Palo Alto Market Conditions November 2014

• Pending and closed sales drop by half
• Lowest inventory since December
• Prices flat

Sales dropped sharply across all market segments during November but the low end took the biggest hit. Inventory was also down across the board. Prices were mostly flat to October but remain very strong, with homes selling, on average, for more than 110% of list.

The median sales price in November was $2.5 million, just $10,000 below October’s price. November was $300,000 or 14% higher than November 2013’s $2.2 million median price. The average price per square foot also fell slightly in November, from $1,401 in October to $1,384, a loss of $17 or 1.2%. November was still 21% or $236 higher than the $1,148 average price per square foot posted a year earlier. The average closed sale in November was for 112% of the list, compared to 113% in October and 111% a year ago.

After spiking in October, closed sales continued the decline they had been on for several months prior to that. 23 sales closed in November, compared to 43 in October and 44 in November 2013.

November’s 18 pending sales was the second lowest of the year (January had 13), and was less than half of October’s 38. It was also 13 less than went to contact in November 2013. Inventory fell 45%, from 29 at the end of October to 16 at the end of November. Only January’s 13 actively listed properties were lower. November still had triple the inventory of a year ago. Inventory relative to pending sales increase slightly, from 0.8 months at the end of October to 0.9 months at the end of November.

The number of days on the market continued to increase in November, a trend that began in August. 23 sales closed in October and 22 closed a year ago.

Analysis by Price Range

The sub-$2 million market segment saw pending sales cut from 17 in October to eight in November, compared to 15 a year ago. Inventory fell by two units, from six at the end of October to four at the end of November. Only one property was actively listed in this segment a year ago. About two weeks of inventory was available at the end of November, up from about 10 days at the end of October. 44% of Palo Alto’s pending sales and 25% of its inventory were priced below $2 million.

Pending sales of homes in the $2 million to $2,999,999 price range fell by a third, from 12 in October to eight in November. Inventory was cut from seven at the end of October to three at the end of November, leaving less than a two week supply. This price range accounted for 44% of the sales that went to contract in Palo Alto in November and 18% of the inventory at the end of the month.

Only two sales went to contract in November in the $3 million to $4,999,999 price range, compared to eight in October. There were also two in November 2013. Inventory fell by three units, from eight at the end of October to five at the end of November. November had three more homes available than did November 2013. Inventory relative to sales increased from 1.3 months at the end of October to 2.5 months at the end of November. This segment made up 31% of inventory and 11% of pending sales.

The inventory of homes priced from $5 million to $6,999,999 fell from five at the end of October to two at the end of November, accounting for 12.5% of Palo Alto’s total. No properties were actively listed in this segment a year ago. No sales went pending during November, compared to three in October and two a year earlier.

No sales went to contract in the $7 million-plus market segment in November, the same as the prior two months, as well as November 2013. Two homes were actively listed at the end of November, down from three in October but one more than a year ago. 12.5% of Palo Alto’s inventory was in this segment.