- Sales rebound from record low
- Inventory increases but still very low
- All price indicators rise
- Homes priced right not on the market very long
- $2 million to $3 million homes is where the action is
While not quite a return to “normal,” the real estate market in Los Altos in February was certainly an improvement from January. Pending and closed sales nearly doubled from their record lows in January and inventory increased as well. Inventory and sales remained very low, however. Despite the low level of sales, demand remained strong. The proof was the fact that all price indicators rose in February and homes that did sell were on the market for only nine days, on average. Pricing remains critical in this market and homes that are priced appropriately and in good locations do not stay on the market long.
The median sales price in February was $2.8 million, up $300,000 from February and about $100,000 from a year ago. February was the first month since October that the median sales price increased from the prior month. On the other hand, the median sales price has increased year-over-year every month for over two years. The price per square foot increased $91 from January’s $1,243 to $1,334. That was the second highest square foot price recorded here, bested only by March 2015’s $1,343. The average sale was for 111% of the list price in February, about the same as in January and a little higher than February 2015’s 109%.
Eleven sales closed in February. While that was more than double January’s five, it was the fewest in two years (if we ignore January). 18 sales closed in February 2015.
Pending sales also doubled in February, from six in January to 12. As with closed sales, that was the fewest pending sales in two years (ignoring January). 18 sales went to contract a year ago. The same dynamic happened with inventory. While it rose in February, it was still lower than every other month in the past two years. 19 properties were actively listed at the end of February, up from 11 at the end of January but about half the 35 that were available a year ago. A 1.5 month supply, relative to pending sales, was on the market at the end of February, down from 1.8 months at the end of January and 1.9 months a year ago.
February’s sales were on the market for fewer days than for any month in at least 14 years. The average time homes were on the market was nine days, less than half of January’s 17 days. One year ago, homes were available for an average of 26 days.
Analysis by Price Range
Three homes priced under $2 million were actively listed at the end of February, two more than at the end of January. One sale went to contract during the month, the same as in January. 16% of Los Altos’ inventory and 8% of pending sales were in this segment. Inventory relative to sales fell from 1.8 months at the end of January to 1.6 months at the end of February.
February saw inventory in the $2 million to $2,999,999 price range reach double digits for the first time in three months. Ten homes were available at the end of February, compared to six at the end of January and 14 a year ago. Pending sales doubled, from a very low four in January to eight in February. A three month supply of these homes was on the market at the end of February, up from one month at the end of January. This price range is where most of the action is, accounting for 53% of inventory and 67% of pending sales.
Six properties priced at $3 million or more were available for sale at the end of February, two more than at the end of February. Three sales went to contract in February, two more than in January. That cut supply relative to sales from four months at the end of January to two months at the end of January. 32% of inventory and 25% of sales were homes priced at or above $3 million.