The trend toward normalization and away from the unbalanced sellers’ market of the past few years continued in July. It is still not uncommon for some properties to receive multiple offers. However, only well-priced high quality homes are getting that kind of activity. In addition, while those properties may have received six or more offers in the very near past, they are now getting perhaps two to four. While the upper end of the market (over $5 million) has the bulk of inventory, it is the lower end (homes priced under $3.5 million that are attracting the most attention and selling the quickest.
This more balanced market is seeing buyers that are more cautious and deliberate. They are out there and active but don’t mind waiting longer than was the case just this past spring. Homes are taking longer to sell and some buyers, particularly at the upper end are forced to cut prices in order to sell.
Median Sales Price
For the second straight month, homes sold for an average of 96% of their list price in July, compared to an average of 102% for the past 18 months. The median sales price fell for the fourth straight month, from $3.26 million in June to $2.93 million in July, a 10% drop. July’s median price was also 11% lower than a year ago. Much of the decline in the median sales price can be attributed to the fact that more lower-priced homes are selling in the current environment, rather than an actual drop in prices. The price per square foot fell by $143, from $1,173 in June to $1,030 in July. July was still $194 per square foot higher than July 2015.
Only six sales closed in July, less than half June’s 15. By comparison, only three sales closed in July 2015.
For Sale vs. Pending
The inventory of homes for sale remained unchanged from June, while pending sales were cut by more than half. Seven sales went to contract during July, down from 15 in June but four more than a year ago. The drop in sales increased the supply relative to pending sales from 2.6 months at the end of June to 5.6 months at the end of July.
Days to Sell
Homes were listed for an average of 42 days in July, up from 33 in June. Homes are taking longer to sell this year. For the first seven months of this year, the average time on the market was 59 days, compared to 48 days for the same time period last year.
Analysis by Price Range
Under $3.5 million
While only 10% of Los Alto Hills’ inventory was priced under $3.5 million at the end of July, 71% of pending sales during the month were in this segment. Four homes were actively listed at the end of July, down from nine at the end of June. Five sales went pending during July, one less than in June. Supply was cut in half, from 1.5 months at the end of June to 0.8 months at the end of July.
$3.5 million to $4.9 million
The $3.5 million to $4,999,999 price range had 14 homes actively listed at the end of July but only one sale went to contract during the month. Inventory fell by one, while pending sales dropped three units from June. As a result, supply jumped from three months at the end of June to 13 at the end of July. This price range accounted for a third of inventory and 14% of sales.
$5 million or over
56% of Los Alto Hills’ inventory was priced at or above $5 million, while only 14% of pending sales were in this segment. 22 homes were actively listed at the end of July, four more than at the end of June. Pending sales fell form five in June to only one in July.
Check out these other Real Estate Market Conditions Reports for July 2016: