The Monte Sereno real estate market tends to be a good indicator of the high end market throughout Siicon Valley or Santa Clara County. While it may not be exactly the same in Los Altos, Los Altos Hills, Almaden or Saratoga/Los Gatos, it’s often very similar.

Homes at the high end of the price range have taken a beating in the downturn, as would-be buyers – mostly “move up” home buyers – haven’t got enough equity to purchase the next home.  Many are running into problems getting financing too. So without a large amount of money to put down, it’s very difficult for even willing buyers to make the purchase.

Prices have been dropping in Monte Sereno, as they have been dropping everywhere in the San Jose area.  Although we aren’t seeing the deep discounting here that we see in Alum Rock (where most of the houses bought are distressed properties, either short sales or bank owned homes), the rollback in pricing is still painful for home sellers, especially if they were counting on that money for retirement.

Let’s first look at the recent historical data on list prices in Monte Sereno (graphs courtesy of Altos Research, with which I have a subscription). First here’s a view of the median list price of all houses offered for sale in Monte Sereno in recent years:

Now, the asking prices in Monte Sereno in recent years broken out by quartile (each segment is 25% of the inventory):

The highest priced homes have shown the most volatility, as you can see by the swings in the top line.  That could be a statistical abberation since each quartile represents very, very few homes.
(more…)