- Market softens
- Sales fall
- Inventory down
- Prices down
Last month, I indicated that the Palo Alto real estate market did not succumb to the usual autumn slow down. Well, that was not the case in November. The market softened considerably, as evidenced by the fact that just about every market statistic weakened. Sales and inventory fell, every price indicator declined and homes were on the market longer. Now that’s not to say the market is weak; just not as robust as it was a month ago. Homes still sold for more than their list price (on average) but not by much. Homes prices will most likely continue to increase here but perhaps not as rapidly as we have seen over the past couple of years. It is still a seller’s market, with strong (if somewhat uneven) demand and low inventory.
The average sale in November closed for 102% of the list price, the lowest ratio in nearly two years. The ratio was 115% in October and 113% a year ago. The median sales price in November was $2.5 million, $250,000 lower than October’s $2,752,000 and the same as November 2014’s. Ona per square foot basis, the average sale was for $1,451, down $142 from October’s $1,593 but still $67 higher than in November 2014.
Eighteen sales closed in November, half the number of sales in October. It was the fewest closed sales since February. 23 sales closed a year earlier.
22 sales went to contract in November, down from 37 in October. Pending sales, like closed sales, were at their lowest point since February. There were 23 pending sales in November 2014. 50 homes were available for sale at the end of November, seven less than at the end of October but 12 more than a year ago. Inventory relative to pending sales increased to 2.3 months at the end of November from 1.5 months at the end of October.
November’s close sales were on the market for an average of 35 days, the longest since January. October’s sales were listed for 14 days and in November 2014 it was 26 days.
Analysis by Price Range
Homes priced under $2 million saw inventory drop by one home to end November with 15. Pending sales fell by two, from nine in October to seven in November. A 2.1 month supply was on the market at the end of November, up from 1.8 months at the end of October. 30% of Palo Alto’s inventory and 32% of pending sales were priced under $2 million.
Homes priced from $2 million to $2,999,999 accounted for 28% of inventory and 41% of pending sales. 14 of these homes were available for sale at the end of November, four less than at the end of October. Pending sales were cut in half, from 18 in October to nine in November. That increased the supply from 1.0 month at the end of October to 1.6 months at the end of November.
Five sales of homes priced from $3 million to $4,999,999 went to contract in November, half as many as in October. Those five sales were 23% of the city’s total. Inventory only fell by one unit to end November with 14, 26% of the total. There was a 2.6 month supply at the end of November, up from 1.5 months at the end of October.
One sale of a home priced at or over $ 5million went to contract in November, up from zero the past two months. Eight of these homes were on the market at the end of November, one less than at the end of October. 16% of inventory and 5% of pending sales were homes priced at or above $5 million.