DeLeon Realty’s Annual Summer Listings Event Returns!
An Abundance of Spectacular Homes to Choose From!
• Silicon Valley Pivots Its War on Gas Appliances
• Buying and Selling Real Estate Between School Years
• Unexpected Strength in the 2024 Spring Real Estate Market
• Commission Case Update: Latest Developments
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
Average sale price for single-family homes from 6/2022 to 5/2023, compared to the period from 6/2023 to 5/2024.
$2,500
$2,000
Price per square foot ratio for single-family homes from 6/2022 to 5/2023, compared to the period from 6/2023 to 5/2024.
6/2022 - 5/2023 6/2023 - 5/2024 Average Sale Price
6/2022 - 5/2023 6/2023 - 5/2024
Source: MLSListings, Inc., as of June 4, 2024 Criteria: Single Family Residential
DRE #01903224
Managing Broker: Michael Repka
WE ARE LOCATED AT: 1717 Embarcadero Road, Palo Alto, CA 94303 650. 543. 8500 | DELEONREALTY.com 中文服務 | 650.785.5822
Founder — Ken DeLeon
CEO & Managing Broker — Michael Repka General Counsel — Colette Thomason
CONTRIBUTORS: Michael Repka and Alexander J. Lewicki (DRE #02189814)
Contact Ken DeLeon for exceptional buying opportunities at 650.543.8501 | DRE #01342140
Contact Michael Repka to learn about our Platinum packages and incredible listing services for sellers at 650.488.7325 | DRE #01854880
By Alexander J. Lewicki, Esq.
Buying and Selling Real Estate Between School Years
By Michael Repka
Unexpected Strength in the 2024 Spring Real Estate Market
By Michael Repka
DISCLAIMER:
As prominent members of the real estate community, we respect all pre-existing listing agreements. If your home is currently under a listing contract, or if you are contractually obligated to work with a particular agent because you signed a Buyer Broker Agreement or similar form, please do not construe this publication as a soliciation. On the other hand, if you have not yet selected an agent, we urge you to consider our team's resources and design acumen, as demonstrated in this proprietary publication, which was created completely in-house by our talented marketing team.
Advertising. All rights reserved. DeLeon Realty is not a law firm and the publication of this information does not create an attorney-client relationship with this brokerage or any of its members. Likewise, the material in this publication does not constitute a solicitation and is not intended to provide legal advice.
By Michael Repka
The content in this publication is informational only and may not reflect current legal developments. This publication should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. DeLeon Realty expressly disclaims all liability with respect to actions taken or not taken based on any or all the contents of this publication. See also deleonrealty.com for additional disclaimers.
Legal services are provided by the Integra Law Group, LLP at no additional charge to our clients.
By Alexander J. Lewicki, Esq.
Readers of our newsletter might recall our coverage of local cities and towns restricting the use of gas appliances in new construction through the enacting of various building codes aimed at furthering the state’s climate change initiatives. As a champion of these new building codes aimed at curbing greenhouse gas emissions, Berkeley had found itself on the losing end of a Ninth Circuit Court of Appeals decision that held the city’s ban on gas appliances to be infringing on federal law.
In January of this year, the Ninth Circuit rejected Berkeley’s request for a new hearing, officially ending the saga and effectively sending a message to the various municipalities throughout the state that had enacted similar laws.
In the wake of this decision, we have seen a wave of cities reacting cautiously to avoid being swept into similar litigation. In February, the Palo Alto City Council agreed to stop enforcing its ban on gas appliances. Other cities, such as Menlo Park, Sunnyvale, and Cupertino have all followed suit by suspending the enforcement of comparable laws while simultaneously looking into ways to continue with their energy efficiency goals.
Instead of outright banning gas appliances, we are seeing a shift toward a strategy being labeled as the “one margin” standard, which strongly encourages builders to continue to utilize electric appliances by making it otherwise difficult to meet the energy efficiency requirements through the installation of gas appliances alone. This type of approach has already been adopted in cities such as San Jose, while Palo Alto, Menlo Park, and Atherton have all begun to conduct study sessions to assess the viability of adoption.
The good news for restaurant owners and other proponents of gas stoves is that these pivots toward energy efficiency standards, as opposed to outright bans of gas appliances, should result in further flexibility in the installation of gas stoves, barbecues, and even fire pits. This is because 75%+ of emissions from a home are typically a direct result of water heaters and furnaces. So, while the use of electric water heaters and furnaces (i.e., heat pumps) may become all but necessary to keep up with the new codes, gas stoves should still be a feasible inclusion – at least for now.
While environmentalists may be lamenting the changes resulting from the Ninth Circuit’s decision, most homeowners we encounter seem to be happy to have a choice in their cooking appliances. And for those individuals, we note that now may be a good time to revise those permit applications and install some gas appliances before the laws change again. As always, the DeLeon Team is continuously monitoring these changes to keep our clients informed. If you are interested in working with our Buyers Team, please give me a call at (650) 543-8528
By Michael Repka
Many buyers want to purchase a new home during the summer and settle in before the new school year begins. Similarly, some sellers prefer to wait for their children to finish the school year before selling. Nevertheless, many Realtors® advise sellers to wait until September to list their homes for sale.
As a result, there are fewer new listings coming on the market, and buyers tend to lose a bit of focus on their home search. However, this does not have to be the case.
About a decade ago, DeLeon Realty started prioritizing clients’ desires over blindly following tradition merely because that is how things “have always been.” The outcomes have been remarkable.
Describing our “Summer Splash” sales event as successful would be an understatement. By May 31st, we had already secured a lot of fantastic listings scheduled for launch between July 8th and July 21st. As a result, buyers will have a range of exceptional properties to choose from, with the opportunity to close before the 2024/2025 academic year.
Since this newsletter takes some time to print and deliver, not all Summer Splash listings are included here. Please visit our website on or after July 8th to see all available properties.
• 5 Bedrooms
• 3.5 Bathrooms
• 3,079 Sq. Ft. Home
• 6,212 Sq. Ft. Lot
• Beautiful landscaping
• Family room with fireplace
• Expansive primary suite
• Peaceful outdoor space
• 5 Bedrooms
• 3 Bathrooms
• 2,180 Sq. Ft. Home
• 7,659 Sq. Ft. Lot
• Nicely landscaped yard
• Parquet hardwood floors
• Large paver patio
• Attached 2-car garage
• 4 Bedrooms
• 3 Bathrooms
• 2,209 Sq. Ft. Home
• 11,625 Sq. Ft. Lot
• Large corner lot
• Expansive family room
• Refinished hardwood floors
• Ample patio space
• 3 Bedrooms
• 3.5 Bathrooms
• 2,288 Sq. Ft. Home
• 7,952 Sq. Ft. Lot
• Large, fenced-in yard
• Arts & Craft architecture
• Centerpiece fireplace
• Detached bonus room
• 6 Bedrooms
• 10 Baths (8 Full, 2 Half)
• 9,950 Total Sq. Ft. Home
• 4.39 Acre Lot
• World-renowned architect
• Lush, landscaped grounds
• Detached studio
• Large swimming pool
• 5 Bedrooms
• 4.5 Bathrooms
• 4,578 Sq. Ft. Home
• 15,750 Sq. Ft. Lot
• Lush front courtyard
• Mediterranean aesthetics
• Pool and spa
• Private front patio
• 6 Bedrooms
• 7 Baths (5 Full, 2 Half)
• 4,950 Sq. Ft. Home
• 7,935 Sq. Ft. Lot
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• 4 Bedrooms
• 4.5 Bathrooms
• Nearly 2,900 Sq. Ft.
• 7,200 Sq. Ft. Lot
• Contemporary architecture
• Multi-level floorplan
• Tesla charger
• Pool, spa, and fireplace
By Michael Repka
The real estate market faced challenges in 2023 due to a dramatic and unprecedented rise in mortgage rates. Buyers, accustomed to rates in the low 3 percent range, were suddenly confronted with rates around 7 percent. This dramatic increase left many buyers in shock, causing them to pull back on their home searches.
At the same time, many sellers feared that listing their homes in such a sluggish market would result in low offers, if any. As a result, many discretionary sellers chose not to put their homes on the market. Fortunately, this decision led to exceptionally low inventory, which had a stabilizing effect and helped maintain relatively high sales prices irrespective of the higher interest rates.
Although 2023 was a tough year in local real estate, 2024 is off to a much better start. Buyers have become somewhat accustomed to the higher interest rates, which are more aligned with historical norms, and the Silicon Valley economy remains strong. While
many buyers have redefined their search criteria due to practical financial realities, most realize that they strongly prefer home ownership over renting. It is also important to note that we have received multiple strong offers on many of our listings despite a dramatic drop in the commissions that sellers must pay to sell their home.
Despite some overall weakness in Silicon Valley, certain towns fared better than others. For example, the high prices often associated with Palo Alto led many buyers to expand their search to areas offering more value for their money. Consequently, both Los Altos and Menlo Park remained more resilient than Palo Alto. Similarly, homes in Los Altos Hills and Portola Valley weathered the storm relatively well.
Before the global pandemic, buyers favored homes with good “walkability.” Properties near dining areas, or establishments like Starbucks, were very
popular, even if the home or lot was slightly smaller than ideal. That has all changed since COVID.
Now, buyers are placing a greater premium on homes with more square footage, both indoors and outdoors, and recreational amenities are highly sought after. Properties with pools, putting greens, play structures, home theaters, and wine sellers are in high demand. Many buyers who have been living in, or looking at, prime areas of Palo Alto such as Old Palo Alto, Crescent Park, and Professorville are now considering larger homes on acre-plus lots in Portola Valley, Woodside, Atherton, and Los Altos Hills. We have seen particular strength in Palo Alto Hills and the parts of Los Altos Hills that are mapped to Palo Alto schools.
Buyers can expect continued strength in estate-type properties, while smaller, more centrally located properties will rebound due to softening prices and increased relative value. However, it is important to stay aware of available inventory. If there is a spike in listings as the market strengthens compared to last year, supply may outpace demand, which buyers will find to be a welcome change due to the added selection and the resultant reduction in sales prices.
Adjustable-rate mortgages reaching the end of their lock-in period could also lead to a significant increase in the supply of homes available for sale. Many homeowners bought or refinanced their homes when rates were at their lowest in 2020. For those with 5-year or 7-year adjustable-rate mortgages (“ARMs”), that expiration date is approaching. By way of example, a couple who could comfortably afford the payments on their $3 million mortgage at 1.875%, a rate available in 2020, may feel uneasy as that rate adjusts upwards by 2% per year until it reaches 6% to 7%.
Conversely, the high cumulative built-in capital gains on California real estate, which has been a fantastic investment over the years, coupled with the inertia caused by low interest on 30-year fixed-rate mortgages, could dissuade many homeowners from selling.
It remains to be seen how the strong motivations to sell will weigh against equally compelling reasons not to sell. However, it is undeniable that the rapid appreciation of Silicon Valley real estate has been bolstered by artificially low rates. If and when inventory increases, it is inevitable that we will see downward pressure on prices.
• 3 Bedrooms
• 2.5 Bathrooms
• 2,510 Sq. Ft. Home
• Peaceful, verdant community
• Hardwood floors
• Attached garage
• Peaceful backyard deck
• 4 Bedrooms
• 2.5 Bathrooms
• 2,490 Sq. Ft. Home
• 12,000 Sq. Ft. Lot
• Covered porch
• Large family room
• New gas fireplace
• Solar-heated pool
• 7 Bedrooms
• 4 Bathrooms
•
•
•
•
•
• 3 Bathrooms
• 2,550 Sq. Ft. Home
• 8,728 Sq. Ft. Lot
• Remodeled interiors
• Open kitchen
• In-law unit
• Peaceful, private backyard
• 7 Bedrooms
• 7.5 Bathrooms
• 8,017 Total Sq. Ft. Home
• 3.1 Acre Lot
• Newly completed in 2024
• Modern minimalist exterior
• Stunning interiors
• Serene backyard grounds
138 GOYA ROAD, PORTOLA VALLEY Offered at $22,988,000
• 6 Bedrooms
• 7.5 Bathrooms
• 7,396 Total Sq. Ft.
• 44,812 Sq. Ft. Lot
• Prestigious Location
• High-end Finishes
• Resort-like Grounds w/Pool
• Top Schools 8Brittany.com
• 5 Bedrooms
• 6.5 Bathrooms
• 5,533 Sq. Ft. Home
• 11,000 Sq. Ft. Lot
• Contemporary architecture
• Entertainment center
• 3-level floorplan
• Lower patio area 1520MontebelloOaks.com
1520 MONTEBELLO OAKS CT., LOS ALTOS Offered at $6,488,000
• 5 Bedrooms
• 5.5 Bathrooms
• 5,720 Total Sq. Ft. Home
• 40,890 Sq. Ft. Lot
• Luxurious Appointments
• Incredible Yard w/Pool
• Spacious Guest Home
• Top Schools
• 5 Bedrooms
• 3 Bathrooms
• ~3,000 Sq. Ft. Home
• 13,500 Sq. Ft. Lot
• Lush, oasis-like feel
• Expansive living room
• Detached guest home
• Sonos sound system
$4,488,000
• 4 Bedrooms
• 3 Bathrooms
• 2,393 Sq. Ft. Home
• 4,266 Sq. Ft. Lot
• 2-level floorplan
• Appealing architectural lines
• Flagstone patio
• Gorgeous backyard
• 4 Bedrooms
• 2 Bathrooms
• 1,950 Sq. Ft. Home
• 8,775 Sq. Ft. Lot
• Beautifully landscaped garden
• Expansive family room
• Zen-like backyard
• Airy ambiance
$2,788,000 2040Jardin.com
• 3 Bedrooms
• 3.5 Bathrooms
• Approx. 2,300 Sq. Ft. Home
• 5,000 Sq. Ft. Lot
• Completed in 2024
• Eco-friendly design
• High energy efficiency
• Delightful backyard
• 6,417 Sq. Ft. Home
• 4.4 Acre Lot
• Interior designed by the acclaimed Wiseman Group
• Catering-grade island kitchen exudes Italian charm
• Master suite enjoys sitting area with dry bar and twosided fireplace
• Rear terrace with barbecue overlooks infinity pool
By Michael Repka
With the National Association of Realtors, Compass, Keller Williams, RE/MAX, and the parent corporations of Coldwell Banker, Sotheby’s, and Intero (among others) all agreeing to settle the massive class action lawsuits against them, one might expect significant changes in how real estate transactions are conducted. However, many local real estate agents seem to be clinging to the ways of old.
The plaintiffs in the various lawsuits maintained consistent and straightforward arguments: Agents have conspired to keep artificially high commissions by pressuring sellers to pay exorbitant fees to the agent representing the buyer, in addition to what they already pay their own listing agent. These compensation offers were generally non-negotiable once included in the listing agreement. This made it difficult, if not impossible, for sellers to negotiate lower commissions, even if the buyer found the home independently and the buyer’s agent’s involvement was minimal.
As part of the unprecedented $940 million-plus settlement reached by the real estate industry, agents will no longer be permitted to offer any compensation to agents representing buyers in the Multiple Listing Service (“MLS”).
Thus far, many local Realtors® express confidence in their ability to maintain the status quo, despite the new restrictions that prohibit the inclusion of any commission to the buyer’s agent in the MLS.
The prevailing idea is for agents to “suggest” that sellers continue offering high commissions to the buyer’s agent in the listing agreement, but not publish these amounts on the MLS. Instead, buyer’s agents would be directed to access the details on the offered commission amount from a specified website. Each agent or brokerage would create their own method to disseminate the commission information to other agents - there would be no centralized website that savvy buyers could check to see the commission for all properties on the market.
If implemented, the lack of transparency will lead to a structure significantly worse for clients than the pre-settlement situation. Currently, buyers can see the commission offered to the buyer’s agent on public-facing websites, such as Zillow, Trulia, and Redfin. However, this information comes directly from the MLS.
Since buyers can currently view the offered commission on each property, they can be vigilant against unethical agents who might steer them towards a specific listing due to its higher commission. Likewise, a prospective buyer would consider an agent’s criticism of a property with caution if they were aware that the seller was offering a lower commission.
Agents will inevitably pursue information about the offered commission diligently, while buyers are less likely to know where to find this information.
DeLeon Realty stands out as the only major local brokerage that consistently offers a Buyer'sside commission-free way for buyers interested in purchasing our listings. Namely, when buyers directly approach us, neither the buyer nor the seller incurs any buyer’s-side commission. While the seller still pays the listing side of the commission, we waive the entire amount that would typically be paid to the buyer’s agent.
We have gained significant recognition for implementing this client-favorable policy, and as a result, many buyers choose to approach us directly if they prefer not to pay an agent to help with their purchase.
This structure dramatically minimizes the risk of buyers passing on a property due to a buyer’s agent’s desire for more commission.
With the extensive media coverage surrounding the recent court cases and massive settlements, many sellers have become informed that they are not obligated to pay high commissions to buyer’s agents. Consequently, many sellers are asking their listing agents to offer much smaller commission amounts (sometimes even zero!) to buyer's agents. However, certain agents are pressuring (or advising) sellers to still offer 2.5% or more to buyer’s agents. This situation will lead to varied commission offers from one listing to the next.
Unless other brokerages begin to follow DeLeon Realty’s lead and offer a commission-free option for buyers to purchase their listings, it is highly likely that buyer’s agents will be tempted to steer their clients towards listings with higher inducements to the agent.
Ironically, this situation presents an opportunity for savvy and well-informed clients. Specifically, they should carefully consider listings that offer lower commission, although identifying these properties might be more challenging once the buyer’s agent commission is no longer listed in the MLS. However, with the right buyer’s agent, a buyer can negotiate an arrangement to target these types of opportunities.
The changes in the real estate industry will pose risks for both buyers and sellers in the months and years to come. Nevertheless, there will also be significant opportunities in terms of lower commissions and enhanced buying opportunities. For a detailed discussion of these changes and an opportunity to ask questions to Ken DeLeon and Michael Repka, join our live webinar on Aug 8 at 6 pm.
IN MOUNTAIN
• 4 Bedrooms
• 3.5 Bathrooms
• 1,850 Sq. Ft. Home
• Completed in 2024
• Open-concept
• Private balcony
• 2-car garage
853A SIERRA VISTA AVE., MOUNTAIN VIEW Offered at $1,988,000
• 3 Bedrooms
• 2 Bathrooms
• 2,110 Sq. Ft. Home
• 14,400 Sq. Ft. Lot
• Peaceful Atherton cul-de-sac
• Mid-century design
• Frosted glass doors
• Beneath redwood grove
• 4 Bedrooms
• 4 Bathrooms
• 3,256 Sq. Ft. Home
• 11,738 Sq. Ft. Lot
• Ample privacy
• Gas fireplace
• Oversized island
• Incredible backyard oasis
• 4 Bedrooms
• 3.5 Bathrooms
• 3,798 Sq. Ft. Home
• 15,725 Sq. Ft. Lot
• Modern exteriors
• Tremendous natural light
• Cathedral-style ceiling
• Private entertainer’s grounds
A home listed by DeLeon Realty before our design team made any changes.
The same home, refreshed and revitalized by the DeLeon Realty design team, sold for more than $1.5 million over asking.
• 4 Bedrooms
• 4.5 Bathrooms
• 4,367 Sq. Ft. Home
• 7,500 Sq. Ft. Lot
• Premium Materials
• Exquisite Spaces
• Great Backyard w/Fireplace
• Top Schools
425 SEALE AVENUE, PALO ALTO Offered at $7,988,000
425Seale.com
• 5 Bedrooms
• 4.5 Bathrooms
• 3,907 Total Sq. Ft.
• 18,972 Sq. Ft. Lot
848
• Luxurious Interiors
• Spacious Great Room
• Vibrant Grounds
• Top Schools 848NashRd.com
• 5 Bedrooms
• 4.5 Bathrooms
• 4,429 Sq. Ft. Home
• 15,366 Sq. Ft. Lot
• Colonial Masterpiece
• Luxurious Interiors
• Spacious Guest Home
1045 LASSEN DRIVE, MENLO PARK
Offered at $5,488,000
• Top Schools 1045Lassen.com
• 6 Bedrooms
• 6.5 Bathrooms
• 4,876 Sq. Ft. Home
• 88,078 Sq. Ft. Lot
• Mediterranean style
• Media room
• Large terrace
• Outdoor pavilion 14230WildPlum.com
• 5 Bedrooms
• 5.5 Bathrooms
• 4,013 Sq. Ft. Home
• 13,755 Sq. Ft. Lot
•
• High-end Finishes
• All En Suite Bedrooms
• Top Schools
• 6 Bedrooms
• 9 Baths (7 Full, 2 Half)
• 9,150 Sq. Ft. Home
• 48,454 Sq. Ft. Lot
• Gated Estate
• High-end Craftsmanship
• Theater, Gym, Wine Cellar
• Top Schools 481StockbridgeAve.com
$18,000,000
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
$4,400,000 $4,600,000
$4,200,000
$4,000,000
$3,800,000
$3,600,000
$3,400,000
$1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000
$4,000,000
Mountain View Inventory # of New Listings
$500,000
Inventory # of New Listings
$2,000,000
We have entered a new era where sellers no longer need to pay 2.5% or more to the buyer’s agent. Most of our sellers now offer only $10,000 to the buyer’s agent, and if the agent wants more, the buyer covers the difference – if not, the DeLeon Buyer’s Team will represent the buyer on our listing at no charge, even waiving the $10,000! This client-centric approach saves our sellers money and boosts buyer interest.
Our sellers work directly with Michael Repka, Audrey Sun, and our team of talented in-house professionals. They also enjoy access to our robust list of complimentary services, industry-leading marketing, and targeted outreach to the Chinese and Indian communities. Our record of success sets us apart from the competition. Schedule an appointment today to experience firsthand why so many Silicon Valley residents have entrusted us with selling their homes!
