From developers building speculation homes to residents designing their custom dream homes, Los Altos Hills has seen a significant increase in new development over the years. In 2015 and 2016, the building department at the town of Los Altos Hills issued 76 permits to build new residences and secondary dwellings. That is over a 30-percent increase from previous years!
Once again, Los Altos Hills has been ranked as one of America’s most expensive zip codes by Forbes. This is for good reason: the most expensive 2016 sale in Los Altos Hills was for $16,500,000 (the DeLeon Team represented the buyer). Many of Silicon Valley’s elite are looking for scenic custom estates that offer both convenient access and private living, and Los Altos Hills is ripe for the picking. A famous, Silicon Valley CEO recently bought a property in the area for over $6 million and plans to build an estate home of over 10,000 square feet. On the other end, developers have been investing in the Ranch-style homes that once populated the area and are rebuilding brand-new homes for wealthy tech buyers. With a large, standard lot size of an acre and an accessible building and review process, Los Altos Hills is enticing more and more people to build along its rolling landscape, which showcases prime features like a convenient location, privacy, and spacious properties.
Not many people realize the relative access to building and the actual deals to be had in Los Altos Hills. With the median sales price at $3.5 million and typical building costs in the range of $300 to $500 per square foot, an owner can invest less than $2 million to build a custom home worth $7 million or more. The town actually has a fast-track design review process for plans that conform within design guidelines, and adhere to the local development philosophy of preserving the town’s semi-rural character and natural atmosphere.
Now would be an ideal time to take action if you are looking to buy and build a custom home, for Los Altos Hills currently has an overflow of unsold inventory. The Los Altos Hills real estate market took a turn when the international and domestic stock markets fluctuated in late 2015. Buyers were hesitant to pull large sums of money to buy homes and, as a result, many new listings sat on the market unsold.
Between the months of January and April of 2016, 72 new listings came on the market, yet sales were less than half that number. Over 40 homes from 2016 remain unsold. New homes coming on the market are in competition with unsold homes sitting on the market. Consequently, buyers will be facing less competition and potentially better values than that of neighboring cities. Bargains will be had when the expired listings come back on the market to compete with the new listings of this year.
DeLeon Realty forecasts that Los Altos Hills will continue to have new development over the years, resulting in good appreciation.