The two new ones on Hawthorne

Once again, David Solnick has outdone himself with another contemporary masterpiece (actually two of them). The only negatives would be the proximity to Alma and, honestly, I prefer the 2nd level on the front unit and the first level on the back unit--two bad they couldn't have just done that with ONE unit :)

I also think they are priced too high....

But who cares about all that! If you want to see an outstanding contemporary design check out both of these this weekend at the open house.....

A new one at The Abitare and Solnick's 2 New creations on Hawthorne

They are shooting for $955 a sq ft for the new one at the Abitare on High Street. That's an absurd number. David Solnick's two new contemporary creations are open this weekend. I can't wait to see them Friday on tour, his architectual designs are breath taking. Both of those units are listed for $1,998,000, approximately 2000+ sq feet. Anyway, really looking forward to seeing both of them despite their proximity to Alma....

Keeping track of "days on the market"

It's something to pay attention to for obvious reasons. We don't have any pending condo sales in downtown PA right now so let's look at how long everything has been on the market:

325 Channing #106 --28 days

498 Fulton --7 days

800 High #407-- 34 days

800 High #206 --7 days

117 Emerson -- 6 days

457 Homer-- 196 days (this one could stay on till the end of time at this price)

548 Everett-- 21 days 

500  Fulton --26 days

766 University- 111 days

1327 Alma-- 96 days

545 Fulton --40 days

101 Alma #603-- 27 days

Several of these are seeing their "DOM" start to pile up (and the newer listings are NOT going to be selling quickly, trust me). That means one thing: they are priced too high and buyers are not going to be paying these list prices. As we enter into the Spring market we will see the market begin to sort itself out.....

the new conforming load rate has been raised and is on the way!

Finally, it’s official that the $729,750 conforming loan limit will return to the BAY Area!!  Direct from the ASF, “The American Securitization Forum (ASF) clarified that GSE and FHA loans originated in 2009 in amounts between $625,500 and $729,750, pursuant to the increases in loan limits enacted by the stimulus package, will be eligible for delivery into the TBA market subject to the existing de-minimis limits for superconforming loans to borrowers in high-cost areas.”  Don’t you just love the way that the ASF writes their statements?  Before we all start submitting loans, however, the systems do need to be updated and pricing needs to be established.  This process will likely take at least a month, and manual underwriting will likely be required for loans between $625,500 and $729,750, as this allowance expires at the end of 2009.  Stay tuned!

pricing your unit by $/sq foot--it's a decent rough estimate

I've had a few emails the last couple of days from sellers asking how to price their unit by $/sq ft, specifically what number should they use. I don't use price per sq/ft as a measure of existing single family homes, there are too many variables to factor in (lot size, location,age,  condition of home, etc...), but this is a fairly reliable measure for any newer condo since the condition of the units were all in the same condition when they were built (and they are all the same age). Older condo buildings are a little more difficult to price out if you are just using $/sq foot as a measure but it's still a decent measure.

Last Spring we had a lot of sales so it is fairly easy to come up with an average of what units were selling for per square foot. In buildings built around 1980 (and there were a lot of these built in downtown PA around that time), remodeled units were selling for around $770 a sq/ft. Units in need of upgrades in the similar aged buildings were selling around $710 a sq/ft. There were exceptions of course and I threw out the high and the low sales. But, those were the numbers I would use if I was pricing something out LAST SPRING. 

If you live in a building built around 1980 you should use a number that is less than the 2 I quoted above since our market has declined since last Spring. How far it's declined is still anyone's guess since we don't have any recent comps to use. You would be safe in taking off at least 10%....

If you don't live in a building built circa 1980 and want to know the numbers for your specific building or something close to it, please contact me and I will be happy to pass it along...

condo inventory and sales in downtown PA

Something for you sellers to keep an eye on: We've got 14 condo listings right now in downtown PA--It's important to see what happens with these as it relates to sales price per sq foot. Last Spring, a remodeled unit in downtown PA was going anywhere from 770 a sq/ft to high 800's a sq/ft (in the newer buildings). 

Right now, if you take away the high and the low (and substract the two listings in the 55+ Byron building) you are looking at sellers trying to get around 750 a sq/ft for their units. However, until we start seeing some actual closed sales we won't know if that's the right number. I know several sellers who are looking for some comps that they can "grasp on to" to get a better handle on what their unit is worth TODAY. It doesn't do them any good to look at what units sold for last Spring. 

As I said, let's pay close attention to what these 14 listings do. Several are starting to see their "days on market" pile up. Will we see some sales? Price drops? Stay tuned....

New Construction coming Up on Hawthorne

Anyone who appreciates the contempory design appreciates the dramatic creations of David Solnik. He has projects sprinkled all over North PA and his latest work will be coming up soon on Hawthorne Avenue (he has another project on Hawthorne that was finished in 2006). I understand that the current project will be two separate 3 bedrooms/2bath units, tentatively scheduled to be listed for $1,900,000 each. We will see what the public thinks of that list price. His finished product is always worth a walk through, especially if you are into contemporary construction. 

Let's talk about Downtown PA dinner spots!

Hi--I know this is a little random for a condo website blog, but I got an email from someone in NY who is moving out here and they specifically wanted to know where the best place for a "Valentine's Dinner" might be. I sent him back a response but thought I would post some of that here too, in case there are others from out of town who want to know more about downtown nightlife!

There are many, many resturant choices in downtown PA but here would be my top 3 "Valentine Dinner" restaurants:

1) Osteria-- this is a Palo Alto staple, they've been open for at least 20 years (or as long as I can remember). The food has an Italian flavor to it, the best dish is probably the chicken piccata. It's quaint, small, good date spot.

2) Evvia-- this is a probably my favorite restuarant in Palo Alto in terms of just reviewing the food. The atmosphere is much louder than Osteria, and it's more expensive, but you cannot beat the food.  If I had to describe the food, Id say it's a mix of Greek and Italian. There isn't one thing to reccommend, it's all good.

3) Lavanda-- It's really more of a wine bar--- if you are just going out for a drink this is a great spot. The atmosphere is nice, the employees fall over themselves to make sure you are happy. It certainly qualifies as a Valentine Evening spot. The food is good, if not spectacular. 

Periodically, I get emails from people around the country wondering about different aspects of Palo Alto and I think I might use this blog to educate those who don't live here on the finer details of our city......

the four bedroom at High St just had a price reduction

It was listed for $1,398,000 and they just dropped it to $1,298,000. Great unit. 4 bedrooms (1638 square feet) at that price is a bargain. Unfortunately, that building is dealing with some buyer uncertainty over the proposed "Affordable housing" project that I blogged about earlier in the week. 

taking a look at January closed sales.....

The numbers are in and they aren't pretty. Because we are just looking at 1 month i decided to pull the stats for all of Palo Alto single family home sales to give us the broadest look at what the real estate market is doing in our area. Here are the median sales prices for the last 5 January's:

2005: $1,275,000

2006: $1,198,000

2007: $1,348,000

2008: $1,800,000

2009: $1,372,000

If you want to see an example of an area dealing with a ton of foreclosures, look no further than East Palo Alto. Median sales prices for the last 4 January's:

2006: $675,000

2007: $606,000

2008: $468,000

2009: $255,000!

They have double the number of average sales while doing half the volume. East Palo Alto is a prime example of the fallout from the predatory sub prime lending market.....

Follow up with the Environmental Impact Report that relates to the proposed "affordable housing" project

I am having some technical difficulties reposting the exact document in a way that fits into the blog template. Here are the "high" points: The project will consist of two buildings over approximately 1 acre of land along Alma between Homer and Channing. The main project is the Alma Family Affordable Housing built over approximately 16374 sq feet--5 stories. 49 units. The lower level will be commerical space. The secondary project will be for Seniors, built over approximately 6424 sq feet. The project will also include a reconfiguaration of Homer Avenue and the adjacent alley. This report identified that "the project would have significant impacts in the areas of transportation, noise, air quality (construction), hazards and hazardous materials, hydrology and water quality, and biological resources". 

Of course, any 5 story building should be a concern for downtown Palo Alto residents and businesses. 

There will be a public meeting to review this Environmental Draft Report and it is tentatively scheduled for March 18th, 2009. 250 Hamilton Avenue. 

The Downtown Low Income Housing Project --800 High Street Owners BE AWARE!

We've just received the Environmental Impact Report for the Alma Street Mixed Use Project. This is the housing project that will run along Alma between Homer and Channing. I'll go over the details of this document tomorrow after I check into a few things with the planning department but it's important to note that the project plan is for FIVE stories (previously we had heard it would be three stories). More details forthcoming....
PS--I am having some technical difficulties posting the Environmental Report but will re-post the document in it's entirety sometime tomorrow in the am.
...Craig

Didn't have any new condo listings this week but....

...there was definitely some new inventory in North Palo Alto. Again, I will just say that many of these agents are not appreciating the current state of the market with many of their list prices.  Was that diplomatic enough? I'm not trying to call anyone out but I know what the vast majority of buyers are thinking and feeling TODAY and I suspect their will be many, many pontential buyers this weekend walking through open houses with their arms crossed shaking their heads (collectively)....

If you are in the mood to see some truly unique new contruction go take a look at 1030 Hamilton (LISTED FOR $7,950,000). Every room, in fact every turn in that house, had amazing "old world" detail (and remember this is brand new construction). It's simply spectacular, in my opinion. Huge lot (16,500 sq feet), not the best location on Hamilton. It's priced around 1500 a sq foot which is absurdly high but honestly I don't see how you put a list price on something this unique. The right buyer is out there for this house and when they seen it they will come along and pay to get it....

Should you list your house with the agent who gives you the highest list price?

I hope we all know the answer to this is a resounding "NO". Many agents will give a seller a high list price just to get the listing knowing that very likely they will be dropping the list price within a month. Unethical? Yes. Does it happen? All the time. Pricing your home too high, especially in today's market, will ultimately result in you leaving money on the table. Obviously this goes both ways, you don't want to list your home too low either. It is critical that your agent know what the market is doing TODAY. Honestly, my opinion is that many of them don't. My advice to you is to interview at least 3 agents before you decide who to list your home with. Make sure you pay close attention to the marketing plan that they present to you. It is critical that your agent have a plan that is specific to your unit. By the way, the key word there is "plan". Too many agents think selling a home is about sticking a sign in front of the house, inputing it into the MLS and they're done. If the agent you are interviewing doesn't have a marketing plan specific to selling your home, thank them for their time and show them the door.....

Tour tomorrow and a follow up with a pending sale

There are several new listings in North PA on tour tomorrow. I don't think some of the list prices we are seeing are accurately reflecting where the market is NOW.  A couple of weeks ago I said we should pay close attention to what 1730 Guinda did--it's a 3/2, 2000+ sq ft home, 7000+ lot, nice location, listed for $1,698,000--that's a lot of house/lot/location for the money. Frankly I was surprised that it didn't go right into contract but I do know that there were several people interested in it and it did go into contract yesterday. That's a good example of what's happening right now--qualified buyers are circling and circling but many of them aren't ready to pull the trigger.....

What Buyers are Faced with Today....

As I noted earlier, most lenders in many cases are now requiring 30% down and near perfect credit. This requirement can vary depending on the size of the loan and the purchase price. While we've come a long way from the "sub prime 100%" finanacing days, the pendulum seems to have swung a little too far the other way.

We saw the 4th Q of 2008 drop nearly 20% in areas of Palo Alto. Taking a $1,500,000 home, this would lower it's value to $1,200,000. Seemingly good for a buyer. But they need MORE MONEY down now than they did if they were going to purchase the home at $1.5 million! Today, to buy a $1,200,000 home they would need $360,000 down. Previously, a buyer would have likely needed 20% down and on a $1,500,000 purchase that would have been $300,000 down. Couple this with the fact that many buyers share a perception that our market still has a drop left in it, and you can see why we are seeing a very stagnant market in Palo Alto across the board. We've got 5 closed sales in North Palo Alto since December 1st, 2008. Ouch. 

Sales Prices are all over the map

There are 2 more closed sales in North PA. New construction on Seale sold in a week with 2 offers. It was listed for $3,498,000 and closed at $3,625,000. On the other hand, a historical home on Ramona that was a total fixer was listed for $1,650,000 and sold for $1,350,000....The market is sorting itself out on a sale by sale basis........

What lenders are looking for.......

Just spoke to a well respected lender. While rates are great right now he said that MOST lenders are now requesting 30% down and near perfect credit. The plus side is that if you are working with a buyer now you can be sure that you're working with someone extremely well qualifed.....