- Inventory at record low
- Sales typical for December
- Prices down
- A return to normalcy?
The past couple of years have been a whirlwind for real estate in Los Altos, with aggressive buyers, too few sellers and rapidly rising prices. The market has slowed demonstrably the last two months to what feels like a more normal pace. The exception to this new normal is the fact that inventory was at a record low level in December. Many factors contributed to this new slower pace; waiting for the holidays to end, the Federal Reserve raising interest rates, uncertainty about the global economy and the election cycle. Expect a healthy market as we progress through 2016, just not as hyperactive as we have become accustomed to.
The median sales price in December was $2,610,000, just $4,000 less than in November. December’s median was 5.5% or $135,000 higher than a year ago. The average sale in December was for 102.6% of the list price. That was the first time since October 2013 this ratio was below 103%. It was 106% in November, as well as in December 2014. The price per square foot also fell, from $1,204 in November to $1,059 in December, a 12% decline. It was also the second straight month that the price per square foot was lower than it was a year earlier December 2015 was $77 or 7% lower than December 2014).
19 sales closed in December, the fewest since February. December had three fewer sales than did November but one more than December 2015.
With only ten homes actively listed at the end of December, inventory was lower than any month in at least six years. 25 homes were on the market at the end of November and 22 a year ago. Pending sales were cut from 22 in November to 14 in December, compared to 18 in December 2014. That cut supply relative to pending sales to 0.7 months at the end of December from 1.1 months at the end of December and 1.2 months a year ago.
Homes were on the market for an average of 24 days in December, up from 15 in November. December matched the time on the market of December 2014.
Analysis by Price Range
Since topping out with 13 in June, the inventory of homes priced under $2 million has been steadily falling. December ended with only two of these homes actively listed, compared to four in November. Pending sales have been declining with inventory and sales matched their low of the year with only three in December. Supply was cut form 0.8 months at the end of November to 0.7 months at the end of December. 20% of Los Altos’ inventory and 21% of its sales were priced under $2 million.
December’s inventory of only four properties in the $2 million to $2,999,999 price range was the lowest since December 2014’s three and was a big drop from 11 in November. Pending sales fell from 12 in November to seven in December. The result was a cut in the relative supply from nearly a month at the end of November to 0.6 months at the end of December. This was the largest price range in December, with 49% of inventory and 50% of pending sales.
Only four sales of $3 million-plus homes went pending in December, down from five in November. Only four homes were available for sale in this market segment at the end of December, compared to 10 at the end of November. That left a one month supply at the end of December, half the two month supply at the end of November. This segment accounted for 40% of inventory and 29% of sales.