Fourth quarter sales in Atherton provide an excellent snapshot of Atherton’s changing landscape. Older ranch homes are being quickly snatched up for their valuable land and replaced with new 10,000sf+ estates. In the 4th quarter, there were 21 sales of homes on lot sizes of 15,000sf or greater. Of those sales, approximately 43% (9 homes) were purchased for the land. Land values ranged from $3.7m-$4.5m per acre with several multi-acre parcels selling between $9m-$20m.
BEFORE New Development
AFTER New Development, Sold in 4th Qtr
Opportunities Realized
Owner-users are taking advantage of these parcels to build custom homes while developers are taking advantage of the demand for new construction. Consider one opportunity realized where the developer paid $3.2m for a lot in mid-2012, built a 12000sf+ home and sold it in the 4th quarter of this year for slightly less than $15m. This particular lot sold at a lower than average price at the time because of it’s location and topography; however, the developer took a risk that paid off.
Building Trends
Atherton has issued 33 new home building permits in 2014; approximately 80% of those homes will have basements. The majority of those permits are in west Atherton, however, 4 new homes are being built west of Alameda de las Pulgas. In addition, of the 9 “land sales” during the 4th quarter, four of those sales are in Lindenwood, so expect the new construction trend to be strong in Lindenwood as well. In the northern section of Central Atherton, Adam Way has transformed into a highly desirable location and continues the trend with this month’s quick sale of another home likely to be replaced by new construction. This original ranch home on Adam Way was offered for $4,895,000 and had six offers! This is a new price point for “land value” on this street and with six offers, it is another indication that the strong demand for land continues.
Moving Forward
At the time of this article, inventory in Atherton is at its lowest point in over 10 years and demand is strong. There are only 8 properties on the MLS, six of those are offered at $12.5m+. If buying or selling in Atherton is in your future plans, now is a very good time to engage a local realtor to either help you source properties or determine the best strategy for selling in this marketplace.
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