Palo Alto real estate

Palo Alto Market Conditions August 2014

  • Very hot market
  • Pending sales rise sharply
  • Lower end drives increase in sales and decrease in inventory
  • About two weeks of inventory at the end of August

The Palo Alto real estate market shows no signs of slowing down. Pending sales were up 74% from July and 8% from a year ago. Inventory fell 45%, which may put a damper on things going forward. All price indicators increased or remained very strong.

The median sales price in August was $2,400,000, down $38,000 or 1.6% from July’s $2,438,000. It wa, however, 33% ($599,000) higher than August 2013’s $1,801,000. August’s average price per square foot increased $28 from July ($1,376 versus $1,348, respectively). The ratio of the average sales price to the list price slipped almost 2%, from 114.2% in July to 112.3% in August. The ratio was 112.1% a year ago.

Palo Alto-Market Conditions-AUG-01
After falling sharply in July, closed sales increased by four units (14%) in August, from 29 in July to 33. August’s sales were still 25% or 11 homes below the level of a year earlier when 44 sales closed.

Palo Alto-Market Conditions-AUG-02
40 sales went to contract in August, 17 sales or 74% more than July’s 23. That was also three more sales than a year ago. Inventory fell 18 units or 45% to end August with 22, the same number that were on the market a year ago. Those changes cut inventory relative to pending sales from 1.7 months at the end of July to about two weeks at the end of August.

Palo Alto-Market Conditions-AUG-03
The upward trend of homes staying on the market longer accelerated in August. Homes were available for an average of 26 days in August, compared to 17 days in July. That was also more than August 2013’s 18 days. The current month’s time on the market was the longest since January 2013’s 47 days.

Palo Alto-Market Conditions-AUG-04
Analysis by Price Range

Homes priced under $2 million led most of the changes in the market in August. Inventory fell from 10 homes at the end of July to only three at the end of August. 21 sales went pending during August, nearly triple the eight that went pending in July. 53% of Palo Alto’s pending sales during August were in this priced below $2 million but only 13% of its inventory. Inventory relative to pending sales fell from 1.3 months at the end of July to only 0.14 months at the end of August.

Palo Alto-Market Conditions-AUG-05
Five homes priced from $2 million to $2,999,999 were actively listed at the end of August, half the number at the end of July and the same number as a year ago. Eight sales went to contract in August, two less than in July but two more than a year ago. Inventory relative to pending sales fell from 1.0 month at the end of August to 0.6 months at the end of July. This price range accounted for 23% of Palo Alto’s inventory and 20% of its pending sales.

Palo Alto-Market Conditions-AUG-06
The inventory of homes priced from $3 million to $4,999,999 was more than cut in half, while pending sales more than doubled. That cut inventory relative to pending sales from 3.3 months at the end of July to about two weeks at the end of August. Five properties were actively listed at the end of August, down from 13 at the end of July. Nine sales went to contract in August, up from four in July. This segment accounted for 23% of both inventory and pending sales.

Palo Alto-Market Conditions-AUG-07
Five homes were actively listed in the $5 million to $6,999,999 price range at the end of August, two more than at the end of July. One sale went pending during August, the same as in July. This price range made up 23% of Palo Alto’s inventory but only 3% of its pending sales.

Palo Alto-Market Conditions-AUG-08
18% of Palo Alto’s inventory but only 3% of its pending sales were priced at $7 million and up. Four homes were on the market in this segment at the end of August, unchanged from July. One sale went to contract in August, compared to none in July.

Palo Alto-Market Conditions-AUG-09