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REALTOR®: Inventory slowly improving, according to Palo Alto brokers

Wednesday, August 8, 2012

Palo Alto real estate brokers and managers say the housing market environment has greatly improved from a year ago. Inventory is still not at normal levels, but it is slowly rising.

Keller Williams managing broker Bob Stelzer says Silicon Valley, particularly the Palo Alto area, is very fortunate not to have experienced the ups and downs that other markets have experienced. "We are in a very strong market," he recently announced at a Silicon Valley Association of REALTORS® meeting.

Stelzer indicates demand is coming back strong, and there has been a significant increase in listings since April. His data shows Menlo Park with 52 current active listings compared with 26 in April; Palo Alto 51, compared with 29 in April; and Los Altos 45 compared with 24.

High-end property sales in the $2 million bracket increased substantially in the first half of this year in comparison to the same time last year, says Stelzer. In the first half of 2012, 80 single-family homes in the over $2 million bracket sold in Palo Alto, compared with 64 sold in the first half of 2011; 44 sold in Menlo Park, compared with 25 the same time last year; and 60 such homes sold in Los Altos, compared with 31 last year.

Sellers are becoming realistic, according to the brokers. Many sellers caught up in the hype of Facebook's IPO and thinking they would strike gold by waiting for prices to skyrocket, realize the phenomenon did not create the "super market" they thought it would. These sellers are now ready to sell.

Alain Pinel Realtors broker Bob Gerlach says it's not the Facebook IPO phenomenon that is driving the market, but rather, it's interest from foreign buyers. He says majority of transactions through his office are with Chinese cash buyers.

Palo Alto is prime choice for foreigners since it is a market that does not seem to fluctuate as much as others. Foreign interest in property in the area has created a "dramatic effect" in the market, says Gerlach. A significant amount of offshore market dollars is coming from China, Russia, India and Brazil, the brokers say.

Tim Foy, a broker with Midtown Realty, believes it may take some time for inventory to return to normal levels because consumers are still seeking greater stability. Despite the uptick, he expects low inventory for a while.

"It won't change overnight. It's a market reality," comments Foy.

The brokers tell their agents to make their sellers aware that despite the high demand, not all houses are "entitled" to top market prices because today's buyers are more informative and more selective. Gerlach indicates there is pocket of sellers that can't sell because they don't have better places to go.

"It is a discretionary market," notes Gerlach.

There is more discretion about "housing with a blemish," adds Foy.

Stelzer reminds agents to make sure disclosures are comprehensive. "Disclose everything. It's just the proper way to do it," advises Stelzer. "Make sure the seller looks at the contract, educate them, manage their expectations. It's easy to get greedy."


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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