- Inventory continues to decline
- Sales very low
- Price down
- Holiday lull
The real estate market in Los Alto Hills was fairly quiet in December, more so than would be expected for this typically slow month. A number of factors combined to cause the low activity level, including the holiday season, the Federal Reserve raising interest rates, uncertainty about the global economy and the looming election. As a result, many buyers and sellers stayed on the sidelines, causing drops in both inventory and sales. There is also what appears to be a longer term trend toward a less frantic pace than we have seen over the past few years. That is not to say the market is or will be weak, just that the pace of activity and rising prices is likely to slow to a more normal rate.
For December, the median sales price was $3,875,000, which was 14% or $480,000 higher than November’s $3,405,000 but 23% or $1.2 million lower than December 2014’s $5,060,063. However, with only four closed sales in December and six in November, we cannot read much into the short term price swings. Low volumes lead to higher volatility in the short term. The price per square foot fell $205 (16%), from $1,253 in November to $1,408 in December. That was also 13% lower than a year ago. The average sales price to list price ratio was 99% in December, down from 107% in November but the same as in December 2014.
Four closed sales in December is the second fewest of the year, with only June having fewer (three). Six sales closed in November and seven in December 2014.
Inventory declined sharply for the second straight month and is now slightly more than half the level of just two months ago. 30 properties were actively listed at the end of December, a 33% drop from 45 in November. However, there was still more homes for sale than there were a year ago, when only 22 homes were for sale. Four sales went pending in December, down from six in November and six in December 2014. Relative to pending sales, a 7.5 month supply was available at the end of December, unchanged from November but twice December 2014’s supply.
December’s closed sales were on the market an average of 27 days, compared to 12 days in November and 41 a year ago.
Analysis by Price Range
Half of Los Altos Hills’ pending sales and 13% of its inventory were homes priced below $3.5 million. Two sales went pending in this segment in December, down from five in November. Four homes were for sale at the end of December, two less than at the end of November. That meant a two month supply was available.
Fourteen properties were actively listed in the $3.5 million to $4,999,999 price range or 47% of the city’s total. Six fewer homes were for sale at the end of December than at the end of November. One sale went to contract in December, the same as in November. A 14 month supply of these homes was on the market at the end of December.
With twelve homes for sale at the end of December and only one sale going pending during the month, there was a 12 month supply of homes priced at or above $5 million. Inventory fell from 19 at the end of November to December’s 12, which was 40% of Los Alto Hills’ total. The one pending sale was one more than in November and was 25% of all sales here.