Palo Alto real estate

Palo Alto Market Conditions September 2015

  • Sales fall
  • Inventory increases
  • Median sales price way up (due to mix)
  • Less frantic fall pace

The typical autumn slow down began to happen in Palo Alto in September. While demand remained quite strong, the pace was less frantic, with both buyers and sellers being a bit more deliberate. Multiple offers are less common but they do exist if a property is priced at the lower end of its price band. Inventory is still a constraint, even though it did increase a little in September. Pending and close sales fell in September but prices did not. An interesting phenomenon is happening, with buyers revisiting homes they had previously decided to not consider. Perhaps they are thinking that these properties may be their best option, given the tight market.

September’s median sales price set a new record at $3,337,500, a 28% increase ($737,500) from August’s $2.6 million. Current homeowners should not go out and spend all their “new found” money just yet. The sharp increase was due to two factors. First of all, sales were low, which can lead to statistical anomalies. Secondly, the mix of sales was skewed toward the high end. The price per square foot also increased but not by as much, from $1,561 in August to $1,628 in September (a 4% rise). September’s price per square foot was 16% higher than a year earlier. The sales price to list price ratio was 111% in September, down from August’s abnormally high 116%. One year ago, this ratio was 112%.

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Closed sales fell sharply in September, from 33 in August to 18 in September. That was the fewest sales since February. 29 sales closed in September 2014.

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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 some caution with the following data.

Inventory increased by four units in September (probably more once data is finalized). 54 properties were actively listed at the end of September, up from 50 at the end of August. 70 homes were on the market a year ago. Pending sales continued the decline they have been on since April. 31 sales went to contract in September, down from 31 in August. That decline will probably be greater when the data is updated. 27 sales went pending in September 2014. A 1.7 month supply was available at the end of September, up from a 1.5 month at the end of August.

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In September, the average length homes were on the market was 22 days, double August’s 11 days but about the same as September 2014’s 23 days.

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Analysis by Price Range

16 properties priced below $2 million were actively listed at the end of September, six more than at the end of August. Pending sales fell by one unit to eight during September. This segment made up 30% of Palo Alto’s inventory and 26% of its pending sales. A 2.0 month supply was on the market at the end of September, up from 1.1 months at the end of August.

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There was not much change in the $2 million to $2,999,999 price range. Inventory fell by one unit to end September with 19. Pending sales fell by two to 16 in September. That left a 1.2 month supply at the end of September, little changed from August’s 1.1 month. 36% of inventory and 52% of pending sales were in this category.

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The inventory of homes in the $3 million to $4,999,999 segment was unchanged at 12 homes, 22% of the total. Pending sales increased from five in August to seven in September, 23% of all pending sales. That resulted in a 1.7 month supply at the end of September, down from 2.4 months at the end of August.

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Seven homes priced at or above $5 million were available at the end of September, one less than at the end of September. Those seven homes were 13% of Palo Alto’s September inventory. No sales went to contract in this segment in September, compared to one in August.

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