A tale of two markets: which is the future?
For two listings recently, "it was the best of times, and it was the worst of times". Both were priced right. Both were prepared and presented to the highest standards of their respective markets.
One, selling quickly and for well over list price, suggests that times are still good. The other is a cautionary tale, an example of what happens when everyone decides to get out of Dodge while the gettin' is good. Which makes the gettin' not nearly as good. And according to some, that gettin' is the future of real estate.
The sellers of these two listings have only one thing in common, a strong Stanford connection.
The listings have only two things in common. Both are small single-family homes, built around 1950. Both are in transitional neighborhoods.
But the house that sold quickly is in a highly sought-after neighborhood of Los Altos that's transitioning from comfortable older homes to grandiose new ones. The other house is located in Menlo Park east of 101, in an area called Belle Haven that's recovering from years of neglect.
The first thing you should know about these two markets is that sales haven't dropped off significantly in either in almost a year. Buyer demand is still strong.
The other thing you should know is that there are twice as many single-family homes in Los Altos as in Belle Haven and neighboring East Palo Alto combined, yet the number of homes for sale in Los Altos and Belle Haven/EPA is almost identical. Belle Haven/EPA inventory has ballooned to twice its normal level, while Los Altos inventory is up from last year but still relatively low. Not only does this give Belle Haven/EPA buyers twice as many choices as Los Altos buyers, it also gives them twice as many choices as they've had since 1998 if not before. That's not a good thing for Belle Haven/EPA sellers.
Low inventory prolongs a seller's market in Los Altos, while high inventory creates a buyer's market in Belle Haven/EPA. Two completely different markets, nine miles and one full decade apart. One is the robust specimen we've admired for most of the past eight years. The other resembles that "worst of times" for local real estate, the doldrums of the early 1990s. The latter is the market the bubble theorists predict for every real estate market, sooner or later.
So let's compare the performance of these two listings, using the Jeopardy® game show format of putting the answer before the question.
Answer: Los Altos, 165. Belle Haven, 5. Question: How many agents went through during broker's tour?
Answer: Los Altos, 92. Belle Haven, 3. Question: How many people went through each home's first two open houses?
Answer: Los Altos, 7. Belle Haven, 42 and rising. Question: How many days was each house on the market?
Answer: Los Altos, 6. Belle Haven, 0. Question: How many offers did each house get?
Answer: Lighting his cigars with $100 bills. Question: What's the Los Altos listing agent up to these days?
Answer: Working overtime on Plan B. Question: What's the Belle Haven listing agent up to these days?