Home prices in Los Altos are in their fourth year of recovery. Beginning with the end of declining prices in 2009 and the bottoming out of the market in 2010, Los Altos home prices have been steadily rising since then. 2010 saw the first gains in many years with home prices rising approximately 1%. In 2011, prices rose just under 5%. In 2012, the average selling price rose over 10%. This ongoing trend shows no sign of slowing down in 2013 as the market has very little inventory and a significant number of interested buyers.
Neighborhoods With Biggest Home Price Gains
North Los Altos saw some of the strongest activity driving home price gains in 2012. There were several transactions in Q4 where buyers bid home prices of 10% or more on several properties suitable for reconstruction. New construction with Los Altos is one of the key factors in driving pricing activity as buyers purchase homes to rebuild a remodel and speculators return.
The next two strongest neighborhoods included Old Los Altos and the Rancho neighborhood (including some immediately adjacent neighborhoods). While the average selling price throughout Los Altos reached and exceeded $2 million in 2012, these neighborhoods consistently sold homes well beyond that price point.
Best Value Neighborhoods In Los Altos
Central Los Altos and south Los Altos remain the neighborhoods that offer the best values. Homebuyers will typically find slightly larger homes at a slightly lower price per square foot than other areas within the town. However, there are trade-offs. Buyers should be aware that in many South Los Altos neighborhoods they will get Cupertino schools and not Los Altos schools. While I find Cupertino schools to be excellent, it is important to be aware of what you're getting from one place to the next.
Home Price Trends for 2013
So far in 2013, most of the remaining inventory 2012 has sold and almost everything that has come on the market has sold. Multiple offers remain standard and cash buyers are still a major factor in most sales. Based on the sales so far this year and the general lack of inventory, prices will definitely rise particularly in the first half. There are so many economic factors that can drive homebuyer behavior that there is no way to guarantee what will happen with home prices in the second half of the year. In my opinion, this year will be just as strong or stronger than last year.