The DeLeon Insight - January 2017

THE DELEON INSIGHT Silicon Valley Real Estate JANUARY 2017

PREDICTIONS FOR THE

NEW YEAR

®

• 2016 REVIEW • DESIGN TRENDS • NEIGHBORHOOD SPOTLIGHT: NORTH LOS ALTOS

www.DELEONREALTY.com DELEON INSIGHT

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JANUARY 2017

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MAKING A DIFFERENCE • HOME MAINTENANCE SERVICE • BOOSTING HOME EFFICIENCY •

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MARKET TRENDS Average Sales Price 2015 & 2016

01/2015 -12/2015

01/2016 - 12/19/2016

Average sales price for single-family homes from 01/01/2016 to 12/19/2016 compared to a similar period in 2015.

Average Price/Square Foot: 2015 & 2016

01/2015 - 12/2015

01/2016 - 12/19/2016

Average price per square foot for single-family homes from 01/01/2016 to 12/19/2016 compared to a similar period in 2015. *Data gathered from the Multiple Listing Service on 12/19/2016

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The DeLeon T ea m Making a Diff erence in the Community The holiday season is always a time of reflection in my family, and I want to thank you all for your support, both personal and professional. 2016 was an incredible year, and I have been thinking about ways to make a difference in the exceptional communities DeLeon Realty serves.

Like all of you, I am often approached about supporting a myriad of worthy non-profits. Due to some deeply personal tragedies during my childhood, DeLeon Realty will focus its giving on the area’s youth, their education, and related mental health issues. In addition to giving more than $300,000 in donations to local schools and community programs since 2012, we were excited to give more than $80,000 in 2016 to local schools and two very special organizations: 1. Youth Community Service. YCS helps young people improve in areas of awareness, relationship-building, and decision-making by means of classroom and community service collaborations, in partnership with the Palo Alto Unified School District, the Ravenswood City School District, and the Sequoia Union High School District (www.youthcommunityservice.org).

2. Family & Children Services of Silicon Valley. FCS empowers the well-being of children, teens, and adults in both Santa Clara and San Mateo Counties through emotional and mental health issues with a focus on suicide prevention and preventing domestic abuse (www.fcservices.org).

Over the coming months, look for a new series of articles entitled “Give Back” that will profile these organizations, our local schools, and other exceptional programs serving the needs of area youth.

I truly believe that Silicon Valley is a special place, and want to highlight some of the great work being done to keep it that way for our children.

Sincerely,

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YEAR IN REVIEW BY:

MICHAEL REPKA, ESQ.

DELEON CEO/GENERAL COUNSEL

There is no doubt that 2016 was a turbulent year for real estate in many prime parts of the Peninsula. The softening of the overheated market that we have experienced over the past few years, coupled with uncertainty associated with the unusually divisive presidential campaign and unanticipated election result, caused hesitation on the part of many buyers.

Additionally, DeLeon Realty has seen Chinese buyers shift away from large quantities of lower-priced investment properties and towards high-end trophy properties in the $5 million to $20 million range.

While there are some reasons for optimism, we have seen buyers act more pragmatically and less impulsively.

G ENERAL MARKET CONDITIONS

Prices have almost doubled over the past seven years in some prime parts of the Peninsula, most notably in top neighborhoods of Palo Alto and Atherton. While there were many factors that led to this historic run-up, some of the strongest factors were the federal government’s stimulative policies aimed at bringing the rest of the country out of the severe recession of 2008-2009. While needed in many parts of the country, these policies were like adding fuel to a fire given the robust economy of Silicon Valley.

As the local economy continued to flourish, affluent local and international buyers snapped up prime properties in the most desired neighborhoods. This caused a dramatic increase in prices in these ultra-prime neighborhoods, and a resultant disparity in value between these homes and other viable alternatives. For example, homes in neighborhoods that had traditionally sold for 80 percent of a similar home in Palo Alto began selling for 60 percent as Palo Alto’s appreciation outpaced that of surrounding communities. As a result, in 2016 we began seeing some buyers shift their focus away from the most prime neighborhoods and

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towards other areas that offered a better value proposition.

Over the past 12 months, we have seen some affluent buyers who began their search in Atherton or Old Palo Alto shift their focus towards other exclusive yet undervalued areas, such as Los Altos Hills and Portola Valley. Similarly, some value-sensitive buyers redirected their focus away from Midtown and South Palo Alto and towards Mountain View and Redwood City. This shift of preferences is one of the reasons we project strong appreciation over the next five years in places like Los Altos Hills and Portola Valley.

PRESIDENTIAL ELECTION The presidential election had a profound impact on buyers’ confidence, but in ways unlike prior races. In most elections, people have a pretty good idea what will happen under the administration of either party and, as a result, the future impact is relatively easy to predict. This year, however, voters were unsure what to expect in what was perceived to be the very unlikely event that Trump would win.

As the polls began to show that Hillary Clinton was pulling away, we saw the real estate market loosen up and experienced an increase in the number of offers on our listings. When the polls tightened, we saw more hesitation on the part of buyers. After all, uncertainty breeds lethargy.

Since the election, we have experienced a bifurcated market. The market for homes priced below $2 million has remained soft as buyers try to adjust to the idea of a Trump presidency. However, our Platinum listings, those with an anticipated sales price in excess of $5 million, have seen a significant uptick in activity and showings, which is a complete reversal from earlier in the year. While it is too early to ascertain the actual cause, or the sustainability, of this increase in market activity, one hypothesis is that the very wealthy are optimistic that Trump’s brash style will give way to a more measured and traditional approach to governance.

If so, the possibility of lower taxes, both at the personal and corporate levels, could significantly impact the economic circumstances of those well-heeled buyers who can afford a home of $5 million or more.

While a reduction in taxes normally has a positive impact on real estate prices JANUARY 2017

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because more buyers are encouraged to invest, it should be noted that a reduction in taxes, specifically capital gains taxes, which include the 3.8 percent tax on “unearned income” that was enacted as part of the Affordable Care Act (a.k.a.

Obamacare), could have an unexpected negative impact on sales prices in Silicon Valley. This is because many homeowners in Silicon Valley have so much builtin appreciation in their homes that the potential tax bill discourages them from selling. In other words, many longtime homeowners refrain from selling because of how much tax they would have to pay, which keeps the housing inventory low. If the tax rates were lowered, this may cause an increase in the number of homes

listed for sale. This would be particularly true if the homeowners believe that the capital gains tax rates would go up again sometime soon.

DEMAND FROM CHINESE BUYERS Chinese investment in American real estate—specifically in the Bay Area— has declined for a number of reasons (see Kim Heng’s article “How Do Asset Bubbles and Recent Changes in China Affect Silicon Valley Real Estate?” in this issue of The DeLeon Insight). These factors include developments within the Chinese government—perhaps most significantly, a stiffened approach to the national monetary outflow policy. Because of

these developments, less private Chinese wealth entered the United States, but the motivation for Chinese citizens to move money out of their country intensified.

Nevertheless, in 2016, we saw a dramatic increase in the number of purchases made by very affluent Chinese buyers looking to relocate their families to the United States. Many quietly cited concerns about the Chinese economy, a desire for diversification, and unease about the ever-changing “rules” in China.

IMPORTANCE OF PRICING AND MARKETING For all of these reasons, DeLeon Realty has seen buyers hesitate to make a move.

However, the overall economy, as well DELEON INSIGHT

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as the stock market, has remained very strong in Silicon Valley. In 2016, more than in other years, fear seemed to hold people back. There were fears that the market was going down, fears of reduced demand from Chinese buyers, and fears associated with the election. Nevertheless, we found that well-priced and heavily marketed homes continued to sell, and at good prices. In our experience, buyers’ fears were alleviated when they realized several other people were interested in the same home.

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HOW DO ASSET BUBBLES AND RECENT CHANGES IN CHINA AFFECT SILICON VALLEY REAL ESTATE? BY:

KIM HENG,MBA

DIRECTOR OF SALES & INTERNATIONAL OPERATIONS

As the real estate market in Silicon Valley cools off, many people are concerned it seems the power of Chinese investment money throughout the area is waning.

Local buyers can’t help but feel that the settling of the market means that less Chinese are coming to the Bay Area to purchase homes. The most prominent concern is: will this change be good or bad for the local real estate market?

new cash is largely trapped inside China by the government’s strict monetary outflow policy. According to real estate firm Knight Frank, apartment prices in Shenzhen, one of the major Tier 1 cities, recently rose 47.5 percent—the largest increase witnessed worldwide. In July, six major cities showed gains of more than 20 percent in home prices from the previous year; in August, 10 cities did.

There are many mini-bubbles, or asset

T HE PROBLEM

Chinese buyers still desire real estate in the U.S. because the importance of owning international real estate—particularly American real estate—is ingrained in their culture. Additionally, American real estate is all the more attractive since the U.S. has very few restrictions on real estate purchases by foreign nationals, unlike many other countries.

Despite these motivators, a multitude of factors has produced this decline of Chinese investment in American real estate, not least of which is the rapid appreciation in property prices for many major cities in China. Other coinciding circumstances include events like the depreciation of the Chinese yuan and the instatement of Chinese government policies like the anti-corruption campaign and its tightened monetary outflow policy. Thanks to these developments, less wealth has been permitted to flow freely into the United States. For Chinese who have still decided to invest locally, many have had to receive loans to make their purchases, instead of buying real estate in all cash, as has been the trend amongst Chinese buyers over the past five years.

T HE INSTIGATOR

The Chinese government is caught between the need to curb prices and the need to ensure growth. China’s money supply has quadrupled since 2007, yet the

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bubbles, in Tier 1 cities such as Beijing, Shanghai, Guangzhou, and Shenzhen.

These asset bubbles will eventually burst, causing a much bigger burst in China’s economy and, correspondingly, its real estate market. Many people own multiple homes in different cities in China and worry these asset bubbles are on the very brink of bursting. In anticipation, these owners prefer to sell at least some of their properties in China and transfer their wealth outside of the country.

As a diversification strategy, some Chinese real estate investors, particularly the very wealthy, have begun to invest elsewhere in the world, especially in booming American metropolitan areas like Silicon Valley, New York, and Los Angeles. Chinese investors have always viewed the United States—the Bay Area, in particular—as one of the safest real estate investment havens because of its high-quality education, clean air, prestigious universities, direct-flight access, JANUARY 2017

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abundant venture capital, and entrepreneur-friendly environment. These factors are in addition to the area’s large Asian population and terrific urban amenities.

As such, Silicon Valley is one of the most coveted destinations in the world for many affluent Chinese.

THE CAUSES Initiated under the regime of Xi Jinping, the Chinese government’s anti-corruption campaign was begun in 2012, but did not reach its peak until 2016. Xi vowed to crack down on “tigers,” or high-level officials, by implementing this campaign, which is the greatest coordinated anti-corruption effort in the history of China’s Communist rule. Many officials were investigated and removed from office over claims of bribery and other allegations of misconduct; as of 2016, the campaign had succeeded in detaining over 120 officials.

The Chinese government also forfeited the passports of many high-ranking government officials to prevent them from escaping the country or laundering illegally gained money out of China. This campaign sent a message to those whose government positions were intact that money-laundering and the like would no longer be tolerated.

In accordance with China’s current political cleansing, the depreciation of the yuan has put additional pressure on Chinese citizens to move money out of the country since many worry their money will continue to lose value. The yuan has depreciated about three percent against the dollar this year; as of December 20th, 2016, the exchange rate is $1 to 6.95 RMB, the weakest level in more than eight years. Furthermore, the People’s Bank of China has not taken aggressive action to prevent the falling of the yuan’s value. This depreciation has spurred many Chinese to look elsewhere in the world to park their money, especially Silicon Valley, where they feel their money will be more reliably invested.

To intensify matters, the government has recently implemented restrictions on the number of homes people can own

throughout Tier 1 cities in China. With the depreciation of the yuan, this action has only increased the desire for Chinese citizens to move money out of their country.

Perhaps the greatest handicap to this financial transference occurred when the Chinese government decided to tighten its monetary outflow policy. Despite the many motivators Chinese have to shift their money to Silicon Valley, this tightening has made it more difficult for Chinese buyers to pull money out of China all at once. Instead, many potential Chinese buyers have to travel to the U.S. with tourist visas and open up American bank accounts. This tedious process is referred to by Chinese as “ants moving their house” because it takes so much time to transfer money into their new American accounts. The effect of this

tiresome system is clearly evidenced by less cash offers from Chinese nationals for American real estate since these buyers have more limited access to cash available in the U.S. Many new Chinese immigrants will buy homes that are in the range between $1.5 million and $2 million, and these purchases will be made through financing due to the difficulties in moving money out of China. However, an interesting observation is that the monetary outflow policy doesn’t have much impact on the high-end real estate market—that is, for Silicon Valley homes that are over $5 million. The elite buyers in this sector are predominantly business-owners who have already established bank accounts outside of China and are able to move their money freely.

THE CONCLUSION For the foreseeable future, worries over asset bubbles and policies like the depreciation of the yuan will continue to build uncertainty over China’s growth.

In turn, the cooling of the Silicon Valley real estate market will be prolonged.

Even though these factors contribute to the swelling desire of Chinese nationals to move money out of the country, this transfer will become increasingly difficult if the Chinese government doesn’t loosen up its monetary outflow policy.

For the many observers who wonder how this combination of factors will impact Silicon Valley real estate in the immediate future, I subscribe to the opinion that the local real estate market will continue to have stable adjustment into 2017.

We don’t get great listings. We make great listings.

DeLeon Realty

At DeLeon Realty, we are not limited to accepting only turn-key, luxury-grade listings. Our innovative team of specialists enables us to transform every one of our listings into a truly must-have home. Let us show you what we can do for your home.

D E L Ewww.DELEONREALTY.com O N I N S I G H T | JANUARY 2017

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UP-AND-COMING DESIGN TRENDS BY:

MARIA McGARRY

DESIGN COORDINATOR

“For a new year to bring you something new, make a move, like a butterfly tearing its cocoon! Make a move!”

- Mehmet Murat Ildan As we make our “move” from 2016 into 2017, let’s take a look at emerging design trends that promise to make a splash. Our in-house interior designers have scoured the web and researched trusted sources and blogs so that you—and your home— are best prepared to meet the new year.

COLORS When determining what styles will be in vogue at the beginning of each year, we like to see what color institute Pantone heralds as its top new hues. Since Pantone’s influence affects everything from fashion to interiors, this provides tremendous insight into the color themes for all things in the design industry.

For 2017, Pantone declared “Greenery” (yellow-green) as its Color of the Year.

Therefore, expect to see many interior accents, upholstered items, and walls painted in this fresh, vibrant shade in the months to come.

wood, clay, and marble are preferred as design elements, and natural fibers like wool, cane, rattan, abaca, and other textural elements are key for upholstery and carpeting. Earthy materials like terra cotta are destined to make a return, along with more luxe, elegant surfaces like white-and-grey Carrara marble, or deeper shades of green or even black marble.

sophistication to any interior. Luxurious fabrics like velvet lend both depth and softness to warm, simple interiors, while the usage of wallpaper with marbled or agate effects creates texture and natural movement. Mixing the natural with the streamlined is increasingly in demand; pairing a rustic wood beam with a lacquered white wall emphasizes the textural contrast.

GLOBAL INFLUENCES The popular Nordic influence on interiors continues with its warm use of light, space, and simple, well-designed furnishings, which are heavily inspired by the designs of the ‘60s and ‘70s. Again, the natural look is key in this organic theme that utilizes textures such as wood, paper, fur, hides, and cork. Many emerging influences originate from areas like North Africa, India, South America, and Mexico, where traditional designs and patterns will work to create a well-travelled look in your home, perfect for those who prefer an eclectic mix of influences in their spaces.

ALL-IN-ONE BATHROOMS When it comes to bathroom design, trends point to a thematic combination of clean colors, seamless lines, and practical, simple design with a mix of organic elements. Additionally, combined sleeping and bathing spaces are growing in popularity as people strive to mimic examples they’ve witnessed in contemporary hotels.

CONTRASTING ELEMENTS Exotic contrasts will add contemporary

In conclusion, whether you are renovating your home or simply refreshing a few accents, look for natural, organic textures and don’t hesitate to mix in some retro-inspired pieces. You can’t go wrong with a fur throw and some natural-fiber pillows. After your revamp, you’ll be ready to take on 2017 in style!

FINISHES Many trends in finishes are being carried over from the last couple of years. Mixed metals remain popular; in addition to brass and gold details, polished nickel and silver are also coming back. Rose gold and matte black are staying strong, as well as oxidized and antique finishes. However, richer dark woods are poised to replace light-colored wood tones that have been so prominent lately.

SUSTAINABILITY Sustainability remains highly important. As people are often immersed in technology for work and play, we are looking to natural materials for balance. Organic materials like slate, DELEON INSIGHT

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DELEON REALTY ANNOUNCES IT’S THREE-YEAR HOME MAINTENANCE SERVICE BY:

MICHAEL REPKA, ESQ.

DELEON CEO/GENERAL COUNSEL

When buying or selling a home, it has always been important to select the right Realtor®. However, the home itself usually remains the same, irrespective of which agent represented the property.

That has all changed with the introduction of the DeLeon Realty/HomeSmiles maintenance program, which will be offered on all DeLeon listings. Once again, the DeLeon Team has found a way of making our listings more attractive to potential buyers—at no cost to either the buyer or the seller!

Naturally, we haven’t forgotten DeLeon buyers, either. When the DeLeon Team

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represents a buyer of any property in 2017, we will provide the same three-year maintenance plan.

At DeLeon Realty, we understand annual home maintenance takes time and planning. We also understand many Silicon Valley home buyers lead very busy lives. We want clients to move into their new homes and enjoy them without having to worry about annual home maintenance. Accordingly, we have retained the services of HomeSmiles, Inc., the industry leader in annual home maintenance services, to provide our clients with worry-free annual home maintenance.

If you list your home with DeLeon Realty, we will have an annual home main-

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tenance performed for your home by HomeSmiles in conjunction with listing, at no charge to you. Moreover, your home will be marketed and sold with a threeyear annual home maintenance service package from HomeSmiles. It is much like buying a “certified pre-owned” car from a Mercedes dealer. Don’t forget—if you buy a home with the DeLeon Team, we will also include a three-year annual home maintenance service package.

Although we all know property maintenance should be considered an integral part of homeownership, the fact remains that very few have the time to take on the projects required for the overall protection and upkeep of their homes. This problem has been compounded by the

fact that, historically, there has not been a single-source provider for annual home maintenance services. Many maintenance items are often too small to be worth a contractor’s time, and homeowners—especially ones with high-powered jobs and children—can’t seem to find even a small opening in their schedules to tackle them.

In the past, homeowners would have to schedule nearly a dozen vendors and appointments annually in order to service all the major components and systems of their home. HomeSmiles has solved this problem! DeLeon clients will now receive the following services on their home, performed by an industry leader and expert.

HomeSmiles provides: 1. Gutter and downspout cleaning; 2. Tree branch removal; 3. Exterior window/sill cleaning;

4. Dryer exhaust vent cleaning; 5. HVAC filter replacement; 6. Refrigerator coil cleaning; 7. Range/hood filter clean/replacement; 8. Water heater flush; 9. Water heater pressure relief valve check; 10. Water heater anode rod service; 11. Toilet tank inspection; 12. Driveway pressure-washing; 13. Garage door lubrication; 14. Garage door “reverse” safety inspection; 15. Smoke detector inspection/test/ lithium battery change; and 16. Carbon monoxide inspection/test/ lithium battery change.

At DeLeon Realty, we play offense, not defense. We believe a proactive annual home maintenance plan is key to preventing small problems from becoming

big issues. All major components of your home, including roofs, gutters, water heaters, furnaces, and appliances, are expensive and costly to repair or replace.

The cost of doing no maintenance is simply too high. Deferred home maintenance is cumulative, and its effects can be wide-ranging. For example, failure to clean gutters annually can lead to water overrun, failed roofs, rotten eaves, and dry-rot replacement bills far exceeding $25,000. Although a well-maintained water heater can last decades, failure to maintain your water heater can result in costly replacement in the range of $1,500 to $3,000. Overworked furnaces and appliances without clean filters can significantly drive up electrical costs and eventually cause failure, leading to significant capital expenditures.

Benjamin Franklin said it best, “An ounce of prevention is worth a pound of cure.” The fact is, proactive maintenance is essential to preserving the value of your home—without it, your home could lose significant value. Regular, routine maintenance enhances curb appeal, ensures safety, and prevents neglected upkeep from turning into costly major repairs. Over time, annual maintenance costs average more than $3,300, according to data from the U.S. Census. Various lending institutions, such as Directors Credit Union and LendingTree.com, agree the homeowner should estimate annual home maintenance costs at one percent to three percent of the initial home price. DeLeon Realty is pleased to deliver this service to our valued clients free of charge for the first three years of homeownership.

Proper and effective annual home maintenance requires training and experience. In contracting the services of the professionals at HomeSmiles, DeLeon clients can expect higher efficiency, better job knowledge, and more extensive experience in getting a good job done— one that meets or even exceeds industry standards.

DeLeon Realty is pleased to offer this new service to our clients on both the buying and selling sides of transactions.

For further information on this new and exciting service, please do not hesitate to contact Michael Repka at 650-488-7325.

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DELEON PLATINUM, LEADERS IN LUXURY. With far more sales over five million dollars than any other real estate agent or team in San Mateo or Santa Clara Counties, DeLeon Platinum is the brand of choice for discerning luxury buyers and sellers.

DeLeon Realty is taking an integrative and innovative approach to real estate that is unparalleled. Our staff works collaboratively to combine expertise in all facets, allowing for the highest level of care and attention for you and your property.

For Platinum buying opportunities, contact Ken DeLeon at 650.543.8501 To learn about our complete luxury package for sellers, contact Michael Repka at 650.488.7325

*Data gathered from BrokerMetricsÂŽ 12.23.16

NEIGHBORHOOD SPOTLIGHT COLLEGE TERRACE OF PALO ALTO BY:

KEN DELEON, ESQ.

DELEON FOUNDER

“Everything old is new again.”

- Peter Allen & Carol Bayer Sager Palo Alto is renowned as the “Birthplace of Silicon Valley” and has a worldwide reputation as a center of innovation and technology. However, the origins of Palo Alto in 1886 were a touch more intoxicating.

At that time, Palo Alto did not exist.

Instead, the thriving town of Mayfield had an established downtown around El Camino Real and California Avenue.

Leland Stanford approached Mayfield’s residents and said he wanted to make Mayfield the college town for the university he was establishing. While initially greeted with enthusiasm, his requirement that the town be dry and close its 13 boisterous saloons was promptly declined.

Consequently, Mr. Stanford formed Palo Alto, which remained alcohol-free until the 1960s.

Refusing Stanford was the beginning of the end for Mayfield. Many Mayfield citizens were drawn to the better schools and liquor-free environment of Palo Alto to raise their own children. As early as 1904, Palo Alto properties were selling at a premium due to the area’s great public schools. Thanks to our rich local archives at paloaltohistory.org regarding these heady times, we know one Mayfield resident complained, “Mayfield people are tired of having the roughs from all around the country come here, get drunk and raise a row. We’re tired of renting our cottages for $5 and $6 a month…when a house can’t be had in Palo Alto for $20-$25.” Do high Palo Alto rents seem familiar to anyone?

Mayfield eventually hit difficult times

RECAP

and sought to rectify their mistake. They banned saloons, and finally Palo Alto agreed to annex Mayfield in 1925.

Portions of Mayfield are now known as the College Terrace and Southgate neighborhoods. These are now quintessential Palo Alto neighborhoods, combining charming architecture with great walkability to Stanford and the shops and restaurants on California Avenue.

Residents include Stanford professors and students who love the proximity to the university. In addition, attorneys and scientists enjoy being close to the cluster of law firms and technology companies that ring Stanford and Stanford Research Park.

I fell in love with the College Terrace neighborhood in the 1990s while looking for rentals close to my law firm of Wilson Sonsini Goodrich & Rosati. I vowed one day to live on its tree-lined streets. My dream came true in 2012 when one of the neighborhood’s iconic homes came on the market. 2275 Amherst is an 1893 “Queen Anne” Victorian that displays grand beauty, complete with a wraparound veranda overlooking the grounds and seven bedrooms which my four children quickly conquered.

The home was originally purchased by Walter Miller, Stanford’s first Latin pro-

fessor, and legend has it that his children were not allowed to play until they conjugated all of their Latin verbs. After that, the home became known as “The Mayor’s House” because the Mayfield mayor lived there for over a decade. This historic home, which I greatly enjoyed living in, is very representative of the strong history and traditions that emanate from one of Palo Alto’s most storied neighborhoods.

As in the rest of Palo Alto, the housing inventory in and around College Terrace is evolving. Indeed, the faculty and staff of Stanford University are so drawn to the convenience of the neighborhood, the university is midway through the process of building 180 new housing units on 17 acres situated between California Avenue and Page Mill Road. While these units will be limited to Stanford employees and the allocation thereof will be by lottery, the allure of the neighborhood will continue to climb.

Demand remains strong as many local properties are purchased by successful families with the intention of being thoroughly updated or replaced with floorplans more conducive to today’s busy lifestyles. For the coming year, DeLeon Realty forecasts above-average appreciation between five and seven percent for this neighborhood.

2016 NEIGHBORHOOD RECAP AVERAGE PRICE (SALES PRICE) AVERAGE PRICE PER SQUARE FOOT DAYS ON MARKET DELEON INSIGHT

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$2,539,375 $1,548 23

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BOOST YOUR HOME’S

EFFICIENCY BY:

JILLIAN MRSNY

DESIGN COORDINATOR

During the warm seasons, we tend to spend so much time outside we often neglect simple updates that can help make our homes more efficient. Here are a few suggestions for creating an energy-efficient home for the new year.

We tend to notice air gaps and lack of insulation in our homes the most during cold weather. Instead of wasting more energy and money by cranking the thermostat higher to fight leaks, now is the perfect time to detect and stop them.

Since the weather outside is most likely colder than your home’s interior, it is easy to check for these leaks by simply passing your hand over the edges of doors and windows to feel for drafts. Upon finding these gaps, you can easily fill them with weather-stripping or caulking.

Adhesive-backed EPDM rubber offers a suitable insulation material and can last at least 10 years. Be wary of purchasing cheap weather-stripping as their low price often reflects their shorter lifespan.

Filling the gaps now will help keep your home insulated from the current cold and preserve your interior during the hot days of summer.

As we all know, hot air rises, and depending on how well your ceiling and attic are insulated, you may be losing significant heat through the top of your home. Studies show attics are the biggest

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energy drains as they have multiple intrusion points. Small gaps are often found around recessed light cans, piping, and wiring. Although air leaks around recessed cans seem small, consider that the quantity of these lights can be more than 20 in some homes, thus forming one of the more significant energy-suckers.

Looking at the interior label of your recessed lights can help you determine if you have energy-draining cans. Lights with labels reading “ICAT”—or “insulation contact and air-tight”—are already sealed. If you don’t have this label on your lights, the leak can be easily fixed by adding an air-tight baffle. Simply remove the bulb, snap the baffle into the existing housing unit, and you’re done.

No uncomfortable crawling in your attic is necessary!

Adding energy-efficient light bulbs is another easy winter project. Today’s energy-efficient light bulbs have come a long way in both style and options. Most stores carry energy-saving incandescent types and, although they offer roughly 25 percent more efficiency than your standard incandescent bulbs, compact fluorescents (CFL) and LEDs offer more than double the efficiency with 10 to 25 times the lifespan of your current incandescent. By changing your old light bulbs to a CFL or LED bulb, you will not only lower your electricity bill, but also reap the benefits of their longer lifespan, which will require less bulb replacements.

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Be sure when installing your energy-efficient bulbs that you are using the right lighting color. While efficiency is important, the right color can go a long way in creating a suitable room ambience.

A bright white bulb can give a blue-ish color, while a daylight bulb can offer a warm feel. In places like your garage or closets, a bright white bulb is helpful for functionality, but can come off sterile and cold when used in more intimate settings, like living or dining rooms.

The latest lighting innovations have combined smartphone and home-automation technology with light bulbs, giving us bulbs that can not only be controlled by our phone, but also offer Bluetooth capability. Your home can be both more efficient and more tech-savvy with the usage of smartphone-controlled light bulbs that can schedule on-and-off routines, change color, and even play music. These advanced bulbs that can be found at your local hardware store are surprisingly affordable, and are easily pairable with any smartphone.

So, the next time you are sheltered inside from the cold rain this season, take a maintenance stroll around your interior. Making simple corrections and updates can require almost no tools and little time, ideal for even the least handy weekend warrior. Plus, your wallet will thank you the next time your energy bill arrives!

MILLENNIALS, THIS IS YOUR TIME

TO BUY A HOME

BY:

HUY VU

BUYER SPECALIST

Millennials were just graduating high school or college when the housing market collapsed and the economy entered the worst downturn since the Great Depression. Frustration over lack of jobs and stagnant wages forced many young men and women back into school, where rising school tuition shackled them with substantial student loan debts.

Furthermore, here in California, continually rising real estate prices and the extraordinary cost of living make saving for a down payment extremely difficult.

Due to these significant hurdles, for most millennials the prospect of owning a home may seem insurmountable. It’s no wonder that homeownership among those under age 35 has been falling.

However, perhaps even more than other generations, millennials are beginning to view homeownership as fulfillment of the American dream, and as their careers take off, many are reaching a point where they are ready to take the next step. In today’s Bay Area real estate market, there are a number of reasons why buying a home is an attractive proposition; a very low mortgage interest rate, homeowner tax benefits, and a steadily appreciating real estate market are among the most significant.

Understanding each of these would be a diligent step to take before entering into homeownership.

First of all, mortgage interest rates for home loans are still extremely low, but are likely rising this year and beyond.

With a low rate, this means that, over the life of the loan, homebuyers will potentially save hundreds of thousands of dollars in interest payments. Right now, rates are the lowest they have been for some time, but there is some indication this will change and the mortgage interest rates will soon start to climb. It would be timely to quickly take advantage of

these rates.

While many millennials still value mobility and flexibility in occupation and housing, many are settling into their careers and want to live in an area for more than a couple of years. Buying a home rather than paying rent makes more sense. The cost of rent for an apartment across much of the Bay Area is extremely high, and the difference in dollars between paying rent and paying a monthly mortgage might not be as much as you might think. For homeowners, expenses would include the mortgage payment, insurance, property taxes, and maintenance costs. If these are affordable, it might be worth buying a home because of the eventuality of paying off the mortgage and selling the property to getting a significant return on your investment. Furthermore, owning a home gives individuals substantial tax benefits. Among the most important are tax deductions on the interest paid on mortgage and property taxes.

Finally, homeownership is a core means for Americans to create wealth, and Bay Area homes are still appreciating respectably. While there will always be risk in buying a home, the desirability of Bay Area living, high-tech jobs, and foreign investment money keep the demand for housing very strong. Finding a good real estate agent who can help you find a new home in an appreciating area is key. When time to sell, savvy sellers will likely see a significant return on their investment. Remember that tax laws are friendly to homeowners. The capital gains exclusion allows sellers to keep $250,000 (or $500,000 for married couples) tax-free on the profit of the sale of their primary residence.

Millennials are projected to be a major player in the Bay Area housing market in the next year and beyond. An extremely helpful, completely free tip to potential buyers is to approach a reputable lending institution, have a real discussion regarding finances and credit history, and learn what it takes to be approved for a home loan. Be prepared to receive good advice on things a first-time homebuyer will need to work on in order to get a home loan at a good rate. In any event, potential buyers will have a much clearer pic-

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ture on where they stand. Buying a home can take a long time, and it’s a good idea to start making plans now or risk getting left behind by rising prices.

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2017

PREDICTIONS FOR SILICON VALLEY’S KEN DELEON, ESQ. HOUSING MARKET

“Prediction is very difficult, especially if it’s about the future.”

- Niels Bohr, Nobel laureate in physics n While prognosticating always has risks, doing so now feels particularly perilous in light of the recent presidential election result. Media pundits mostly got it wrong, and the few that hedged their bets were branded as outliers. However, real estate and elections have one thing in common: people want to know the results beforehand. Given this, I will cautiously wade in with my 2017 forecast for the Silicon Valley real estate market.

Here are my six specific predictions:

B Y:

DELEON FOUNDER

1. CAPITAL GAINS RATES WILL LIKELY DECLINE Republican presidencies have generally been associated with lower taxes, and this trend is likely to continue with the Trump administration. If Mr. Trump honors his 2016 campaign promises, then his administration will lower both short-term and long-term capital gains rates. Currently, short-term capital gains, which apply when one buys a home and holds it for less than a year, are taxed at ordinary income tax rates. Trump’s proposed plan lowers the top income tax bracket from 39.6 percent to 33 percent.

While Mr. Trump didn’t campaign for a change in the long-term capital gains

tax rate (which is at the 20 percent level), most pundits predict that the 3.8 percent capital gains surcharge to fund the Affordable Care Act will be eliminated if the Affordable Care Act is repealed or scaled back significantly. The net effect will be a lowering of long-term capital gains tax rates by that percentage.

While extrapolation isn’t particularly useful where Mr. Trump is concerned, some are already anticipating that the Trump presidency will only last one fouryear term. Rather than dwell on future uncertainties, investors and homeowners with significant capital gains will be incentivized to sell as soon as this drop in rates occurs, for fear of rates bouncing

back after 2020.

2. INVENTORY SHOULD INCREASE SLIGHTLY In past editions of this newsletter, I have discussed the strong correlation between an increase in capital gains tax rate and the reduction in the number of local homes coming to market. You may recall that the Internal Revenue Code provides that homeowners who have lived in their home for at least two of the past five years can sell their residence and pocket up to $250,000 in individual capital gains (or $500,000 in joint capital gains if married) without paying capital gains.

However, many long-term residents in prime locations have seen appreciation well beyond these levels, and are electing to hold their homes as part of their estate plans for future generations.

Consequently, it makes sense that the cities that have experienced the most appreciation are the ones that have seen the greatest decrease in inventory. For example, the annual number of single-family homes sold in Palo Alto declined from 474 homes in 2012 to 326 homes in 2015 (per the MLS). This was a drop of over 32 percent. More than one-half of this drop occurred between 2012 and 2013, when capital gains tax rates went up on both the federal and state levels. Expect increased inventory in 2017, partially caused by the lower capital gains rates.

3. INTEREST RATES WILL CONTINUE TO RISE. After being spoiled with historically low interest rates for a decade, the party is finally coming to a close. While many have focused on how much the Federal Reserve is raising the prime rate, the real attention should be on 10-year Treasury bonds. Yields on Treasury securities provide the best proxy for mortgage rates as increases in that rate translate into increased interest rates. The 10year Treasury bond has risen from 1.83 percent on November 7th (before the election) to over 2.5 percent at the time of this writing. This increase is based upon market anticipation that Trump will lower taxes, spend more on infrastructure, and generally create a more inflationary environment.

Many economists are now predicting that the 30-year fixed mortgage rate, which dropped as low as 3.25 percent after Brexit and is now around 4 percent, will rise to the 4.5 percent to 5 percent range by late 2017. In the short-term, rising mortgage rates should spur the housing market as savvy buyers rush to buy before rates rise higher. However, in the long-term, rising interest rates will dampen demand for entry-level housing as affordability drops significantly for these buyers.

4. TOWNHOMES AND CONDOS WILL CONTINUE TO OUTPACE SINGLE-FAMILY HOMES IN APPRECIATION. Historically, single-family homes have appreciated at a more rapid rate than townhomes and condos. Yet in 2016, townhomes and condos in San Mateo and Santa Clara Counties went up in value more than single-family homes. The strong appeal of Silicon Valley condos is that they are relatively affordable and often near downtown shops and restaurants. Young tech workers enjoy the turn-key aspect of condo ownership with no yard maintenance requirements, and downsizing baby boomers increasingly desire this “lock-and-leave” approach to living as they travel the world.

Indeed, the logic of this buying pattern is reinforced by the rising interest rates described above. Nineteen percent of the residents in Santa Clara County have the ability to purchase a median-priced home in 2016. That number will drop significantly as interest rates climb, and the only viable alternatives will be either longer commutes or more affordable condominiums and townhouses.

5. THE MARKET WILL NOT BE AS FRENZIED NEXT YEAR. While buyers are still out there, the days of exuberance have ended and we are now in a more balanced market. By the end of 2016, buyers were more cautious, and this trend will continue into 2017.

This “cooling down” can be empirically illustrated in two ways: • The total number of listings in Santa Clara County selling for more than their original list price declined

from 73 percent in 2015 to 67 percent in 2016.

• The sales price/list price ratio for single-family homes in both Santa Clara and San Mateo Counties dropped from 105 percent and 108 percent in 2015 to 103 percent and 105 percent in 2016, respectively (per MLS statistics).

While occasional miracles happen, such as one of our sellers recently getting more than $1.25 million above list price on a home listed below $3 million, generally the market has moderated and sellers should adjust their expectations accordingly.

6. MORE SALES IN THE UPPER END WILL OCCUR. As you would anticipate with all of the economic and political uncertainty around the world, many affluent buyers continue looking for a safe asset class in which to invest. The DeLeon Platinum brand saw an increase in sales at or over $5 million from just 10 in 2015 to 26 sales in 2016 (per BrokerMetrics), allowing DeLeon Realty to be the top selling office in Santa Clara County, and one of the top in San Mateo County, for luxury home sales (per BrokerMetrics)—with this increase projected to continue in 2017. With both an appreciating dollar and strong long-term prospects for Silicon Valley, I project that there will be renewed strength in purchasing homes over $5 million.

While there is some uncertainty heading into 2017, DeLeon Realty does project appreciation between four and seven percent for the cities that we serve in Silicon Valley. While this is below the double-digit price growth that we experienced between 2010 and 2015, our local housing market will continue to be a stable and strong investment.

REPRESENTING THE BUYER AND THE SELLER:

NOW A RISKIER PROPOSITION AS A MATTER OF LAW BY:

SIGRID WAGGENER, ESQ.

LISTING SPECIALIST

On November 21, 2016, the California Supreme Court issued its decision in Horiike v. Coldwell Banker et al. (Sup. Ct. Op. S218734) (“Horiike”). As we reported in our November 2016 issue of The DeLeon Insight, if the Supreme Court upheld the Appellate Court’s ruling, that holding could adversely affect the industry’s business-as-usual approach to representing both the seller and buyer1 in a real estate transaction. Because the Supreme Court did in fact uphold the Appellate Court’s ruling, traditional brokerages and their sales personnel face additional legal exposure.

As discussed in detail in our previous article on this topic, Horiike involved the purchase of a luxury home where the seller and buyer were represented by different salespersons from Coldwell Banker based in separate branch offices.

The salesperson representing the seller failed to disclose to the buyer there were multiple, conflicting measurements for the home’s total livable space. The buyer sued Coldwell Banker and the salesperson representing the seller, and argued, among other things, that: (1) Coldwell Banker was acting as a dual agent in the transaction; (2) because Coldwell Banker was acting as a dual agent, both it and the salesperson representing the seller owed a fiduciary duty to the buyer; and (3) in failing to disclose the fact that conflicting measurements existed, both Coldwell banker and the salesperson representing the seller breached their respective fiduciary duties. The Court of Appeal was persuad-

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ed by the buyer’s arguments and found in favor of the buyer and against both defendants. Coldwell Banker and the salesperson representing the seller appealed to the Supreme Court.

The legal question ultimately considered by the Supreme Court was much narrower in scope than what was presented in the courts below. In particular, neither party disputed the Appellate Court’s determination that: (1) Coldwell Banker was acting as a dual agent in the transaction; and (2) as a dual agent, Coldwell Banker owed the buyer a fiduciary duty to disclose the living space measurement discrepancy. Instead, the high court confined its legal inquiry to “whether [the salesperson representing the seller], as an associate licensee representing Coldwell Banker…owed a duty to [the buyer]…to disclose all facts materially affecting the [home]….” In other words, the Supreme Court’s consideration was confined to whether the law imposes the same duty to disclose on a

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seller’s representative that is imposed on the representative’s employing brokerage when that brokerage is acting in a dual agency capacity.

Citing Civil Code section 2079.13(b), the Supreme Court concluded that the employing brokerage’s fiduciary duties flow from it to the salesperson representing a seller, such that the salesperson “was thus charged with carrying out Coldwell Banker’s fiduciary duty to learn and disclose all material information affecting the value or desirability of the property.”

In other words, a salesperson representing the seller has a fiduciary duty to the buyer if the buyer’s salesperson happens to work for the same brokerage as the seller’s representative.

The Supreme Court’s decision arguably makes things more complicated for individual salespeople operating under the auspices of a traditional brokerage. In order to fulfill their fiduciary obligations to buyers, sellers’ representatives may be required to disclose information to a buyer that could hurt the sellers’ prospects in the transaction. However, sellers’ representatives cannot go so far in their disclosures that the duty owed to the seller is breached. A once simple transaction can quickly become a complicated balancing act amongst one’s legal obligations.

Notably, the Supreme Court recognized the additional complexity its decision created for the real estate industry, but charged the legislature with amending the governing laws if and when the legislature determines that Horiike creates an unsatisfactory situation.

However, until the legislature elects to act, Horiike is the law of the land, and sellers’ representatives must be mindful of their expanded fiduciary duties.

1This practice is referred to as “dual agency.”

NEIGHBORHOOD SPOTLIGHT

NORTH LOS ALTOS OF LOS ALTOS

BY:

ROB PARISH, ESQ.

BUYER SPECIALIST

Considering rush-hour traffic along Foothill Expressway these days, it is hard to imagine a time when much of present-day Los Altos was orchards and ranch land belonging to the most prominent capitalist of her day, firearms heiress Sarah Winchester. In 1904, she sold her 165-acre ranch (El Sueño) to the Southern Pacific Railroad so the company could create a spur line connecting Palo Alto/ Mayfield and Los Gatos. The tracks for that line created the right-of-way that is now occupied by Foothill Expressway, and the town of Los Altos grew up where Adobe Creek crossed under the train tracks about halfway along the line.

The 103-year-old Los Altos passenger depot was the focal point for the new town, and has since taken on new life as the Voyageur du Temps bakery. Occupying a three-block-wide corridor heading north along Main Street from the station, the downtown business district

RECAP

is a quaint, low-key place filled with boutiques, salons, cafes, and mom-andpop stores. This district has undergone a renaissance in the past few years due to investments by Google co-founder Sergey Brin, who lives a few short blocks from the station.

Old Los Altos was the first residential district on the south side of the tracks, and contains a mix of stunning estates and charming homes on lot sizes of 5,000 to 7,000 square feet. This area is also home to one of the city’s hidden secrets, Shoup Park. Named after the Father of Los Altos, Paul Shoup, Shoup Park is a 3.7-acre wooded paradise. During hot summer days, the large redwood trees there provide plenty of shade for visitors.

Radiating outward to the north from the downtown commercial district, North Los Altos exploded in size after World War II. Homes in this area are generally single-story, around 2,000 square feet in size, and sitting on quarter-acre lots.

With its convenient proximity to Apple, Google, and Stanford, this neighborhood is even more appealing today to busy

2016 NEIGHBORHOOD RECAP AVERAGE SALES PRICE AVERAGE PRICE PER SQUARE FOOT AVERAGE DAYS ON MARKET NUMBER OF SALES DELEON INSIGHT

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households that place a premium on avoiding a commute. Additionally, the acclaimed schools of the Los Altos School District and the Mountain View-Los Altos Union High School District reflect the growing diversity and accomplishment of the area’s residents.

The northern end of the area has been revitalized with the expansion and redevelopment of the San Antonio Shopping Center along El Camino Real. The construction of several new buildings of condominiums and apartments, together with a new Safeway, health clubs, retail establishments, and restaurants, has created a new destination for on-the-go families.

Demand remains strong as many properties are purchased by families who intend to either thoroughly upgrade the interiors or replace them with floorplans that will accommodate today’s busy lifestyles. For the coming year, DeLeon Realty forecasts above-average appreciation between five and six percent for this neighborhood.

$3,035,476 $1,322 20 81

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DELEON LISTINGS

1 0 718 Mo ra D rive, Los Altos H ill s (Uninco r po r a t ed Sa nt a Cla r a Co unt y ) P rice U p o n Reques t

A World-Class Masterpiece

Designed by acclaimed Swatt/Miers Architects, this gated, state-of-the-art residence holds 6 bedrooms and 8 full and 3 half baths within an easy stroll of gorgeous Rancho San Antonio Preserve. Built in 2016, this estate offers over 10,800 sq. ft. (per plans), including garage, on approx. 1.26 acres (per county). Seamless indoor and outdoor living areas overlook an infinity pool and present staggering bay views, and an additional parcel is available for expansion. Incredible features include invisible speakers, a posh theater, an elevator, and a fabulous guesthouse.

For video tour & more photos, please visit:

www.10718Mora.com

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DELEON LISTINGS 1 8 8 7 Wa ln ut D rive, M ountain V iew O ffered a t $2,188,000

Quiet, Well-Kept Luxury

Standing on an immaculately landscaped corner property, this 3 bedroom, 2 bath residence forms the perfect low-key retreat. Carefully chosen upgrades modernize the interior’s subtle elegance, including an extravagant, newly remodeled kitchen. Formal living, dining, and family rooms offer plenty of entertaining space, and the oversized garage can convert to a game room. Soothing outdoor areas include a private backyard haven. Stroll to local shopping and outstanding Los Altos schools like Springer Elementary (API 955) and Blach Intermediate (API 958), and quickly bike to lovely Cuesta Park and Mountain View High (buyer to verify eligibility).

For video tour & more photos, please visit:

www.1887Walnut.com

8 8 1 U n iversity Avenue, Los Altos O ffe re d a t $2 ,488,000

Ideally Located and Inviting Alongside a calm cul-de-sac, this appealing home provides a fireplace, comfortable gathering areas, and hardwood floors. The bedrooms are designed for flexibility, while the outdoors provide an inviting front porch and a spacious backyard with patios. Within moments of downtown Los Altos, you can stroll to Covington Elementary (API 975), and quickly access Pinewood School campuses, Blach Intermediate (API 958), and Los Altos High (API 895) (buyer to verify eligibility).

For video tour & more photos, please visit:

www.881University.com

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DELEON LISTINGS

1 4 123 Tra c y Court, Los Altos H ills O ffe re d a t $ 7,788,000

High-Tech Architectural Masterpiece

Meticulous attention to detail augments the design of this breathtaking 7 bedroom, 6 bathroom residence of nearly 6,000 sq. ft. (per appraisal) that occupies premises of 1.3 acres (per appraisal). Highly sustainable and stateof-the-art, the smart home includes a reliable, eco-friendly geothermal energy system and versatile spaces like a two-story au pair unit. As functional as it is stylish, this contemporary retreat effortlessly opens to outdoor living areas highlighting a kitchen, a spectacular pool with an exciting water feature, and a custom play structure. Enjoy living within steps of Pearson-Arastradero Preserve and with access to exceptional Palo Alto schools (buyer to verify eligibility).

For video tour & more photos, please visit:

www.14123TracyCourt.com

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DELEON LISTINGS

3 7 5 Wa lsh Road, Atherton O ffered a t $4,988,000

Woodland Retreat in Exclusive Atherton Tucked within leafy grounds of over an acre (per county) that establish natural privacy, this treehouse-like 4 bedroom residence of 3,120 sq. ft. (per county) with an additional lower level provides 3 full and 2 half baths, and an adjacent parcel of almost an acre (per county) is also available for development. The breezy floorplan ideal for entertaining accesses an elevator and a garage with a studio. Alluring outdoor areas include a pool and multiple decks. Unusual for elite Atherton, the property offers hillside living, yet retains excellent proximity to prestigious clubs and private schools.

For video tour & more photos, please visit:

www.375Walsh.com

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DELEON LISTINGS

1 2 7 P in o n Dr ive, Portola Valley O ffe re d a t $ 16,988,000

Lavish Woodland Sanctuary

Flaunting elevated views of the Santa Cruz Mountains, this trophy residence designed by Michael Moyer celebrates natural privacy and one-of-a-kind amenities. Holding 3 bedrooms and 3 full and 3 half baths, the home also offers a 2 bedroom, 2 bath guesthouse and an interior clad with walnut and French limestone. Extraordinary highlights include a tri-stop elevator, a jaw-dropping wine cellar, and a palatial master retreat. A floating staircase leads to gardens offering waterfalls, a spa, and a fully functional guesthouse. Undevelopable open space surrounds the two parcels of nearly 18 acres (per county) that form this property, ensuring continuous privacy and unspoiled panoramas.

For video tour & more photos, please visit:

www.127Pinon.com

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DELEON LISTINGS

1 5 A ra p a ho e Court, Portola Vall ey Off ered a t $4,788,000

Stylish Refuge with Exciting Outdoors Thick, wooded surroundings provide a screen of natural privacy around this lavishly upgraded 5 bedroom, 3 bath residence of nearly 4,000 sq. ft. (per county). Set along a serene cul-de-sac, this exquisite property of just over one acre (per county) is loaded with outdoor features like an alluring pool, a putting green, and a sport court, while flexible interior spaces blend contemporary comforts with understated elegance. Two fireplaces, soaring ceilings, multiple French doors and skylights, immense storage, and extravagantly remodeled bathrooms are just a few of the multitude of delightful amenities. Live within moments of shopping, dining, and outdoor recreation, and easily access sought-after public and private schools.

For video tour & more photos, please visit:

www.15Arapahoe.com

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DELEON LISTINGS

5 5 5 Ma diso n Way, Palo Alto O ffe re d a t $ 5,988,000

Classic Design, Contemporary Drama

Bask in the elegant, open warmth of this highly versatile 5 bedroom, 5 bath residence of over 3,500 sq. ft. (per plan), including garage, that occupies a lot of just over 9,600 sq. ft. (per city). Tucked within distinguished Crescent Park Addition outside the 100-year flood zone, the home built in 2015 is meticulously designed with cutting-edge automated features and luxurious imported details like Italian marble and floors of European hardwood. Multiple French doors open to pristine outdoor spaces prime for entertaining, showcasing a courtyard, a barbecue, and a fire-pit. Stroll to Eleanor Pardee Park and Duveneck Elementary (API 956), and quickly reach exciting University Avenue and other outstanding schools (buyer to verify eligibility).

For video tour & more photos, please visit:

www.555MadisonPA.com

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DELEON LISTINGS

12661 Ro bleda Road, Los Altos H ills Off ered a t $9,688,000

The Ultimate Holiday Gift Give the most unforgettable gift this holiday season: a preeminent country estate. Infusing Old World majesty with 21st-century comforts, this magnificent 6 bedroom, 6.5 bath chateau of over 8,500 sq. ft. (per county) with an additional poolhouse of 716 sq. ft. (per county) occupies gated premises of over 1.5 acres (per county). Mesmerize your guests with the tri-level interior’s vast scale of luxury, including marble bathrooms, graceful murals, a four-car garage, and a wine vault with a full-service bar. Host grand parties in luxurious gathering rooms and on expansive terraces, or enjoy low-key gatherings in the pristine poolhouse. With a peaceful location near outdoor recreation, prestigious schools, and premier companies, this residence will delight even the most discerning recipient.

For video tour & more photos, please visit:

www12661Robleda.com

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DELEON LISTINGS

2 7 811 Sa ddle Court, Los Altos Hills O ffe re d a t $ 5,988,000

Hilltop Solitude with Panoramic Views Well-appointed indoor and outdoor spaces take full advantage of the astonishing vistas displayed throughout this 5 bedroom, 6.5 bathroom home of 6,598 sq. ft. (per county), which includes grounds of 1.94 acres (per county). The multi-level design is equipped for grand-scale entertaining and boasts five fireplaces, two kitchens, an indoor pool, and a garage that can hold five cars. Within moments of Highway 280, this captivating home balances privacy and natural beauty with prime convenience to urban amenities, including excellent Palo Alto schools (buyer to verify eligibility).

For video tour & more photos, please visit:

www.27811Saddle.com

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DELEON LISTINGS

12 0 0 8 Adobe Creek Lo d g e Ro a d , L os A l tos Hi l l s Off er ed at $6,788,000

Rich Living, Alluring Serenity Located along an exclusive cul-de-sac, this regal, gated 6 bedroom estate of 6,480 sq. ft. (per county) includes 6 full and 2 half baths, and exudes peace and privacy on premises of approx. 1.67 acres (per county). Reached by an extensive paver driveway, the mansion includes a four-car garage, three fireplaces, a library, a summer kitchen, and numerous rooms designed for versatility. Marble finishes and columned living spaces underscore the luxurious ambience, while the immense grounds offer a heated pool. Stroll to trails leading into Rancho San Antonio Open Space Preserve, quickly bike to Hidden Villa, and enjoy easy access to prime Los Altos schools.

For video tour & more photos, please visit: www.12008Adobe.com

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DELEON LISTINGS

2 37 Mapache D ri ve, Porto l a V a l l ey O f f er ed at $7,988,000

Fabulous Resort-Like Compound Immersed in natural privacy, this gated, creek-side property of 3.33 acres (per county) forms one of the largest flat lots in Portola Valley. The luxuriously upgraded estate is every entertainer’s dream, and includes a guesthouse, a poolhouse, and a studio for a total of 5 bedrooms, 7.5 bathrooms, and a living area of approx. 8,100 sq. ft. (per drawings). Excellent amenities include six-car garage parking, a sauna, and a heated pool and spa. Stroll to trails throughout the surrounding woodland paradise while easily accessing local shopping and scenic open spaces.

For video tour & more photos, please visit: www.237Mapache.com DELEON INSIGHT

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MARKET CONDITIONS

DeLeon Market Conditions Atherton Snapshot Atherton Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Atherton Inventory # of New Listings

Price/SqFt Ratio

Cupertino Snapshot Cupertino Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Cupertino Inventory # of New Listings

Price/SqFt Ratio

Hillsborough Snapshot Hillsborough Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

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Hillsborough Inventory # of New Listings

Price/SqFt Ratio

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MARKET CONDITIONS

DeLeon Market Conditions Los Altos Snapshot Los Altos Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Los Altos Inventory # of New Listings

Price/SqFt Ratio

Los Altos Hills Snapshot Los Altos Hills Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Los Altos Hills Inventory # of New Listings

Price/SqFt Ratio

Menlo Park Snapshot Menlo Park Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Menlo Park Inventory # of New Listings

Price/SqFt Ratio

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MARKET CONDITIONS

DeLeon Market Conditions Mountain View Snapshot Mountain View Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Mountain View Inventory # of New Listings

Price/SqFt Ratio

Palo Alto Snapshot Palo Alto Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Palo Alto Inventory # of New Listings

Price/SqFt Ratio

Portola Valley Snapshot Portola Valley Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

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Portola Valley Inventory # of New Listings

Price/SqFt Ratio

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MARKET CONDITIONS

DeLeon Market Conditions Sunnyvale Snapshot Sunnyvale Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Sunnyvale Inventory # of New Listings

Price/SqFt Ratio

Redwood City Snapshot Redwood City Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Redwood City Inventory # of New Listings

Price/SqFt Ratio

Woodside Snapshot Woodside Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Woodside Inventory # of New Listings

Price/SqFt Ratio

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PRSRT STD ECRWSS U. S. Postage Paid Palo Alto, CA Permit No. 1

®

DeLeon Realty 1717 Embarcadero Road Palo Alto, CA 94303

LOCAL POSTAL CUSTOMER

Selling Your Home in Silicon Valley for Top Dollar

Thursday, February 23, 2017 6:00 - 8:00 p.m.

Please join DeLeon Realty at our February Seminar. Gain insight from Michael Repka, the Managing Broker and General Counsel of DeLeon Realty, into how you can best prepare and market your home to achieve the maximum sales price. Also hear the latest market updates from Ken DeLeon, the most successful real estate broker in Silicon Valley.

Venue: Palo Alto Hills Golf & Country Club, Grand Ballroom 3000 Alexis Drive, Palo Alto

To RSVP, please contact 650.543.8500 or by email: RSVP@deleonrealty.com ®

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650.488.7325 | www.DELEONREALTY.com | CalBRE #01903224 JANUARY 2017

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