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Atherton, CA consistently ranks as the #1 Elite Zip Code, Northern California’s pinnacle of wealth and extravagant luxury real estate. But it’s more than Forbes or Bloomberg rankings that have made Atherton legendary: it is the understated privacy, the supreme luxury of the architectural estates, and those who choose to call it home. Most of the estate residences rest on parcels of 1 acre or more. And most are gated and hedged, sequestered in a world of their own. Resort-like amenities abound, including lavish pools, tennis courts, guesthouses, wine cellars, and home theaters. Atherton’s geographic location could be described as “center of the universe” for the tech executive, company founder, or venture capitalist: the location is within minutes of Sand Hill Road, Stanford, and Silicon Valley’s technology empires. The bounty of San Francisco is still within a reasonable drive. The same can’t be said about luxury towns further south such as Los Altos Hills and Saratoga, which begin to incur longer traffic commutes into San Francisco. Two primary neighborhoods include West Atherton, just west of El Camino, and Lindenwood, which is just east of Middlefield Road and re-developed from the historic “Linden Towers” James C. Flood Estate (mansion torn down in 1936). West Atherton defines the height of desirability and prestige, regularly recording sales from $20,000,000 – $40,000,000 revolving around the polo fields of the Menlo Circus Club. Lindenwood prices are more approachable ranging from $7,000,000 to $14,000,000. Lindenwood is admired for its quiet streetscape (no through street access) that is tucked beyond the original pillars and gateway of the James C. Flood (Comstock Lode bonanza king) estate. Top public school assignments are shared with Menlo Park, and several elite private schools are also in the area, including Menlo School, Sacred Heart and Phillips Brooks.

2022 Atherton Listing Performance Index

Although it was only 1860, Faxon Dean Atherton was confident that his newly acquired 600 Acres were the most exquisite lands in the State. Fast forward, he surely didn’t imagine 29 home sales over $10,000,000 in one year for a Town named in his honor! Despite the well-publicized market shift that defined the second half of 2022, Atherton’s Median Sales Price was down just 2.5% for the year overall. There were still 29 sales over $10M, compared to 2021’s 36 sales.* Three sales were reported to MLS over $20,000,000, compared to 2021’s 8 MLS sales. The prevalence of off-market, Non-MLS sales cannot be overemphasized in telling the full story. In Spring 2022 Atherton recorded a handful of ultra high-end sales off the MLS, including closings at $44,800,000, $41,100,000, $36,000,000, and $22,500,000. Average price per sq. ft. for 2022 approached $2,000 per foot at a $1,960 average, eclipsing 2021’s mark of $1,823 per sq. ft. Average days on market for sold homes improved to 27 days compared to 2021’s 47 day average. Deeper analysis reveals a weaker second half of the year. 2022 posted 43 sales in the first half, and just 31 closed sales in the second half, a 28% decrease. The aforementioned Non-MLS ultra luxe sales all occurred in the first half of the year. The median sales price in the first half of 2022 was $7,900,000, while the second half was nearly a million less, with a $7,000,000 average median sale.

The most dramatic statistic for 2022 vs. 2021 was the drop in sales volume. 2022 saw a 29% decrease in total sales, posting 74 sales for the year vs. 2021’s 104 total sales reported to MLS. For perspective, the average total sales volume for the 6 years between 2015 and 2020 was 75 sales. Accordingly, the dip in sales speaks more to the strength of 2021, and reflects 2022 simply as a normalized market. In fact, Atherton had not reported 100+ total sales since the 102 closings in 2006. The high-point of volume traces back to the froth of the original Dot-Com era, with 1999 posting a whopping 116 total sales. For 2022, normalized volume was symptomatic of rising interest rates, stock market volatility, and pulling back from the 2020/2021 Covid-era urge to move. Rising interest rates kept some sellers from listing their Atherton homes, as re-entering the market as a buyer could have them facing a doubled interest rate on the purchase of their next home. But concern over stock portfolios was the more primary driver of the shift in this market. Looking to 2023, what happens to a very liquid buyer pool coming off of a lower volume year? These buyers are eager for new listings in more abundance, and ready to pounce on fresh inventory. This is the essence of “pent-up demand” that often accompanies market recoveries or upticks. Sellers in 2023 can expect copious eyes on their properties from all-cash buyers who have been watching from the sidelines for that perfect house.

Reflecting our publication title of: “Listing Performance Index,” what percentage of list price was achieved in 2022? The percentage of list price achieved averaged 99% for 2021’s 104 total sales, reflecting 42 of 104 sales (40%) closing at or above asking price. In 2022, this metric had improved to an average of 100% of list price achieved, reflecting 32 of the 74 total sales (43%) closing at or above asking price, some as high as 115% of list price achieved, such as 302 Atherton Avenue listed at $9,188,000 and sold at $10,600,000. By comparison, Hillsborough posted 54% of their sales at or above asking price in 2022, and Los Altos Hills reported 55% of 2022 sales at or above asking price. As a side note to this, Atherton’s median sales price for 2022 is more than $2,000,000 higher than both Hillsborough and Los Altos Hills, and overbidding is more common in lower price ranges.

All price points will continue to be a vehicle for development, with both principals and developers ready and able to invest in tear-downs. Such buyers may in fact find this market a perfect moment, as by the time their projects are built out, the market could be at a more healthy and active state. The sales at 175 Britton (sold $10,000,000) and 43 Santiago (listed for $26,998,000) are prime examples in the coveted Circus Club Area.

In Atherton, time stands still…while the Tesla has replaced the Four-in-Hand horse and buggy… generations have passed from the era of Faxon D. Atherton’s “Valparaiso Park” occupying the site of today’s Circus Club…and nostalgically, the last stand of Bonanza King James C. Flood’s Linden Towers is a distant mirage… one thing remains profoundly unchanged: Atherton still represents the most desirable enclave in the nation, the sanctuary for the most influential and accomplished…the pinnacle of luxury, actively writing new chapters on a revered heritage.

*For the purposes of the report we will address only those sales reported to MLS. Off-market, Non-MLS sales are not reflected in these statistics.

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