Low inventory continued to be a constraint on the Silicon Valley real estate market in May. While supply increased 10% during the month, sales jumped 24%. There were also 21% fewer homes (86 units) on the market at the end of May than a year ago. Pricing was mixed, with most communities seeing declines in the median sales price. However, on average, the median sales price in the region increased about 3% during May and was about 9% higher than a year earlier.

Palo Alto and Sunnyvale were the only cities with less inventory at the end of May than April, while Menlo Park led the pack with a 42% increase (10 units). The region had a 1.2 month supply at the end of May, down slightly from 1.4 months at the end of April. Sunnyvale and Los Altos had less than a two week supply, while Los Altos Hills (3.5 months) and Los Gatos/Monte Sereno (2.2 months) had more than a two month supply.

The median sales price in Los Alto Hills shot up $2.2 million from April due to a larger than normal number of higher priced homes being sold. Palo Alto and Sunnyvale posted smaller gains, with other cities having declining median sales prices.

The average sale in May was for about 107% of the list price, down slightly from April. Mountain View and Sunnyvale led the way with a 114% ratio. Los Alto Hills was the only city below 100%, at 98%.

Closed sales were up in every city, except Menlo Park (down two units) and Los Alto Hills (flat to April). Saratoga sales jumped 63% and Sunnyvale’s 45%.

Time on the market increased in May, from about 18 days in April to 23 in May. Once again, Mountain View (eight days) and Sunnyvale (11 days) were the strongest markets. Los Altos homes sold in an average of 18 days and all other communities were over 20 days. Homes in Los Altos Hills sold in an average of 47 days, the most in the region.

Inventory in the beach communities of Aptos, Santa Cruz and Capitola was up about 9% from April, paced by Aptos’ 20% (10 units) and Capitola’s 40% (four units). Closed sales actually fell in May, from 63 in April to 53 in May. Sales in Capitola were unchanged from April, while those in the other communities fell. The result of these changes was a 2.8 month supply at the end of May, compared to 2.1 months at the end of April.

The median sales price increased about 7.5% in May, with Santa Cruz prices remaining unchanged while the other towns posted gains. On average, sales in May were for 99.8% of the list price, down from 100.5% in April. Aptos’ ratio was 100.7%, Capitola’s 94% and Santa Cruz’s 99%.