- Inventory lowest of the year
- Low inventory drives sales down sharply again
- Priced indicators slip
Inventory continued to fall in Palo Alto in December and the lack of available homes drove sales down to their lowest level in two years. Demand remains very strong, as evidenced by the fact that the average sale in December was for about 110% of the list price.
December’s median sales price was virtually unchanged from November, losing only $10,000 to $2,500,000. That was still 14% higher ($300,000) than December 2013’s $2,175,000. Other price indicators fell a bit more. The average price per square foot lost $96 (7%), from $1,384 in November to $1,288 in December. December’s price per square foot was, however, 11% higher than December 2013’s $1,159. The average sales price to list price ratio fell below 110% for the first time in 2014, but only slightly. December’s ratio was 109.7%, versus 112.4% in November and 108.6% a year earlier.
Closed sales were lower in December than any month in 2014. 18 sales closed during the month, compared to 23 in November and 21 a year ago. December’s sales were 60% below the level of just two months ago, when 43 closed in October.
With only nine properties on the market at the end of December, pickings remain slim for buyers. December’s inventory was the lowest of the year but was still three more than was available a year ago. 10 sales went to contract during December, the fewest in two years, since there were 10 in January 2013. December’s sales were eight fewer than in November and two less than a year ago. Inventory relative to pending sales was little changed at about 0.9 months.
Properties were listed for an average of 15 days in December, down from 26 days in November and 16 days a year ago.
Analysis by Price Range
Pending sales of homes priced under $2 million was cut in half for the second consecutive month, with four in December. That was two more than a year ago and the lowest level in years. Inventory was unchanged from November at four, which was one more than a year earlier. The sharp drop in sales increased inventory relative to sales from about two weeks at the end of November to a month at the end of December. 44% of Palo Alto’s inventory at the end of December and 40% of pending sales during the month were priced below $2 million.
Only one property was actively listed for $2 million to $2,999,999 at the end of December, down from three at the end of November but one more than a year ago. Pending sales have been cut dramatically, from 12 in October to eight in November to two in December. Four sales went pending a year ago. A two week supply was on the market at the end of December, up from about 12 days at the end of November. This price range accounted for 44% of Palo Alto’s inventory and 20% of pending sales.
The inventory of homes priced from $3 million to $4,999,999 has dropped from eight at the end of October to only two at the end of December, the same number as a year ago. This price range was one of two that increased pending sales during December, if by only one unit, from two in November to three. As a result, inventory relative to pending sales was cut from 2.5 months at the end of November to 0.7 months at the end of December. 22% of Palo Alto’s inventory and 30% of pending sales were in this price range.
For the second straight month, no sales of homes priced from $5 million to $6,999,999 went to contract in December. One home was actively listed at the end of December, down from two at the end of November. That was 11% of Paolo Alto’s total inventory at the end of December.
For the first time in four months a sale went to contract for more than $7 million in December, accounting for 10% of Palo Alto’s sales. Only one property was actively listed in this segment at the end of December, 11% of the total.