Atherton is finally joining the party, with significant increases of 6.4% on the average and 11% on the median from the same quarter last year. At the same time, inventory has decreased 35% from last year. Even more significant are the high-end private market sales which started in this quarter and have carried into the next. The average sale price is now 45% over the horror of Q4 2008 and only 15% off the pre-crash levels of Q3 2008.

Lindenwood
The average sale price leapt up 12% as higher end homes started moving. Inventory levels have stabilized after a glut in 2009 and 2010. Relocation buyers are driving the market.

Lloyden Park/Central Atherton
The bottom dropped out of the stats as the only movers were in the under $2,000,000 market. Over $3,000,000 is still a tough sell in Central Atherton. Maybe the last spot for great value.

West Atherton
Boom goes the pricey neighborhood. Average and median prices rose 29% and 31% respectively as buyers snapped up the extremes of the market. Homes in the $7m to $10m range are piling up a bit, but the entry level and over $10m markets are hot, hot, hot, as buyers are willing to pay for perfect or squeak into the neighborhood and live next to it.

West of Alameda
Sales of under $3m ranchers gave way to sales of move-in homes in the $4m-$7m range as the median price jumped a staggering 111% from the same quarter last year. Relocating buyers looking for move-in homes helped push things along. 

Menlo Park (west of 101) took a bit of a rest from a sizzling spring and summer as third quarter median prices dipped 8.8% off the 3rd Qtr 2010 and 6.6% off last quarter. Cautious buyers coupled with a 33% drop in inventory from the previous quarter caused the slowdown. In addition, Menlo Park moved closer to Palo Alto in the no-longer-a-bargain category, and anecdotally, we see Buyers checking out the weaker markets both north and south as options to paying full freight in Menlo Park.

Allied Arts. A preponderance of lower end deals dragged the numbers down for Allied Arts as the average dropped 5%. The median however performed nicely with a 15% increase from Q3 2011. Empty nesters coming into the neighborhood continue to put strong pressure on the demand side.

Alpine Road Area. One sale in this little corner of Menlo Park.

Central Menlo. Essentially flat from last quarter, Central Menlo shows a dip in the median of 9.5% from Q3 2010. Inventory, however is at its lowest point in the past 3 years and early sales in the 4th quarter point to all systems go.

Felton Gables. No sales in the third quarter for Felton Gables

Linfield Oaks. Only two sales so the entry level one at $1,025,000 messes with the numbers a bit. Still no inventory with a 13 days supply.

Menlo Oaks. In a flop from last quarter average prices dropped slightly while the median jumped up 21% from the same quarter last year. Buyers see value here and are driving the entry level higher.

Sharon Heights. Average and median prices rose over the previous quarter, but are still off 2010 numbers as the absence of sales at the higher end of the neighborhood continues to be reflected in the statistics. Inventory popped down a little, but remains high when compared to last year.

University Heights. After a good run, things leveled off in unincorporated Menlo Park. Sales remain solid and inventory even.

The Willows. Finally a breather in the Willows long bounce off the bottom. Sellers pushing their prices a bit much with dreams of facebook buyers may be causing some of the slow down.

Suburban Park/Flood Park. With the slow down in the Willows, the Flood Park area takes up the torch of hot neighborhood. Buyers looking for value and strong neighborhood dynamics drove the median up 19% over last year.  

The Old Palo Alto neighborhood is definitely very active as evidenced by the number of potential buyers touring this home last weekend. There is strong demand and low supply in north Palo Alto. This home sold with three offers and another similar home sold “off-market” in Professorville this same week. If you’re looking to buy in North Palo Alto, now is the time to stay on top of the market for potential upcoming opportunities!

SOUTH PALO ALTO
Incredible interest rates are starting to affect South Palo Alto, with a nice 5% rise over last years average prices. On top of that inventory dropped nearly 40% from the previous year. Multiple offers continue to be common, although that is more a function of marketing choices rather than a reflection of a super-heated market. South Palo Alto neighborhoods include Green Acres, Barron Park, South Palo Alto, Midtown, and Ventura.

Barron Park
A reduction in the average and median sale prices was accompanied by a dramatic uptick in sales with 8 in the neighborhood versus only 1 the year before. Average days on the market was a low 26 days.

Green Acres
THE hot neighborhood. Laughing at seasonal fluctuations that seem to affect other mere mortal neighborhoods, Green Acres posted its 5th consecutive quarterly increase in prices with this quarters average and median coming in a stunning 71% and 60% over Q3 2010. All this has been done while also having a steady rise in the number of homes sold. If you’re thinking of selling in this neighborhood, run don’t walk.

Midtown
An uncharacteristic drop in reliable Midtown’s values from the same quarter last year, masks the steady consistency of values in this popular neighborhood. Inventory is off 38% from the previous year forecasting continued stron performance for the neighborhood.

South Palo Alto
Median sale price rose while average price fell as interest rates helped the entry level part of the market the most. Inventory remains low, off 44% from the same quarter last year. Days on the market before sale dropped to 14, the lowest level in several years.

Ventura
Still climbing up, Ventura posted its third consecutive rise this year with a 2% and 3% rise in average and median sale price. Inventory ticked up a bit from the previous quarter, but is down a startling 61% from the same quarter last year. 

In the face of all the stats that we throw around, it is always interesting to take a look at what, we in the biz, call Apples to Apples sales.  That is, the sale of the same home in similar condition across different time periods.  1344 Tasso, Palo Alto  is located in the always-hard-to-find-a-house neighborhood of Professorville.  It is 5 bedrooms, 4 baths and measures 3,453 square feet.  The MLS listing can be seen here http://matrix.mlslistings.com/DE.asp?ID=321570547.

The sales history of the house is a snapshot of the last decade of residential real estate in Palo Alto.  Purchased for lot value at $435,000 in 1997, the newly built home was sold in late 1999 at an unkown price off a list price of $2,495,000.  Given what was going on at the time, it was most likely a sale substantially over list price.  It was offered again for sale at the peak of the dot.com market in early 2000 for $3,800,000.  It didn’t sell.  Sensing new weekness in the market, the home was dropped to $3,350,000  and finally sold in August of 2000 for $3,275,000.

This is where the story gets interesting.  The home was subsequently offered for sale for $2,795,000 in June of 2001, $2,595,000 in October of 2001 and failed to sell at $680,000 (over 20%) off its 2000 peak price.  Like all good residents of the Valley during our busts, the owners decided to wait this one out and six years later, in 2007, brought the home back on the market for $3,385,000.  That proved a bit ambitious, but a year later they got the sale done for $2,875,000.  Not the peak 2000 price, but not the bottom they had faced in the early 2000′s.

And what timing they had.  Because a mere six months later on September 15, 2008, Lehman Brothers went down and the national residential real estate market went with it.

So here we are, 3 years later, with the economy still in the doldrums and our protaginist is for sale again.  The sale price: $3,050,000.

What?  Higher than the 08 peek? Yep, 6% higher.

Now, our Dreyfus Properties local stats, isolated for North Palo Alto, tell us that the average and median prices for the third quarter of 2011 are down 21.5% and 16.9% respectively compared to the the third quarter of 2008.  But our apples to apples tells a different story and suggest an interesting market trend.

Well located, move-in houses in Palo Alto are in high demand and are selling at prices above the last peak in the real estate market.  These are the homes that often forecast market moves.  They are the first homes that buyers are willing to “advance” off previous prices and they are the first homes to dwindle in inventory when the market starts moving.

So buyers for these premium neighborhoods, bad news; you missed the boat.  You will pay more than before the bust and all signs point to that more being even more next year.  Good news?  It’s still cheaper than 2000.