- Sales tank – record low closed sales
- Inventory at historic low
- Median sales price declines for third straight month
- Other price indicators rise
- Low end is hot
OK, this doesn’t feel very normal, at least not as we have become accustomed to it. With near record low inventory comes near record low sales. Even though it is not a typically busy time of year, buyers are looking to act, concerned that rising interest rates may push them into a lower price band. That is particularly true at the lower end of the market. The demand is there but sellers need to get the pricing right and present their homes well. Buyers have been pickier but still willing to move quickly when they find what they like.
The median sales price reflected the market dynamic in January, with a greater portion of sales priced from $2 million to $2.5 million. That drove the median sales price lower, even though the price per square foot and the sales price to list price ratio increased. And homes that sold did so quickly.
January’s median sales price was $2.5 million, 4% lower than December’s $2.61 million. It was the third straight month that the median sales price fell. It was still 6% higher than January 2015’s $2.35 million. January’s sales averaged $1,243 per square foot, the highest in four months. It was the first time in the past four months that this statistic increased. January’s price per square foot was $1,059 and a year ago it was $1,062. The sales price to list price ratio was 111%, on average in January, the highest ratio since June. December’s ratio was 103% and December 2015’s was 104%.
January’s five sales were the fewest in at least 14 years (I only looked back to the beginning of 2002). January had about a quarter the number of sales in December (19) and a third as many as a year ago (15).
Inventory rose a little in January but it’s hard to get excited about having only 10 properties actively listed at the end of the month. That was four more than we had at the end of December but 17 less than a year ago. Eight sales went pending in January, less than half of December’s 19. 13 sales went to contract in January 2015. A 1.25 month supply was on the market relative to pending sales at the end of January, up from 0.3 months at the end of December but down from 2.1 months a year earlier.
January’s sales were on the market an average of 17 days, eight less than in December but six more than in January 2016.
Analysis by Price Range
There is not much activity in the sub-$2 million segment because there just hasn’t been any inventory. Two properties were available in this category at the end of January, which was one more than at the end of December. Only one sale went to contract in January, which was two less than in December. That increased supply relative to sales from 0.33 months at the end of December to two months at the end of January. 20% of Los Altos’ inventory and 12.5% of its pending sales were priced below $2 million.
The $2 million to $2,999,999 price range also had extremely low inventory. Month-end December and January had only two and three homes for sale, respectively. The average for 2015 was 17.5 and one year ago there were nine homes actively listed. Six sales went to contract in January, accounting for 75% of all sales here. However, that was still four fewer sales than in December. Inventory relative to sales increased from 0.2 months at the end of December to two weeks at the end of January.
The $3 million-plus segment had the highest inventory and lowest sales in January. Five homes were on the market in this segment at the end of January, half of Los Altos’ total. Only one sale went pending in January, compared to six in December. A dive month supply was available at the end of January.