January 28, 2009

Are Palo Alto House prices in trouble? What’s going on here?

2370 MIDDLEFIELD Rd, Palo Alto, CA 94301 | MLS# 80903526
2370 MIDDLEFIELD Rd Palo Alto, CA 94301
Price: $875,000

1201381516_2370
Beds: 2
Baths: 1
Sq. Ft.: 1,122
$/Sq. Ft.: $780
Lot Size: 5,000 Sq. Ft.
Property Type: Detached Single Family
Style: Traditional
Year Built: 1947
Stories: 1
View: Neighborhood
Neighborhood: Old Palo Alto
County: Santa Clara
MLS#: 80903526
Source: MLSListings
Status: Active
On Redfin: 3 days
Charming 2 bed & 1 bath home located in prestigious Old Palo neighborhood. Offering 1,122 sq. ft. of bright and well maintained living space with hardwood floors, detached 2-car garage, and expansion possibilities. Excellent PA school district: Walter Hayes Elem, Jordan Middle, & PA high school. Walking distance shopping areas, train station, & parks.

Here’s what Burbed reader Simon had to say:

It’s a house, an actual real house, in Old Palo Alto (just), for less than $1000/sq foot. What’s wrong with it? Is it infested by demons? Built over a nuclear waste burial site? I mean, even if it was falling down the lot alone must be worth $1M, surely.

Now personally I think Simon is being a little bit of an alarmist. While we would all desire Palo Alto to have a minimum of $1000 per square foot, in reality, $8×0 is usually a healthy number. So $780 isn’t the end of times, but it’s still an alarming trend.

Could someone please write President Obama and inform him of this threat to national security? Thanks!

Comments (46) -- Posted by: burbed @ 5:07 am

46 Responses to “Are Palo Alto House prices in trouble? What’s going on here?”

  1. Herve Says:

    Before you get too excited, check the lot size. Lot size is extremely important for the PA market.

    I could mention the bad location, but if it’s OK to be next to 101 it it’s Palo Alto, it must be ok to be next to Oregon Expressway and on Middlefield.

  2. BuyersAreIdiots Says:

    Bah! Must be an anomoly.

    I have a suspicion that at some point in the future, Real Excreter will coin the term “Real Palo Alto” to begin ignoring any of the properties that demonstrate value loss in that area.

  3. nomadic Says:

    Guys, guys, you’ve got it all wrong. :-)

    This is an intentional under-pricing situation to draw multiple offers and drive up the price!

  4. Real Estater Says:

    Herve says,
    >>I could mention the bad location, but if it’s OK to be next to 101 it it’s Palo Alto, it must be ok to be next to Oregon Expressway and on Middlefield.

    This is worse than being next to 101. What happens is that cars constantly queuing up in front of your house waiting for the traffic light at Oregon Expressway. Better have good windows because there will be plenty of exhaust fume. The other issue is there isn’t any parking in front of your house due to the right turn lane to get on Oregon Expressway, which is a major pain if you like to entertain guests.

  5. Pralay Says:

    I have a suspicion that at some point in the future, Real Excreter will coin the term “Real Palo Alto” to begin ignoring any of the properties that demonstrate value loss in that area.
    ——

    Of course he uses the concept already. Any depreciating property is excluded from Real Palo Alto of RBA. If you see any property in Palo Alto sold/listed for less comps or last sold price (or people are not overbidding), it is kicked out from RPA of RBA.

  6. Unreal_Alex Says:

    Surprised to see this at less than a mil, but you guys give some reasons. Also, it could be still up because the termites are holding hands, plus a Bay Area treat I’ve personally not seen in other areas, dry rot.

  7. sonarrat Says:

    It’s one door down from Oregon Expressway. As for the street parking, you can use the frontage road that parallels Oregon.

  8. BuyersAreIdiots Says:

    Any depreciating property is excluded from Real Palo Alto of RBA. If you see any property in Palo Alto sold/listed for less comps or last sold price (or people are not overbidding), it is kicked out from RPA of RBA.

    But of course!

    At this rate, the “Real Bay Area” will need to be measured in square feet instead of square miles.

  9. anon Says:

    Psst. BAI: There is no RBA.

  10. sonarrat Says:

    Meanwhile:

    Nice deal!

  11. SiO2 Says:

    Check out the December city report “CA City Chart” from dqnews dot com:

    PALO ALTO 9 $385,000 $1,179,000 -67.35%

    9 sales, including SFH, condo, townhouse.
    Median price of $385k. Down 67% from 07.

    San Jose was higher at $390k.

    Alamenda was higher at $650k.

    I’m sure there’s some anomaly here, but it is eye opening.

  12. sonarrat Says:

    There’s no way anything in Palo Alto proper sold for $385K in this decade. They must be comparing PA to EPA.

  13. S-PA Says:

    SiO2 please do not try to scare me like that.

    http://www.julianalee.com/reinfo/sold-PA.htm

  14. zanon Says:

    Ouch! House 22 on julianalee took a bath! 676 Mayfield Av was listed at $2.8M (clever overbid strategy here, as Zestimate was $3.1M!) and sold for a mere $2.5M.

  15. S-PA Says:

    22 is
    *Available for purchase by approved Stanford faculty ans staff only

  16. Real Estater Says:

    >>There’s no way anything in Palo Alto proper sold for $385K in this decade. They must be comparing PA to EPA.

    Right. DQ is thoroughly useless aggregate data, probably rolled up Palo Alto and East Palo Alto into one number.

  17. nomadic Says:

    sonarrat – if you’re going to live in EPA, then west of 101 is definitely the place to be. Probably quite a bit safer too.

    On the Juliana Lee page – wtf is with #8?

  18. madhaus Says:

    Okay, which is better for a chorus, “Useless aggregate data” or “Meaningless aggregate data”? I feel a song coming on…

  19. madhaus Says:

    Re: Juliana Lee (Tech Gal) #8 house, did you notice the original price was $1.495m? We know Tech Gal will record this as $305k over the SECOND price of $1.295m.

    So let’s see, what happened here?

    10. Underpriced for overbids, common in Palo Alto.
    9. Free bank included with home.
    8. Located next to prestigious soccer fields, complete with motivated out-of-town guests.
    7. SoCal Buyer bid way over because super impressed by ability to use Foothills Park, complete with air-conditioned bathrooms.
    6. Tech Gal deliberately paid huge transfer tax to suggest house sold for more than it actually did.
    5. Facebook Employee!!!!!
    4. Offer sweetened by seller to include ten dozen Sprinkles cupcakes.
    3. House included sub-zero fridge. Wouldn’t you pay ANYTHING for one of those?
    2. Whoops? Did I say $1.6m? Silly me!!! I meant $1.06m!
    1. It’s Palo Alto. It’s Special Here.

  20. BuyersAreIdiots Says:

    Psst. BAI: There is no RBA.

    Oh.

    Did it finally squeeze into a singularity already?

  21. rick Says:

    PA in trouble? No way, this house’s problem is that it is not next door to RE’s, even that has the undesirable part of being next to a troll.

  22. nomadic Says:

    madhaus, I think it was you who clarified earlier:

    meaningless aggregate data
    and
    useless anecdotal data

  23. anon Says:

    “Did it finally squeeze into a singularity already?”

    Yeah, about August of last year…

  24. sonarrat Says:

    nomadic #17 – absolutely right, except that there’s only about a block of EPA west of 101, so it’s all basically undesirable. But at least it is west of 101.

  25. Real Estater Says:

    Great news!!! House passes 819 billion stimulus bill!

    It’s funny how the Republicans all of a sudden watching every penny, after they wasted trillions of dollars fighting a useless war.

  26. bob Says:

    “Great news!!! House passes 819 billion stimulus bill!”

    I see nothing has changed since my last visit, and RE is still interpreting ANY economic news as a miracle-savior for housing.

    The stimulus won’t save housing- sorry.

  27. SiO2 Says:

    I’ll bet RE is right, probably included EPA. It is very strange though that the DQ number had 9 sales, but Julianne Lee’s had 22 SFH and 6 condo/th. So, useless data. Not even aggregate.

    I also agree that it’s funny that the Repubs are now deficit hawks. Where were they in the last 8 years?

  28. Pralay Says:

    Does anybody here care for 819 billion stimulus bill? Our economy is doing just fine. There is indeed no recession. After Fannie Mae/Freddie Mac problem got solved in last September, “we’re all clear for take-off”. We are flying high now.

    But the media is saying that the problem is not solved! Fannie Mae more needs money! Nothing surprising here. That’s just typical doom and gloom media spreading misinformation.

  29. nomadic Says:

    Forget Fannie Mae! Did you hear about the postal service?

    http://money.cnn.com/2009/01/28/news/economy/postal_service/?postversion=2009012817

  30. Herve Says:

    > Did you hear about the postal service?

    With all the foreclosure notices being sent you would think USPS is actually quite busy! :-)

    Seriously, in my opinion 5 days a week is already plenty (as far as residential addresses are concerned). I would not mind getting mail only once or twice a week.

  31. Herve Says:

    By the way, there are currently 13 houses listed under $1M in Palo Alto (including 4 under $900K). That reminds me of 2006 or earlier.

  32. Herve Says:

    848 Southampton Dr reduced another $405K.

    But, more importantly, it is below $1,000 per sq ft now.

  33. madhaus Says:

    Meaningless/Useless anecdotal data. It’s not in Real Palo Alto, anyway.

  34. brbindif Says:

    A few blocks away, 866 Seale Ave (4BR, 4BA, 3600 sf, 9514 sf lot) was listed 1/22/09 for $3,498,000 and appears to have already sold. There’s a SOLD sign in front, and it no longer shows up in the active listings.

    The listing can still be seen at

    http://lanbowling.com/PropertyDetails?fl_hook=1258819959&show_virtual_tour=yes&show_description=yes&show_address=yes&presented_by=yes

  35. steve Says:

    brbindif, I noticed that as well. I believe there was a pre-emptive offer but I don’t have the inside scope beyond that it is under contract

    herve, I’ve been drooling over 848 for a long time now. I wonder what it eventually sells for. 3.8?

    the 3+M market in palo alto is strange. I guess it is for people who really, really like getting to know their neighbors since, unless you upgrade to 94304, you are living about 20 feet away from them on either side

  36. Herve Says:

    Yeah, I would not be surprised if the house sells for less than $4M. California Ave is right behind it, and the soccer fields are pretty busy and noisy on week-ends. Not the best location to spend $4.6M if you ask me. And as RealEstater said, the ultra modern style does not appeal to that many people.

  37. Herve Says:

    And the house is too… cubical?

  38. steve Says:

    it is so pretty inside, though. it really belongs on a vew lot in LAH or PV.

  39. nomadic Says:

    No doubt it’s a pretty house, but it seems a bit “office building” like too. The sort of place I can admire but cannot imagine actually living in.

  40. nomadic Says:

    … and absolutely cubical! LOL.

  41. Real Estater Says:

    SOLD!

  42. Terry Says:

    I just hope all those realtors who I spoke to this time last year, those guys who told me palo alto NEVER comes down are keeping tabs on this. At the peak of the boom a house could have sold for 1.3 million is now around 900,000 by my index. That guys is a 20 percent decrease and MORE IS YET TO COME, particularly if you had your money off shore which means you have done doubly well for not buying last year as the US dollar tanked too.

  43. nomadic Says:

    This place went for $815k. Wow, it took 20 YEARS for it to double in price; 3.4% appreciation per year. tsk tsk

    Still, $726/sf – however there aren’t many sf in this little house.

  44. Pralay Says:

    But according to our “pulse of the market” pro, Q1 was the bottom. Therefore, this property must have appreciated already and doubled to $1.6M.

  45. Pralay Says:

    848 Southampton already passed one year anniversary for being in market!

  46. Herve Estater Says:

    > 848 Southampton already passed one year anniversary for being in market!

    And it’s been 5 months since the last drop. $4.2M soon? Then $3.9M?


Leave a Reply

Please be nice. No name calling, no personal attacks, no racist stuff, no baiting, etc. Let's be nice to each other in the true Bay Area spirit! (Comments may be edited/removed without notice.)