The Los Altos housing market, a largely residential portion of the Bay Area real estate market, showed possible signs of weakening after the expiration of the federal and state homebuying tax credits. Although the average median price of a Los Altos home for sale increased, the number of units sold decreased compared to year ago levels. According to a July 15, 2010 article in the Mercury News, “Bay Area home sales in June fell off slightly from a year ago with the expiration of federal home buying tax credits that had helped spur home buying activity. At the same time the prices rose in response to sales of fewer foreclosures and more high-end properties. In June, a total of 8,373 new and existing single-family homes and condominiums closed escrow, up 1.3 percent from May, but down 3.1 percent from June 2009, said a report released Thursday by MDA DataQuick. The Bay Area's median price was $410,000, unchanged from May, but 16.5 percent higher than a year ago. June was the ninth consecutive month that saw median prices rise on a year-to-year basis, but the median price was still 38.3 percent below the $665,000 peak in June and July 2007. In Alameda County, 1,664 homes changed hands in June, a 5.1 percent decline from a year ago, while the median price rose 19.4 percent to $400,0000. In Contra Costa County, 1,729 homes changed hands, a 4.8 percent decline from a year ago, while the median price rose 13.4 percent to $283,500.”
The next few months should be telling for the Los Altos real estate market, as a non-stimulus driven economy begins to fall into place. According to John Walsh, the president of MDA DataQuick, “The next few months should be very interesting. We're about to see how well the housing market can fly on its own. The tax credits no doubt stole some demand from the rest of this year, and soon we'll have a better sense of just how much. The Bay Area market is getting a boost from super-low mortgage rates and a slightly friendlier lending environment for high-end borrowers. But, barring new government stimulus, the housing market will be relying very heavily on improvements in the economy. A lot will depend on how many people find jobs, or stop worrying about losing the one they have."