Whether you are a first time buyer or seller, or have been through multiple transactions, you might be surprised by how quickly the real estate market changes in Los Altos, Palo Alto and surrounding communities. You need hard-hitting historical data, current market analysis, and insider experience to stay informed and succeed in these real estate markets.
As a service to their clients, Jeff Stricker and Steve TenBroeck of Alain Pinel Realtors provide regular market analysis and commentary. You are invited to read the entries below, add your comments, ask questions or contact them directly.
More Homes on the Market; But Less Desirable Locations & Conditions
November 2011 home sales stats were recently published and while inventory of homes for sale was higher than last year in some areas, the “quality” of the inventory was poor. Many homes were not priced in accordance with their location or condition. This caused sales to be fewer than they would have been if those homes had been priced more accurately. Multiple offers, however, are still the standard for most accurately priced homes in this area.
Demand across all price ranges remains very strong following the strong performance of local technology companies. As a result, we expect home prices to continue to appreciate (subject to the non-collapse of the Euro). Interest rates remain at historically low levels which is also increasing demand.
Please find charts of market activity and median sales price for single family home sales in November for the last decade in Palo Alto, Los Altos, Los Altos Hills and Menlo Park. This historical trending, which we compile monthly, gives you the best perspective when evaluating market conditions. If you have any questions about the charts below or wish to get data and analysis about another town in the area, please contact us. We invite you to add your comments at the bottom of the post.
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.Share
The Peninsula real estate market continues to be hot!
Inventories of homes for sale are significantly lower than last year. Competition for the best properties in all price ranges remained strong with over-bidding particularly common in Palo Alto (note the average percentage of list price received was over 100% again in September).Share
The local real estate market continues to be hot!
Inventories of homes for sale continued to decline in August while competition for the best properties in all price ranges increased fiercely. Over-bidding, all-cash offers, as-is terms, no contingencies — these were all commonplace terms in many of the sales transactions over the past several months.
Local consumer confidence is finally beginning to waver, based on the non-stop negative economic news both nationally and internationally. This has begun to adversely affect demand for homes that have “issues,” but for most homes it remains a “Seller’s Market.”
Palo Alto, Los Altos, Los Altos Hills and Menlo Park
July statistics are going to require more explanation and interpretation than usual. The decline in sales volume in our area is a result of a shortage of inventory, especially in the mid- and upper-range of the market. It is certainly not due to lack of demand.
Another statistic that can be easily misinterpreted is Days On Market (DOM). As the market heats up – as it is now – and inventory declines, homes that have been sitting begin to sell, increasing the average days on market. It is definitely not taking longer for the typical home to sell in the current market.
Lastly, the median sales price decline is a result of the shortage of inventory of homes to sell in addition to the increasing number of “quiet sales”. “Quiet sales” refers to homes being sold through local agent networks and not listed or recorded on the Multiple Listing Service, usually higher priced properties. These two factors are causing the reported median sales price to decline. Homes in our area are most certainly not declining in value at this time.