Palo Market Update January 2014
Record low inventory levels in Palo Alto have been driving the number of sales downward the past several months. While the median sales price has been falling, that is due to the fact that fewer high-end homes have been sold. The average price per square foot has been rising steadily, as has the ration of the sales price to the list price. Some highlights of the recent single family residential market include:
– Inventory lower than at any time in past 10 years
– Closed sales & pending sales are down
– Median sales price falling the past 3 months and is below the level of a year ago
– Price per square foot has been trending up
The number of homes actively listed more than doubled in January to thirteen. Of course, when you only have six homes on the market at the end of December, it doesn’t take much to double it. 22 properties were available at this time last year. The low inventory has held sales down recently to 12 and 14 in December and January, respectively. Those are the lowest totals since January 2013. There were only 11 closed sales during January, the fewest in at least five years. By comparison, there were 21 in December and 15 a year ago. The following chart shows the relationship between inventory and the number of sales that went pending during a month.
The median sales price has fallen for the past three months, from a 2013 high of $2,300,000 in October to $1,996,000 in January. January was also lower than a year ago, when the median sales price was $2,203,500. The drop in the median sales price is a result of a change in the mix of homes sold. As can be seen in the section below on price segment analysis, more homes priced under $2 million have been sold recently. The general trend over the past year has still been upward.
Although the median sales price has fallen, other indicators of price have been more favorable. IN January, sales closed for 110% of their list price, up from 108% in December and 101% a year ago. ON average, homes sold for 112% of their list price in 2013 compared to 107% in 2012. The average price per square foot has also been rising. This figure was $1,176 for January’s closed sales. That is $277 (30%) higher than a year ago.
As a general rule, houses do not stay on the market long here; only 14 days on average in January. That is down form 31 days in December and 18 days a year ago.
Price Range Analysis
Homes priced under $2 million accounted for 71% of the sales that went pending in January, compared to 50% in December and 60% a year ago. 31% of Palo Alto’s inventory was in this segment at the end of January. Look for sales to be somewhat weak given the extremely low inventory levels.
31% of Palo Alto’s inventory at the end of January and 14% of sales that went pending during the month were priced from $2 million to $2.99 million. 33% of pending sales were in this price range in December and 40% a year ago.
Two homes priced over $3 million were sold (closed) in January. That was 14% of the total. 38% of Palo Alto’s inventory was in this segment.