- All price indicators jump
- Sales increase across all market segments
- Inventory on the rise
The Palo Alto real estate market posted very strong results in February. Every indicator of price, including the median sales price, the price per square foot and the sales price to list price ratio all rose significantly in February. Both closed sales and those that went into contract increased strongly as well, with increases in all market price segments.
The median sales price of a single family residential property was $2,500,000 in February, up 25% ($504,000) from January’s $1,996,000. January’s number may have been low due simply to the smaller sample size (fewer closed sales). That being said, other than January, the median sales price has been higher every month than the level from a year earlier for at least two years. The average price per square foot was $1462 in January, which is likely a record high for Palo Alto. The average was $1176 in January and $1151 a year ago. February’s sales closed for 115% of the list price, on average. That ratio was 110% in January and 113% a year earlier.
19 sales closed in February, eight more than in January. Excluding January, February had the fewest closed sales of any month since February 2013 (16). February did reverse the general downward trend in closed sales that has been going on since they peaked at 44 last August.
Inventory and pending sales increased in lock step in February, both increasing from 13 to 22. Inventory has increased for three consecutive months here and appears to have gotten up off the matt (only five listings at the end of December). The number of sales that went pending during the month plunged from 42 in October to 12 in January, before beginning to climb back up. Inventory relative to sales that went pending was virtually unchanged at about one month at the end of February.
The average closed sale in February was on the market an average of 18 days, up from 14 days in January. That was the same length of time on the market as in February 2013.
Analysis by Price Range
Homes priced under $2 million accounted for 32% of Palo Alto’s inventory at the end of February and 57% of the city’s pending sales during the month. Inventory increased from four at the end of January to seven at the end of February. 13 sales went into contract during February, three more than in January. Months of inventory moved up slightly, from 0.4 months at the end of January to 0.5 months at the end of February.
The inventory of homes priced from $2 million to $3 million was unchanged at four. Sales that went into contract, however, more than doubled, from two during January to five during February. That dropped inventory relative to sales that went pending from 2.0 months at the end of January to 0.8 months at the end of February. 18% of Palo Alto’s inventory at the end of February and 22% of the sales that went pending during the month were in this price range.
In the $3 million to $4.99 million segment, inventory increased from four at the end of January to six at the end of February. Three sales went into contract during February, two more than in January. That left 2.0 months of inventory relative to sales that went pending.
After three months with no homes listed between $3 million and $5 million, there were three at the end of February. Likewise with sales that went pending, which went from zero the past tow months to one in February.
Two homes priced at $7 million or more were actively listed at the end of February, up from one the previous three months. We had gone nine months without a sale going into contract in this segment before the one we had in February.