- Inventory more than doubled
- Low inventory drives sales down sharply again
- Fewest closed sales in over ten years
- Prices rise – median price highest ever
It was very nice to see the inventory in Palo Alto more than double in January, we certainly need it. In fact, month-end January’s 2.1 month supply was the most in over two years. That being said, the extremely low level of available homes the past several months continued to drag down sales and increase prices. January’s median sales price was the highest on record here – at least in the past ten years and I doubt it was higher before that.
The median sales price in January was $2,847,500, which was $597,500 or 27% higher than December’s $2,250,000 and more than $850,000 (43%) higher than a year ago. The usual caution here about reading too much into these numbers given the extremely low level of closed sales applies. Many of the statistics we track here can get very volatile with low transaction numbers.
The price per square foot increased $234 (18%) from $1,288 in December to $1,522 in January. January was also nearly 30% higher than January 2014’s $1,176. There was not much change in the sales price to list price ratio, which remained at about 110%.
Only eight sales closed in January, the fewest sales here in over ten years. I did not look back further than 2006. 18 sales closed in December and 11 a year earlier.
Inventory jumped by 12 units in January, ending with 21, compared to nine at the end of December. January also had more available homes than a year ago, when 13 homes were on the market. Pending sales, still restricted by low inventory in prior months, remained unchanged at 10 during January. The result was an increase in inventory relative to pending sales from 0.9 months at the end of December to 2.1 months at the end of January. That is the highest relative inventory level since January 2013.
January’s sales were listed longer than were previous months’; 46 days compared to 15 in December and 30 a year ago.
Analysis by Price Range
Seven properties priced under $2 million were available at the end of January, up from four at the end of December. Pending sales increased by one to five during January. 50% of Palo Alto’s pending sales and 33% of its inventory was in this segment. Inventory increased from a 1.0 month supply at the end of December to 1.4 months at the end of January.
The $2 million to $2,999,999 price range added three homes to inventory to end January with four, accounting for 19% of the city’s total. Only one sale went to contract in January (10% of the total), down from two in December. A four month supply was on the market at the end of January, compared to about two weeks at the end of December.
Homes priced from $3 million to $4,999,999 saw inventory more than triple, from two homes at the end of December to seven at the end of January. That was a third of Palo Alto’s total inventory. Four sales went pending in January, one more than in December. The result was that January ended with a 1.75 month supply, up from 0.7 months at the end of December.
For the third straight month, no sales of homes priced from $5 million to $6,999,999 went to contract in December. One home was actively listed at the end of January, unchanged from December. That one property was 5% of Palo Alto’s inventory.
Two properties priced at or above $7 million were actively listed at the end of January and no sales went to contract during the month. December had one property on the market at the end of the month and one pending sale during it.