Archive for the 'Quarterly Updates' Category
All the usual signs of a market top are present: front page newspaper headlines of a “Hot Real Estate Market”, cocktail party conversations about recent home sales, and high-priced homes selling quickly.
GETTING READY FOR A CHANGING MARKET
Sellers: When the market changes, consumer confidence will drop; sales will slow; the number of homes on the market will rise; prices will stabilize and then fall. For those thinking of selling their home during the next 1-2 years, we recommend getting in touch with us now. We can advise you on how to prepare your home so it is ready to sell when the market begins to change.
Buyers: The key to success in a hot market is to select carefully. When the market is this hot, there is very little discount for irremediable issues (location issues, bad floor plans, etc). However, when the market cools those properties can decline in value by as much as 40%!
In the charts below, you’ll find 15 years of data for median sales price for the 1st Quarter sales for Palo Alto, Los Altos, Los Altos Hills, Menlo Park and Mountain View. You can’t find this level of historical data all in one place anywhere else, so if you have any questions or wish to get more info about your community, don’t hesitate to contact us.
The 49ers’ Colin Kaepernick is not the only hot commodity in town!
Homes on the San Francisco Peninsula continue to be on fire. Check out the charts below showing Q4 trends for the last 15 years in Palo Alto, Los Altos, Menlo Park, Los Altos Hills and Mountain View.
The first chart displays median price and percentage of list price received. As you can see, all areas showed improved median sales prices in Q4 2012 (except for Menlo Park which was merely a result of the lack of homes to sell in the upper price ranges). The second chart compares market activity – inventory of homes for sale, total sales and average days on the market. Inventories are at all-time lows in most areas and demand for those homes is fierce! We expect this pattern to continue for the foreseeable future. It will take a major financial shock of some sort to cool the current market.
If you have any questions or would like to discuss your specific neighborhood and real estate needs, don’t hesitate to shoot us an email or call. We invite you to share this post with anyone who owns real estate or is looking to buy in Palo Alto, Los Altos and surrounding communities.
MULTIPLE OFFER FEEDING FRENZY IS THE NEW NORMAL
Former Republican National Committee Chairman Lee Atwater has been recognized as the person who coined the term, “Perception is reality”. That phrase certainly applies to our current housing market! Many potential home sellers are convinced they will achieve a higher sales price if they wait until Facebook employees are able to sell their stock after the upcoming IPO. As a result, they are holding off listing their homes for sale. Many buyers believe they will likely have to pay a lot more for homes once Facebook employees are able to cash out. Therefore, those buyers are willing to do “whatever it takes” to prevail in the multiple-offer-feeding-frenzy that is now happening up and down the Peninsula.
We have seen these imbalances in supply and demand before, (’97-’00, ’05 -’07) but not at this intensity. The number of all-cash, non-contingent, quick close offers is truly amazing – and extremely daunting for buyers competing with those offers!
THE RECOVERY CONTINUES
Atherton and the “hills” markets – Woodside, Portola Valley, Los Altos Hills, Saratoga, and Los Gatos – saw great improvement in the average percentage of list price received by sellers in the first quarter. This movement indicates that values are rising. And note the average percentage received in Palo Alto! The median sale price in Palo Alto and Los Altos is now above the previous high of ‘07/’08.
High tech businesses from Cupertino to San Francisco continue to boom. Inventories of homes for sale are significantly lower than last year. The buyer to seller ratio is definitely favoring the seller, particularly in neighborhoods with good schools.
The percentage of list price sellers received for their homes rose again in the 4th quarter. The average selling price in Palo Alto was 3.4% over the asking price! Sales volume was down, particularly in Palo Alto, where folks are currently more likely to buy than to sell. This is also holding down the median sales price figures. For example, there were 50% fewer homes priced over $1.5m put on the market in Palo Alto during the 4th quarter in 2011 than there were in 2010.
The economic recovery on the San Francisco Peninsula & Silicon Valley is continuing.
A strengthening jobs market and record low interest rates have continued to support buyer demand. Meanwhile fewer homes were put up for sale during the 3rd quarter compared to a year ago.
Total new listings (in all areas listed) were down by 17% on average from a year ago while sales in the third quarter were down just slightly. The total inventory of homes for sale at the end of the quarter was down by 25% from a year ago. We believe the number of sales would have been significantly higher if buyers had a greater number of homes to choose from.