Across the United States, luxury homes are lingering on the market longer than in 2015 thanks to the uncertainty of interest rates and the global economy. High-end homes in Palo Alto and other Silicon Valley cities, tied with high tech as well as being a desirable area for foreign buyers, have resulted in a decrease in the multiple offer scenarios and an uptick in days on market.
The San Jose metropolitan area, which includes the Silicon Valley, is by far the highest priced housing market in the nation. The median single-family home price in this metro area is $970,000 reports the National Association of Realtors. In Palo Alto, the median home price was $2.5 million in the first three months of 2016, according to Zillow. That price point far outweighs San Francisco’s $1.1 million median home price.
Palo Alto is home to many top executives from Google and Facebook. In April, the town’s luxury homes in the $5 million and above range were on the market for a median of 16 days. In April of 2015, 11 days was the norm while in April 2014, median days on market was 10. The 11 active listings in the same price point in May 2016 had been on the market for a median of 30 days.
An example of this seeming slowdown in the luxury real estate market is a 6 bedroom, 5-bath custom home near Stanford University that boasts nearby neighbors the likes of Steve Job’s widow, Laurene Powell Jobs, and Larry Page, Google co-founder. Listed in March, the home is now priced at $7.5 million, this after a $500,000 reduction that would have been unheard of in 2015.
$3 million + luxury homes across California are now on the market 52.5 days versus 40 days a year ago. In the first quarter of 2016, Santa Clara County had 13 homes that sold in the $5 million and above range, a reduction from the 20 homes from the year prior. Other affluent areas such as Los Altos and Atherton are feeling the same effects. Los Altos had 6 active listings in that price range with a median 25.5 days on market as of the middle of May while Atherton’s 25 listings had a median 100 days on market.
Despite the economic uncertainty driving this slowdown among luxury homes, this does bode well for buyers. Those looking to buy a high-end home don’t have to make immediate decisions, diving head first into bidding wars and making offers significantly above asking. They can shop around and find the perfect home that meets their distinctive lifestyle needs.
For those looking to buy in the $2 to $3 million-dollar range, demand remains high and competition in the form of the infamous bidding war continues. Again, driven by high-tech in the form of considerable hiring, these homes are the sweet spot for software engineers and other top talent being snapped up by Silicon Valley companies.
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If you’re in the market to purchase a luxury home in Palo Alto or beyond, The Dawn Thomas Team welcomes the opportunity to assist.