just sounds like a PR bit to justify a PAF perspective. Menlo Park has always been more expensive than Palo Alto and has less housing and less development, and a smaller residential population. There is nothing cheaper, except the housing over by 101 which has always drawn bargain hunters, that's nothing new, but that housing is older and has not expanded.

You have missed any data about Los Altos, for example, which is far more expensive, doing far less building, but seeing more demand. Your justification completely falls apart.

People have been hearing the smears against Palo Alto parents - how do you fix that? Who wants to live in a community without community? People hear the rankings but see the suicide problems or hear the real way people are treated by the schools from friends. People are afraid to invest in a community this expensive if they don't expect to send their kids to the schools through high school. People see that PAUSD is that last place able to innovate because of its ossified and pernicious (and expensive) administrative culture. Ironic that there is a private school fair being advertised just beside the article, many of them new. Homeschooling is on the rise, too, as are homeschool private school hybrids. Kids get a lot more done while leading more normal lives without the overhead of school. D Tech is already oversubscribed - people are searching. PAUSD is not the place to find it and giving no indication it will be.

It used to be Menlo was known for lower school but not high. Now PAUSD is seen as inferior to Menlo Atherton. Real estate professionals need to wake up to how damaging is exactly that kind of false narrative about development.

The young family that just moved in across the street hates the traffic and spends no time downtown because it's not the family friendly place it used to be and it's such a drag to get there and park.


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Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 26, 2016 at 12:26 am

Or maybe, we could go with the really obvious, since Palo Alto has been through many short-term price runups during booms and this is no different, with all the same complaints about affordability. This time, however, we are seeing the results of the loss of desirability because of the traffic and overdevelopment, coupled with out-of-control school mismanagement for too long.


1 person likes this
Posted by Bob McGrew
a resident of Menlo Park
on Aug 26, 2016 at 8:55 am

@Get Smart - I'm just sharing my own personal experience in the hopes that other people understand what it's like for young families in Palo Alto nowadays. If I wanted to mount a "PR campaign to justify a PAF perspective", I don't think the comments section of a real estate article in the Weekly would be my first choice. :)

Certainly, when I've looked for houses, both in 2012 and 2015, I found that Menlo Park was substantially less expensive for the same quality of house, by about a third. My other friends who have moved from Palo Alto to Los Altos told me that they moved because it was cheaper. When I looked at buying in 2012, my realtor told me that I should really think about Menlo Park and Los Altos in my price range, and that it was highly unlikely I'd find a house in Palo Alto. So I'm not really sure where you are coming from that these other communities are more expensive.

I'm glad to hear that there's a young family who was able to move in across the street from you. It's unfortunate that they don't like to go to downtown - my family and many of the our friends who live in the Willows and in Linfield Oaks go there regularly. There's lots of family-friendly options, from Sancho's to Gyros Gyros to SliderBar (small hamburgers are perfect for kids!) to Crepevine to the Creamery.


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Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 26, 2016 at 10:40 am

@Bob McGrew,
So ... Palo Alto has had more building and Los Altos less, yet you say Los Altos has magically become cheaper than Palo Alto.

Aside from that fact that it is not true that you can get a Los Altos home for cheaper than Palo Alto, that hardly makes your point, does it? It also hardly makes your point about Menlo, since the residential market in Menlo is so much smaller. I can point to lots of building in Palo Alto, where exactly has been the comparable amount of building in Menlo that has driven down SFH and condo prices! Again, the facts belie your contentions.

I also didn't suggest you were mounting a "campaign", just sharing something that sounds like a PR bit from PAF who is in an all out myopic froth to densify Palo Alto regardless of the negative consequences. (Do you know what "parroting" is?)


1 person likes this
Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 26, 2016 at 10:43 am

I can point to lots of building in Palo Alto. Where exactly has been the comparable amount of building in Menlo that has driven down SFH and condo prices? Again, the facts belie your contentions.


(My mobile device and .i apologize for the correction.)


9 people like this
Posted by Agree with Bob
a resident of Menlo Park
on Aug 26, 2016 at 11:16 am

Our experience in local house hunting (2000, 2006, 2011) is similar to what Bob McGrew describes. I think there is a real estate premium for a Palo Alto address; comparable (other than location) properties have been cheaper in Menlo Park and Los Altos for some time.

Shh Bob don't tell folks or they'll want to move to Menlo . . .
;-)


26 people like this
Posted by PA vs MP price fiction
a resident of another community
on Aug 26, 2016 at 11:23 am

Get Smart wrote:
"Menlo Park has always been more expensive than Palo Alto"

Excuse me, but with all due respect, this is definitely incorrect.

Menlo Park average price, July 2016: $2 million (source: Web Link )

Palo Alto average price, July 2016: $2.5 million (source: Web Link )

(click on the Zestimate details to see a graph of home pricing over the years)

You may be right about the amount of housing construction in Palo Alto vs Menlo Park, but that's a non sequitur; housing prices in Palo Alto are substantially higher.


1 person likes this
Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 26, 2016 at 6:12 pm

The one disturbing thing is that the trend in Los Altos is still mostly upward, in Palo Alto, downward.


3 people like this
Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 26, 2016 at 6:13 pm

Having been in the housing market over a much longer span, alll I can do is remind you of the saying There's lies, damned lies, and statistics.

If we're talking about the supply and price of comparable single-family homes, Menlo has always has a smaller supply and slightly higher price. If you want to get into the market, yes, Menlo has been better because of the much more reasonably priced Willows neighborhood and that area by 101 that is a lot like East Palo Alto, with a lot of really small homes. (Unfortunately also higher crime at times.)

The best thing to do is look at a much more comprehensive set of data compiled by a local real estate agent by city:
Web Link

Since the data can vary a lot, it's better to look at the charts over time. Lately, it shows all of Los Altos, Palo Alto, and Menlo Park having a similar range of $2.5-3M in average/median sale prices (approximate)

Number of homes sold in the last month was Los Altos 30, Palo Alto 40, Menlo Park 30.

Days on the market for Palo Alto and MP was 20 but Los Altos was 10, mirroring my experience with friends.

Price per square foot varies so much, it's not really useful, but monthly MP was 70, PA was 60, LA ~60.

Quarterly average sizes of the homes sold was fairly comparable, in the just oer 2,000 sq ft size, but that's pretty approximate.

Lot size was considerably higher in Los Altos than either MP or PA, but higher in MP, so you get more land. No surprise there.

Age was all 50ish years.

The max and min price of homes for the quarter was quite diferent.
Los Altos: Max $7-10 million lately
Min $1.1-1.6 million lately

Palo Alto Max $4-10 million
Min $1.4 million

Menlo Park Max $7 million
Min $ 700,000

So, not surprisingly, you can get an old low-end house in Menlo Park for a price that is fairly comparable to similar neighborhoods in East Palo Alto nearby. But there don't seem to be many of those because the low end didn't seem to alter the median prices much.

More relevant to your own search:
Median Townhouse prices:
For Palo Alto and Menlo Park, the recent data show approximately $2million for townhomes, for Los Altos, $1.8million.

The minimum average price of a townhome in Los Altos was 1.2M, Palo Alto ~1M, and MP ~1M. No great difference there.
The maximum average price o a townhome in Los Altos was ~1.8M, Palo Alto ~2M, Menlo Park ~3M.

Menlo had a considerably higher tier of maximum price for townhomes but was not cheaper at the minimum. Because the median is so similar between the three, the maximum was probably skewed by a very small number sold, so at least there, I'll grant you what looks like a far higher max price in Menlo Park probably doesn't mean much.

Conclusion relevant to your post:

The # sold in each town was less than 10 in all cases, so, no large number of townhomes are being built or sold in Menlo Park compared to Palo Alto, i.e., no large exodus of people from Palo Alto to Menlo Park, no market-skewing cheaper homes, etc. The condo data tell a similar story. The data for Los Altos may be skewed by the large development by Whole Foods that was bought up by Stanford in its entirety, they may have gotten a slight discount, although I do not know if I am correct on the timing. Given the volatility of the averages because of the wide range in costs and low turnover, it's hard to draw any conclusions.

Based on these data, the housing markets in Los Altos, Palo Alto, Menlo Park appear pretty comparable. Neither of us was right relative to very recent data. Your main contention, the townhouses in Menlo Park are more available, being sold in greater quantities, or cheaper, is completely incorrect. There does appear to still be room at the lower end of the older SFH market, almost certainly in the area near 101 of very very small homes. (Which has always been the case.)


4 people like this
Posted by Get Smart
a resident of Another Palo Alto neighborhood
on Aug 26, 2016 at 10:58 pm

The data also indicate that contrary to her public assertion, using my bank's affordability calculator, Kate Downing could easily afford a condo, townhouse, or starter home in Palo Alto, Menlo Park, Mountain View and Los Altos, even with some other debt. I wonder why such a correction is not part of such an assertive statement.


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