- Prices rise
- Price per square foot sets new record
- Inventory increases but is still a constraint
- Pending sales continue decline
Fall is in the air and as is typical, the Los Altos real estate market has slowed a little. That is not to say it is slow or demand is weak. Demand remains very strong, as evidenced by the fact that all price indicators were up in September. The pace, however, has been less frantic. Inventory, which had been on the decline since February, actually increased in September, but it continues to be a constraint on sales.
Some buyers are revisiting homes they had previously moved away from, perhaps realizing they are the best available properties. Multiple offers are less common but still exist, particularly for homes priced at the lower end of their price band. We are seeing more homes than before sit on the market for longer periods.
September’s median sales price was $2,880,000, $80,000 or 3% higher than August’s $2.8 million. September was also more than a half a million (23%) higher than September 2014’s $2,351,000. The price per square foot was $1,365, a new record here. August’s price per square foot was $1,141, while a year earlier, it was $1,017. The average sales price again topped 110% of the list price in September at 110.5%, up from 107% in August and 107.5% a year ago.
Closed sales declined for the fourth consecutive month, from 28 in August to 24 in September. 19 sales closed in September 2014.
Note that in each of the past several months, pending sales and inventory numbers have been restated (pending sales downward and inventory upward) the following month, so we need to take caution with the following data.
Even with inventory numbers for September likely being higher than the data reflects, there were still home homes available for sale here than in August. Inventory has been on a steady decline since April, so any increase is welcome. 40 homes were actively listed at the end of September, up from 37 at the end of August and on par with the 41 homes listed a year ago. Pending sales, which currently show an increase of four units from August, will more likely be flat to down once final numbers are available. In any case, inventory relative to pending sales was little changed at about 1.3 months.
September’s closed sales were on the market an average of 22 days, one more day than were August’s sales. The average for the past twelve months was 16 days, so it is taking a little longer to sell some properties.
Analysis by Price Range
Homes priced under $2 million accounted for only 15% of Palo Alto’s inventory at the end of September, with six properties actively listed. That was one more than at the end of August. Four sales went pending in this segment in September (12.5% of the total), unchanged from August. A 1.5 month supply was on the market at the end of September, up from 1.25 months at the end of August.
Homes priced from $2 million to $2,999,999 make up the bulk of the market here, accounting for 55% of inventory and 53% of pending sales. Inventory increased from 19 homes at the end of August to 22 at the end of September. 17 sales went to contract in September, three less than in August. That increased the supply from less than one month at the end of August to 1.3 months at the end of September.
12 properties priced at $3 million or more were available for sale at the end of September, one less than at the end of August. 11 sales went to contract, up from four in August. I do think pending sales will be lower and inventory higher in this segment once the data is finalized.