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Announcing Dreyfus Sotheby’s International Realty

We are pleased to announce that Dreyfus Properties has partnered with Sotheby’s International Realty®. Since our founding in 2000, we have developed a reputation for exceptional local knowledge, a high level of service and the utmost integrity. As Dreyfus Sotheby’s International Realty, we can now also offer the advantages of a global realty network and the resources of an internationally recognized luxury brand.

With the strong tech economy, a robust Peninsula housing market, and steep rise in foreign homebuyers,the timing is right for this new affiliation,. Our team has witnessed a large increase in interstate and international buyers in the heart of Silicon Valley. In regards to this trend, Dreyfus Sotheby’s CEO and Broker, Michael Dreyfus said, “There’s a 50% chance the buyer will be in Palo Alto, and 50% chance that the buyer is international.”

With this new partnership, our agents are building global referral networks with other top agents nationally and internationally, in addition to continuing their robust local marketing efforts. “In a market that too often thinks provincially, it’s imperative to realize there’s a much bigger picture out there,” said Dreyfus.

“Our clients now can benefit from the Sotheby’s International Realty brand’s global marketing initiatives and media partners that can showcase our listings to an international audience,” Dreyfus said.

Sotheby’s International RealtyÒ has been expanding rapidly in recent years despite turbulence in the housing markets. With a focus on expansion into Asia and throughout the Pacific Rim, the global network now comprises more than 38,000 exclusive listings represented by over 13,000 sales associates in 631 branch offices throughout 49 countries and territories around the world.

Dreyfus Sotheby’s International Realty currently operates offices in downtown Palo Alto and Menlo Park. “We are connected to the fiber of our community. The pace of our market places a high demand on our agents to be both extremely knowledgeable in the nuts and bolts of what they do, savvy in technology and perceptive of diverse world cultures,” said Dreyfus.

To best position our clients in one of the hottest, fastest moving markets in the country, we need to stand out on the web and connect with buyers around the globe. “Everybody’s on the web, but where are you on the web? There’s only one top of the page,” said Dreyfus. “Sotheby’s online marketing platform gives our listings better visibility.”

We’ve combined the best of both worlds for our clients: a nimble boutique with big company resources. “We’re like a startup that just got funding,” said Dreyfus. “To serve our clients, we now have big company resources for tools and functionality, and a SEAL team agility in a collaborative environment.“

Palo Alto’s New Homes, August 2

And just like that, August is upon us. This is likely to be the last big week of inventory until September comes rolling around. This week we saw a lot of property starting to come out for sale in South Palo Alto, along with a wonderful property in Professorville and some great newer construction in Midtown. See below for this week’s new homes:

3238 Waverley Street – 6 Bedrooms | 4 Bathrooms | 3,737 SF House | 6,250 SF Lot | $3,198,000. Newer construction in Midtown. The floor plan on this home is really well suited for a large family. Happily, I found the design on this newer construction to be nicely laid out rather than cramped in certain areas. The living room has a really nice feel to it, and the kitchen is top notch. My only complaint, which is impossible to fix, is that the house feels extremely large for its lot size.

1560 Mariposa Avenue – 3 Bedrooms | 2 Bathrooms | 1,900 SF House | 6,000 SF Lot | $2,180,000. Charming home in Southgate. I love this neighborhood, as all the houses seem to have their own bit of character. This home is no different. Although on the smaller side, this home has a reasonably large lot for this particular neighborhood. The surfaces could all use some modernizing, and the kitchen felt cramped to me. One thing to keep in mind with this neighborhood is that there is definitely noticeable noise from the train, and some noise from Alma does get through.

3949 Park Boulevard – 3 Bedrooms | 1 Bathroom | 1,228 SF House | 6,678 SF Lot | $928,000. Older home with an Eichler-esque feel to it. Park Boulevard is an interesting street because sections of it are not so nice, and other parts are wonderful. This particular section of Park Boulevard is the nicer part. The home itself has some obvious work to do, from removing the wood paneling which prevails in the property to re-landscaping certain spots. The biggest drawback of this home is the family room which is obviously a conversion. Since the living room is quite large, that room feels unnecessary and detracts from the open but cozy feel of the home.

3553 Alma Village Circle – 3 Bedrooms | 2.5 Bathrooms | 1,754 SF Unit | $245 per Month HOA | $1,798,880. This townhouse feels like a home. I liked the layout on this new construction, but the complex itself is somewhat of a cramped complex. The layout on this unit flows well, but the unit feels very basic in the way its spread out. The upstairs bedrooms are sized fairly well, but the third bedroom could have been larger. Buying one of these units is somewhat of a gamble given how press the units have received during their construction.

125 Hawthorne Avenue – 2 Bedrooms | 1 Bathroom | 1,306 SF House | 5,340 SF Lot | $2,000,000. Older, but well updated home in the Downtown North neighborhood. Although the home is definitely livable, the real money in this property is in the zoning. I would check to see if there is a historical rating on this home with the city and then look to develop the property. The lot is on the smaller side at 5,340 SF. The home itself appears to be well maintained, but at 77 years old, make sure to pick at the disclosures.

4211 Rickeys Way #A – 3 Bedrooms | 2.5 Bathrooms | 2,214 SF Unit | $299 per Month HOA | $1,548,000. I really like the way this complex was built, and think these units are wonderful. This particular unit is one of the larger floor plans in the complex at 3 bedrooms, and the location within the complex is solid. The first floor feels a bit small in the living room, but the kitchen is well set up and flows well. The upstairs bedrooms are not bad, but the bathrooms are on the smaller side. The HOA on this complex is, from my last recollection, a strong plus. The pricing feels big to me, but given the size, it will be interesting to see where it sells.

2577 Louis Road – 2 Bedrooms | 1 Bathroom | 1,162 SF House | 10,783 SF Lot | $1,798,000. Palo Alto’s funkiest kitchen in a nice starter home. One of the obvious draws to this property is the lot size, but the home itself has its own charm. As an expansion project, it would be a good option. Most of the home is fairly dark, and given the age of the home, it might be an interesting project to update the wiring. For a smaller home, the layout is well thought out to maximize the family room and bedrooms. Unfortunately, the kitchen space and bathroom space suffer for it. This home will be a nice purchase for someone looking to expand an older home, or build new.

850 Loma Verde Avenue – 3 Bedrooms | 2 Bathrooms | 1,561 SF House | 6,019 SF Lot | $1,425,000. This home would be a great option for a young couple looking to entertain groups. The layout of the home is not bad, but feels disjointed in several places. The big sell on this property is that the backyard is sizable given the orientation of the home on the lot. The remodel on this home was pretty quickly done, but all the right things were updated. Pick it up soon and you’ll still have time to barbecue for Labor Day!

251 Lincoln Avenue – 5 Bedrooms | 2.5 Bathrooms | 3,400 SF House | 7,880 SF Lot | $3,800,000. Very neat, older home in Professorville, one of Palo Alto’s premier neighborhoods. I absolutely loved this home. The home could use some contemporary updates, but for the most part, I like that the remodeling did not diverge too far from the home’s older feel. The bedrooms in this home are all well sized, and although there aren’t many bathrooms in this home for the number of bedrooms, the are unique. The lot size on this home is also larger, so there is ample space in the backyard (but it could be landscaped differently). If you’re in the market for a larger home in Professorville, I would jump on this because it won’t last long.

3198 Fallen Leaf Street – 4 Bedrooms | 4 Bathrooms | 2,340 SF Unit | $131 per Month HOA | $1,385,000. If you don’t mind stairs and some freeway noise, this unit is fantastic. It’s well sized and designed to maximize open spaces while embracing a modern feel. Young professionals will find this home an excellent option. Given the number of bedrooms, the space is also flexible and could work for a family. My only real complaint is the kitchen layout, which feels somewhat jarring given how it’s placed in the unit. I would have opened it up a bit more so that the flow would improve.

937 Ilima Way – 4 Bedrooms | 2 Bathrooms | 1,850 SF House | 6,038 SF Lot | $1,785,000. Well updated rancher home on one of Barron Park’s premier streets. Personally, this is my favorite street in Barron Park. this tree-lined street is a wonderfully friendly and charming section of the neighborhood. This particular home is well updated, and they did a nice job updating the kitchen so that you can look out the front window. The bedrooms are fairly small on this home, but they work. Although the countertops have been updated, more work will likely be done to update the bathrooms and flooring in some areas. This home will make someone a wonderful family home.

424 Homer Avenue – 5 Bedrooms | 3 Bathrooms | 2,200 SF House | 3,920 SF Lot | $2,875,000. I’m often asked how it is possible to charge so much for a home of this size. Think about it this way: if you were to live across the street at the Woodmark, you’d be paying a similar amount for a similarly sized condo, and also paying almost $800 per month in HOA Dues. With that in mind, this particular home is well sized and has a ton of bedrooms. The main problem is that most of the living spaces feel small. This is likely because the main priority seems to be adding bedrooms rather than open spaces. This home is currently being used as a duplex, but would be very easy to convert back to a single family home.

715 Charleston Court – 6 Bedrooms | 2.5 Bathrooms | 2,830 SF House | 8,918 SF Lot | $2,198,000. Nicely sized home and lot in South Palo Alto. For a larger family, look no further. This home has room to spare and the sixth bedroom is an anomaly. I really liked the layout and the backyard’s configuration. The way the pool is set up makes it a benefit for entertaining groups. The location is nice, although there is a lot of commercial use properties nearby. I especially liked the kitchen set up, which was obviously designed with family meals and watching children in mind. Altogether a great property for a larger family.

Palo Alto’s New Homes, July 19

It’s officially tear down special week for North Palo Alto. More than 20% of the homes this week were tear down properties in Palo Alto. Given that we’re nearing the August lull in new properties, expect things to slow down after next week. As for this week, there are a few good purchase options. See below for this week’s new homes:

1525 El Camino Real – 2 Bedrooms | 2 Bathrooms | 1,458 SF House | 5,250 SF Lot | $1,279,000. Nicely sized and surprisingly tucked away home in Southgate. I couldn’t believe how tucked away this home was for being located on El Camino. Another big surprise of this home was the how well sized it is. Although it only has two bedrooms, they are both very well sized. The layout is also generous and makes the property feel like a bigger home than it is. The major downside to this home is the lot size. The backyard is all decking and garage, which is a bummer. The house itself would make a nice starter home for a young family.

1486 Dana Avenue – 3 Bedrooms | 2 Bathrooms | 1,782 SF House | 11,160 SF Lot | $3,198,000. Tear-down property. This property displays the power of photography for making homes look good. Take a look and you’ll see what I mean. Not an altogether bad option if you’re looking to build, as the location/lot are both solid.

561 Lytton Avenue – 3 Bedrooms | 3 Bathrooms | 1,425 SF Unit | $97 per Month HOA | $1,735,000. Nice unit with a very modern look/feel. I liked that the property was able to fit three bedrooms and three bathrooms so close to downtown, and with dues that low, I’m sure this property will be popular. I did not like the layout of the master bedroom or other two bedrooms. The shape of the lot for these units made the bedrooms feel small and narrow. The downstairs is well set up, and the unit feels very trendy. I would have preferred a wider unit, as this unit and 563 Lytton both felt cramped at times.

563 Lytton Avenue – 3 Bedrooms | 3.5 Bathrooms | 1,425 SF Unit | $97 per Month HOA | $1,735,000. See 561 Lytton review.

4050 Verdosa Drive – 3 Bedrooms | 1 Bathroom | 1,132 SF House | 6,930 SF Lot | $1,199,000. What, another tear down? Yes, it’s true. This home could definitely be expanded for a new buyer, but it’s being priced and set up as a tear down house. There is a lot of land on this particular property, so there is the potential to build something very nice. Given how far back on Verdosa this property is, the price makes it an enticing option.

3657 Bryant Street – 3 Bedrooms | 2 Bathrooms | 1,755 SF House | 6,111 SF Lot | $1,495,000. One of several lot value homes this week. Fortunately, this one was cleaner than the others. You could remodel this Eichler home, but given that it’s been expanded, I would honestly tear down and build new.

3150 Greer Road – 3 Bedrooms | 2 Bathrooms | 1,458 SF House | 6,000 SF Lot | $1,399,000. Good family home on Greer Road. Yes, the home is on Greer and gets some road noise. However, the home itself is well suited for a small family. Proportionately sized rooms and living spaces are a big plus to this home. I liked the layout of this particular property, and the way the bedrooms are situated works really well for a family with young children. The remodel work on this home was well done (one of the best remodels from a home on tour). The backyard was the highlight of this home. There are some nice concrete spaces which would be nice for entertaining, but enough green space to make the backyard feel private and peaceful.

277 Bryant Street – 2 Bedrooms | 2.5 Bathrooms | 1,320 SF Unit | $484 per Month HOA | $995,000. After seeing the photos online, I couldn’t wait to tour this property. Perhaps my expectations were too high, but the property didn’t quite live up to the photos. The big positives to this unit are that the unit is located downtown, has some nice open spaces, and has been updated to feel modern. With that said, the kitchen needs new countertops and the laminate floors have a few bends in them already. The basement is a really neat feature of this unit, but the washer/dryer are there, which means carrying laundry up two floors. If you’re looking to live downtown and want a starter unit, this would be a fairly good choice. Expect it to sell for around $1.1M or slightly over that.

383 Maclane Street – 3 Bedrooms | 1 Bathroom | 1,050 SF House | 5,600 SF Lot | $1,188,000. Starter home on the edge of the Ventura Neighborhood. You can’t really go wrong with this home if you’re looking to buy your first property in Palo Alto. Although the home and lot are small, the three bedrooms and solid schools make it a nice option to start a family. Unfortunately, the layout on this particular home felt fairly disjointed for me, and the kitchen felt small and dining area was, well, claustrophobic. The upgrades throughout the home are a nice touch, and if you can overlook the small spaces, this could be a good purchase.

789 Encina Grande Drive – 5 Bedrooms | 3 Bathrooms | 2,691 SF House | 7,590 SF Lot | $2,438,000. Larger family home on one of Green Acres’ best streets. I love this particular street. Some call this section Barron Park (incorrectly) because there are no sidewalks. Debate aside, this particular home has some nice features. I liked the sizing of the bedrooms and the open feel to the kitchen. I would consider a remodel to most of the surfaces in the home, namely countertops, cabinets, and reworking the bathrooms (one more bathroom in this home would be a big value add). I loved the backyard, and with the larger lot on this property made the open spaces feel impressive. A really nice family home, in a solid family neighborhood.

440 Cesano Court #311 – 1 Bedroom | 1 Bathroom | 1,103 SF Unit | $445 per Month HOA | $549,000. What a difference living a bit further south in Palo Alto makes when looking at condos. This particular unit is a light remodel away from being something special. Although only a 1 bedroom, this unit has lots of space and a killer living room. I liked the set up the bedroom, and there is ample space for an office. Altogether, this home will make a fantastic purchase for a young individual or older couple.

455 Oregon Avenue – 3 Bedrooms | 2 Bathrooms | 1,851 SF House | 7,150 SF Lot | $1,895,000. In my opinion, this home was the best of tour for today. Although the home is located near Oregon Expressway and does get a fair amount of street noise, the layout of the home and serene feel given off by the front landscaping make the home feel welcoming. Inside, the layout flows fairly well with a nice sitting area, dining room, and separate kitchen. The bedrooms are well sized, and the backyard feels very private. There is some potential to remodel, but the home is definitely turn-key. Located in Old Palo Alto, this home will make someone an excellent first home or family home.

365 Forest Avenue #3B – 3 Bedrooms | 2 Bathrooms | 1,695 SF Unit | $525 per Month HOA | $1,299,000. Neat complex with large, single level condominiums. This particular unit follows a similar floor plan to the others in the complex which means two oversized bedrooms, a smaller bedroom, and well sized living spaces. I liked the remodel work with this particular unit. The upgraded kitchen and well updated bathrooms make this unit a great choice for an individual or couple looking for downtown living and some elbow room.

1210 Newell Road – 3 Bedrooms | 1.5 Bathrooms | 1,176 SF House | 9,555 SF Lot | $1,998,000. It doesn’t seem that way from the initial photo, but this house is a major tear down. I’d wear gloves inside. Take a good look at the lot. It’s large but longest around Newell Road rather than Parkinson Avenue. This would mean a home would mostly be facing Newell, the busier street. Be careful walking in the backyard if you have flip flops on; I found a lot of nails, a sledgehammer, and a few pieces of broken glass.

Q2 Menlo Park East of El Camino Real Market Update

As a long-time resident and real estate agent specializing in Menlo Park properties, my neighbors often ask me, “How’s the market?”

This question can have vastly different answers according to the year, the season, and sometimes even the month in which it’s asked. I’m an optimist by nature and I always like to believe that the market is great. It’s wonderful to have the data to back me up.

For example, let’s look at the area of Menlo Park that’s east of El Camino Real, located between El Camino, Encinal Avenue, 101, and San Francisquito Creek. This area includes the following neighborhoods: Linfield Oaks, Felton Gables, Park Forest, Seminary/Vintage, Menlo Oaks, The Willows, Suburban Park, Flood Triangle, Lorelei Manor, and North Fair Oaks.

While the number of sales in this area remained about the same, in Q2 2013, the median price of a home rose to $1,250,000 compared to $1,025,000 in Q2 2010. That’s an 18% increase!

And while prices were rising, the number of days that a property stayed on the market has been cut in half—from 35 days in 2010 to 18 days in 2013. In the world of real estate with inspections, appraisals, loan approvals, and other steps involved before closing escrow, that is lightening fast!

Maybe most interesting is that although prices and demand are high, inventory is at its lowest point in three years with only 79 properties for sale during this time. In contrast, there were 102 properties on the market in Q2 of 2010.

As we enter the dog days of summer and interest rates start to creep up, we’ll most likely see a shift in the market. Things will start to slow down as buyers tire of the frenzy of the spring market and go on vacation.

If you’re a buyer, now might just be the perfect time to get serious and make a move while other buyers are lounging in the sun with a fruity drink. You’re likely to see less competition and fewer multiple offers on the house you want.

If you’re a seller, things are still in your favor. Inventory is low and demand is high. Although it might not be a bidding war bonanza, prices will stay stable and you’re still going to get a great price for your house.

Q2 West Menlo Park Market Update

For the third year in a row West Menlo Park has seen a phenomenal upswing in home valuations (West Menlo Park consists of the Central Menlo, Allied Arts/Downtown, Alpine Road, Sharon Heights and University Heights neighborhoods). The West Menlo markets median sales price has grown 29% from $1.8M in second quarter of 2012 to $2.4M in the second quarter of 2013. This is a $525,250 increase in the median sales price. The increase in prices is astounding, especially considering where our market was at the beginning of 2009. Yes, our market was not hit as hard as the rest of the country but we did feel the down turn.

What is driving this price trend? Lack of inventory, historically low interest rates and demand, the answer is yes to all the above. Year after year, the number of homes for sale in West Menlo Park has declined 15%; we have seen an 11% decline in homes sold and an 18% decline in homes under contract. Demand, however is through the roof. So, the market has only one direction to go and that’s up. The real estate world on the Peninsula did not follow the downward spiral felt in other parts of the country. The Peninsula’s outlook remains bright, thanks to continued low interest rates, the boom of healthy technology companies, the influx of new jobs, and a steady increase in the stock market. I anticipate this price trend will continue into the next quarter and beyond.

June 2013 Market Update Videos

Check out our market update videos. Our market videos are updated every month for 50 Mid Peninsula cities and neighborhoods with the latest inventory and sales trends.

The Glass is Full

The Spring real estate market sales activity continued with an upward trajectory for all of our local markets. However, in June we saw the beginning of the end for all-time low interest rates. Announcements by the Fed of a strengthening economy and the reduction of its bond buyback program triggered an uptick in the Treasury yields, which pushed interest rates off of their all-time lows. During the last 2 weeks of the June, the 30-year fixed interest rate bounced between 4.5% to 5% in comparison to sub-4% rates during most of the first half of the year.

As expected, the Palo Alto market continues to clear most of its inventory within 7-10 days on the market especially in the sub $3 million price point. Menlo Park and Los Altos also continue to witness high demand for the sub-$3 million properties. However, both cities are starting to feel a slight slowdown in the luxury market. Homes priced north of $3 million may now offer an opportunity for price negotiation, especially with more than 60 days on the market.

The common denominator across all of the mid-Peninsula cities, from Mountain View to San Carlos, is the high demand of first time homebuyers looking to purchase properties between $900,000 – $1.5 million. These buyers are often dual-income with young children (or have kids on the mind). They are looking to move down from San Francisco or out of a rental property. We are witnessing a “glass is full” phenomena: these buyers are priced out of Palo Alto and Menlo Park, since these cities rarely offer properties in this price range anymore. They are now happily expanding their home search to include the surrounding cities of Mountain View, San Carlos and Redwood City, where properties are more affordable but still offer close proximity to lively downtowns and easy access to their places of employment.

What remains to be seen is what effect, if any, the rise in interest rates will have on buyer demand. Since the majority of these first time home buyers need mortgage financing to purchase a home, it is this group that is most sensitive to interest rate fluctuation. Over the past few months, we have received feedback from buyers that they have become accustomed to homes selling for $100K-$200K over the asking price. This has discouraged them from pursuing houses. If there are fewer buyers chasing houses due to the interest rate hike, buyers may have a renewed opportunity to pursue houses that they previously had felt were out of reach.

Palo Alto’s New Homes, June 28

In anticipation for the 4th of July, I think many sellers held back this week. Expect more of the same next week. After that I think we’ll see a nice push with more inventory. See below for this week’s new homes:

858 Lathrop Drive – 4 Bedrooms | 2.5 Bathrooms | 3,146 SF House | 18,960 SF Lot | $2,389,000. ELIGIBLE STANFORD FACULTY & STAFF ONLY. A very neat, angular house with lots of space. I liked that the home has seen some updating, as many of the Stanford homes need work. Although the kitchen update gets the home modernized, the countertops make the room appear dark. The bedrooms are well sized, but I think having a bedroom that close to the communal areas was a strange move. The library is neat. I should also mention that the view from the back deck is nice, but not over the top.

1527 Castilleja Avenue – 2 Bedrooms | 1 Bathroom | 1,189 SF House | 6,000 SF Lot | $1,200,000. Priced at lot value. These cottages are ripe for a tear down project, and this home’s standard sized lot make it a nice choice to build on. The interior is not in terrible shape and the layout works, but the size makes the home feel cramped at times. Either plan to heavily remodel and add on, or build new.

3206 Waverley Street – 5 Bedrooms | 3 Bathrooms | 2,640 SF House | 6,300 SF Lot | $2,498,000. Large, fairly new home in Midtown. Expect this home to sell well over the listing price. The layout is familiar to those who have seen new construction in the area. Big spaces, a spiral staircase, and a big backyard are the main features of this home. The kitchen has a nice open feel to it and the way it’s set up makes it feel bigger than it is. The crown molding throughout is a nice touch. The master bathroom was underwhelming to me, as it has a sharp feel and a smaller corner shower. Altogether, this home is a fantastic option for a large family who likes to entertain.

3127 David Avenue – 2 Bedrooms | 2 Bathrooms | 1,389 SF House | 6,656 SF Lot | $1,525,000. Eichler-esque Mackay home in south Palo Alto. This home will need some work. The kitchen, bathrooms, and backyard could all use some updating, and with this style of home, you’ll want to take a careful look through the disclosures. The layout is a bit nicer than most Eichlers and kept with the Eichler feel of big windows for natural light, but the bathrooms still felt very small.

3491 Janice Way – 4 Bedrooms | 2 Bathrooms | 1,659 SF House | 7,000 SF Lot | $1,498,000. Larger Eichler on a really nice, quiet street. Standard Eichler 4 bedroom floor plan with the bedrooms on one side with a master suite and one bathroom off the hallway. There have been some nice updates to this home like the flooring, but there’s still a lot that needs to be done. The lot size is on the larger size at 7,000 SF, and I think there’s a good value for the price with this home if you’re willing to do some remodeling. Don’t expect it to last long on the market.

3149 Stockton Place – 3 Bedrooms | 2 Bathrooms | 1,402 SF House | 6,000 SF Lot | $1,298,000. Cute cute cute! This house has undergone a fairly extensive remodel and definitely shines because of it. The spaces are all decently sized, and the home’s positioning on the lot allows for a large backyard. Although the kitchen was nothing exciting, I have to say this home was impressive for the size. As is typical with this agent, the property has been priced well below market value, so expect the final sale price to be higher…likely above the $1.4M mark.

2898 Louis Road – 2 Bedrooms | 2 Bathrooms | 1,015 SF House | 5,315 SF Lot | $998,000. Small starter home or investment property on Louis Road. If you like corner lots and don’t mind a small home or street noise, this home may be a strong purchase. Priced as a starter home at lot value, this property was somehow able to pack two reasonably sized bedrooms and bathrooms into a small home. The closet space definitely suffered, but altogether not a bad choice for the price. A good alternative to a condo.

889 Federation Way – 1 Bedroom | 1 Bathroom | 822 SF Unit | $354 per Month HOA | $499,000. Starter condo in South Palo Alto. The unit itself is quite nice. I think the Altair complex did a good job designing their units to create a nice open feel. This unit, although only 822 square feet, feels big due to the large living room and open kitchen. The dues in this complex are not very high, and the complex offers a lot of solid amenities for the price. I would call this a strong first time buyer purchase.

3540 La Mata Way – 4 Bedrooms | 2.5 Bathrooms | 2,500 SF House | 11,250 SF Lot | $1,850,000. Older home on one of my favorite streets in Barron Park. The home itself is quite large but has not seen much updating since its construction in 1963. However, the backyard and front yard are all nicely maintained and shine. The over-sized, 11,250 SF lot allows for more building, and in Barron Park, you can add a basement if you decide to remodel or add-on. This little street is a gem, and you should definitely take a look at this home as its layout and big spaces make it a wonderful option for a family.

Do Rising Rates Mean Falling Prices?

Newsflash. Mortgage rates are on the rise, hitting above 4% last week for the first time in more than a year. Gone for now are the all-time-low 30-year fixed-3% rates that had us all running to our brokers to refinance in 2012.

How are these rising interest rates going to effect the housing market?

The short answer is: Not the way you might think.

Logic seems to dictate that rising mortgage rates would bring the cost of real estate down iin price because sellers would need to make their home prices affordable to buyers paying higher mortgage rates. Historically, however, this has not been the case. According to Yale economist and S&P/Case-Shiller Home Price Index guru Robert Shiller, “There is not a tight fit at all between the two: high mortgage rates do not translate automatically into low home prices.”

The reasons for this seeming illogic are actually pretty logical, especially when you apply them to real estate in the boomtown of Silicon Valley. Rising mortgage rates typically signal an improving economy, resulting in higher wages and rising inflation. People are earning more, so they can afford to spend more on their homes.

Another reason home prices don’t necessarily come down with rising interest rates is that sellers are simply not always prepared to bring the cost of their home down. Whether they can’t afford to or are unwilling to take a loss, most homeowners are going to buy another home after selling theirs. When they do, they’re going to be stuck with higher interest rates just like you, and we can assume they don’t want to buy a lesser home than the one you’re hoping to buy.

With this in mind, if you find a home that’s right for you, I would suggest that you refrain from refraining. Don’t wait around for rising interest rates to bring housing prices down. It’s not going to happen. Since 2009, besides one brief three-month blip, average monthly 30-year fixed mortgage interest rates have been at or below 5%. This is completely unprecedented: average rates never even hit 5% prior to 2009. So what we consider “rising interest rates” are still pretty darn low. And historically, once interest rates are on the upswing, they swing up quickly.

If I haven’t put a spring in your step yet, here’s another newsflash. The Case-Schiller index reported this month that house prices have returned to 2003 levels across the country. This combined with a robust local job market and a bullish stock market mean we are even less likely to see local housing prices go anywhere but up.

I absolutely stick to my golden rule that you should let the house, not the market, decide for you when making a home purchase — in other words, don’t buy a home you have serious reservations about because you feel like you just have to buy something. But if you do find a home that is right for you, act now. By waiting for a downtick in the local real estate market, you might just wait yourself into a market with higher housing prices, higher interest rates, and possibly even lower inventory as rising interest rates create a flurry of buying activity.

Palo Altoâ€™s New Homes, June 21

It appears that the summer season has arrived. Inventory is finally starting to stabilize near 10-15 homes per week, so we can expect a reasonable inventory for the next month or two of the season. With interest rates on the climb, it will be interesting to see how home prices and inventory respond. Keep in mind that you can receive this weekly write-up in your inbox by signing up here.

For this week’s new homes, see below:

OFF MARKET - 3 Bedroom | 1 Bathroom | 6,500 SF + Lot | Barron Park. Starter home in Barron Park on a really nice lot. Home needs some remodeling, but given the depth of the lot, this could be a nice property for someone who isn’t afraid of a home addition or remodel. Keep in mind that Barron Park is not in a flood or earthquake zone, so you can build a basement.

OFF MARKET - 2 Bedrooms | 2 Bathrooms | Downtown Palo Alto. Totally remodeled two bedroom condo walking distance to downtown Palo Alto. Ground level unit. I really liked the oversized master bedroom and fireplace. Dues on this unit are on the higher end, but the complex is nice.

325 Channing Avenue, #110 - 2 Bedrooms | 2 Bathrooms | 2,052 SF Unit | $770 per Month HOA | $2,175,000. Ground floor unit in one of the most sought after complexes in Palo Alto. This is one of the larger units, and the floor plan has a really nice flow to it. One of the features which may detract from the property a bit is the staging, which I think took away from the overall look of the unit rather than adding to it. The bathrooms and bedrooms both have a nice size to them. I’m not a huge fan of the kitchen layout, but it’s better than most of the units in the complex. The pricing to me is feels big, but not entirely out of reason for a unit in this complex on the first floor.

101 Alma Street, #902 - 1 Bedroom | 1 Bathroom | 1,307 SF Unit | $617 per Month HOA | $599,000. Simply put, the pricing on this is well below market value. Although I’m not a big fan of this particular complex for most people, it is hard to argue the pricing for a 1,300+ SF unit on the better side of the building, and on the 9th floor. The unit is original, but seems to be well maintained. The flow on this unit is a little funky, but definitely workable. Keep in mind the higher dues in the complex when looking at the unit.

130 Iris Way - 4 Bedrooms | 3 Bathrooms | 2,500 SF House | 6,600 SF Lot | $2,780,000. Brand new construction in a busier section of the Duveneck neighborhood. What I like best about this home is that it is a no frills home with a lot of usable space. The Craftsman style home has a really nice back patio, and a solid flow on the first floor. The build used nicer materials, but nothing flashy. The four bedrooms are well sized and the downstairs has a nice open kitchen. If you’re a family looking for a very usable and easy floor plan, this is a great option. Be aware of the noise from Embarcadero, which you can hear from the backyard.

2031 Park Boulevard - 4 Bedrooms | 3 Bathrooms | 2,447 SF House | 7,500 SF Lot | $2,175,000. Park Boulevard is a really interesting road in Palo Alto. The home prices on this street run the gambit from high end to more modest pricing depending on which part of the street the home is located on. This home is located on what could be considered the best block of Park Boulevard. Some aspects of this home, like the bathrooms, feel dated, but the bones of this home appear solid. There is a fair amount of dead space throughout the home, so it felt small for the size. A nice backyard makes this home a nice property for someone looking to live near California Avenue. Be aware of the train noise, which is sporadic but consistent throughout the day.

2105 Birch Street - 2 Bedrooms | 1 Bathroom | 1,128 SF House | 5,000 SF Lot | $1,199,000. This home is priced for lot value. The floor plan is nicely laid out for a 2 bedroom, but given the lot, this home would benefit from an extensive remodel or rebuild. I’m not entirely sure the rebuild will be worth the cost if and when the purchase price exceeds $1,250,000. This is a tricky house, and will be interesting to watch.

239 Matadero Avenue - 3 Bedrooms | 2 Bathrooms | 1,244 SF House | 7,100 SF Lot | $1,268,000. Located in the Ventura neighborhood, this home was quickly remodeled to sell. The floor plan is workable but there is a lot of work to be done to the home. It is very likely that this home will be sold to either a developer or a first time home buyer. Take a stroll through the neighborhood with this home in mind, and be aware of the train noise in the area.

556 Saint Claire Drive - 4 Bedrooms | 2 Bathrooms | 1,600 SF House | 6,500 SF Lot | $1,498,000. This home is just begging for someone to come in with a vision and do a fun remodel. The layout and bones of this home have a lot of potential. I especially liked the brick fireplaces and exposed wood ceilings. I have seen some really nice remodels utilizing those two elements recently, and this home is asking for it to be done. The home itself does feel small, and two of the bedrooms felt undersized to me.

40 Christine Drive - 5 Bedrooms | 4 Bathrooms | 3,232 SF House | 8,309 SF Lot | $3,098,000. Fairly new home built by James Witt. Usually we see James’ construction in Barron Park and Green Acres, but he went further south to build this property in 2005. I liked the layout, but the home felt tired and boxy to me. The rooms have high ceilings, which is a nice touch. Although the kitchen is open, I think it was laid out poorly. The range hood cramps the space, and I feel it should have been incorporated elsewhere to keep the space feeling open. the 4th and 5th bedrooms felt small, and the fifth bedroom was too small for a queen bed to fit comfortably. The backyard on this home is definitely impressive, and will likely be what sells the home.

879 Clara Drive | 4 Bedrooms | 3.5 Bathrooms | 2,183 SF House | 6,000 SF Lot | $2,488,000. Fairly basic floor plan but a really nice layout that would work well for a growing family. The kitchen area is modern (the home is only 7 years old) and does a good job flowing into the dining area. I like that the builder designed bigger bedrooms rather than cramming a fifth bedroom into the property. These bedrooms are all well sized and usable. The lot is a standard size, so the backyard is a nice size but nothing extraordinary. The location of this home makes for some light street noise in the backyard, but was not noticeable in the home.

3502 Arbutus Avenue - 4 Bedrooms | 3 Bathrooms | 2,183 SF House | 12,240 SF Lot | $1,988,000. A very Eichler-esque home in South Palo Alto. This particular property looks and feels a lot like a standard Eichler, down to the bedroom and bathroom layout. The galley style kitchen of the Eichler homes has been changed to more of an enclosed kitchen, but the large windows, exposed beams, indoor/outdoor feel of the living room all remain intact. The home has seen some updating, but there is still a significant amount of work to be done to the flooring and kitchen area. The lot size on this property is spectacular, and since it’s a pie shaped lot, much of the space is in the backyard.

3797 Ross Road - 3 Bedrooms | 2 Bathrooms | 1,247 SF House | 6,500 SF Lot | $1,299,000. The exterior paint scheme of this property pretty much sums it all up. The interior is cluttered, so it may be hard to get a feel for what this home could be. You’ll need to make some changes throughout the home or rebuild completely, which is how the pricing was derived. The backyard is nice, but for a slightly over standard sized lot that far south in Palo Alto, the price feels right at market value.

3197 Louis Road - 3 Bedrooms | 2 Bathrooms | 1,535 SF House | 6,500 SF Lot | $1,299,000. Given the type of remodeling done to this property, I’m guessing it was a rental before being sold (big, cheap tiles in the kitchen are typically a dead giveaway). I think this home could be a cute starter for a family with one, or maybe two children. The bedrooms are not in bad shape and you could, if needed, move in now and remodel later. Louis Road does get some street noise, but this is nice little property for the price. With that in mind, I feel it’s definitely priced below market value.

886 Ilima Court - 4 Bedrooms | 3 Bathrooms | 2,075 SF House | 6,000 SF Lot | $1,828,000. Large home for the lot size in Barron Park. I liked that the home has seen some updates as of recent. The bathrooms, floors, and kitchen all look nice and clean. The home itself is about as big as you can get on a standard lot, but it is situated towards the back of the lot so the backyard feels a little small. The bedrooms are all well sized, and the master suite is a nice value add on this particular home. The price on this home feels right, if not a little bit low. This might sound strange, but this property has a garage which will make a lot of weekend warriors happy.