The current market is much more balanced than the seller friendly, hyper active market of the past few years that saw prices escalate quickly. It is still a very healthy market, just not so heavily skewed toward sellers. Buyers are being more cautious and are willing to wait longer. Lower priced homes are still selling quickly but at the other end, properties stay on the market longer and some sellers have had to cut prices. Even though inventory has been falling the past couple of months, it doesn’t feel that way due to a more normalized and balanced market, where sellers do not have all the leverage.
Median Sales Price
With buyers being more discerning, homes are not selling as far above the average list price as has been the case. The ratio of the sales price to the list price was 103% in July, down from 105% in June and 107% a year earlier. The median sales price did not change much from June, dipping just $6,000 to $2,215,000 in July. That was nearly 10% higher than a year ago. The price per square foot fell for the second straight month and flirted with dipping below $1000 but ended up at $1,001 for July. That was $193 lower than in June and $93 less than a year ago.
Closed sales fell from a high for the past 22 months of 39 in June to 23 in July. 37 sales closed in July 2015.
For Sale vs. Pending
Pending sales, which also hit a 22 month high in June, fell back to 25 in July. Part of the decline can be attributed to seasonal factors but there is an element of the fall that is due to buyers not being as aggressive. 55 homes were actively listed at the end of July, down from 60 in June. Supply relative to pending sales increased from 1.5 months at the end of June to 2.2 months at the end of July. One year ago, there was a 1.4 month supply.
Days to Sell
While some homes are staying on the market longer, the fact that July’s sales took an average of only 19 days attests to the strength of the market. June’s sales were listed for an average of 22 days and one year ago, sales took 29 days, on average.
Analysis by Price Range
Under $2 million
Homes priced under $2 million are in strong demand. That can be seen by the fact that 44% of Menlo Park’s inventory is in this segment, while 56% of pending sales are there. 24 homes were on the market at the end of July, three less than at the end of June. Pending sales fell from 26 in June to 14 in July. A 1.7 month supply of these homes was available at the end of July, compared to 1.2 months at the end of June.
$2 million to $2.9 million
12 homes were actively listed at the end of July in the $2 million to $2,999,999 price range, down from 16 at the end of June. Pending sales fell by two, from seven in June to five in July. This price range accounted for 22% of inventory and 20% of pending sales. Supply relative to sales was little changed at 2.4 months.
$3 million or over
The $3 million-plus segment made up 35% of Menlo Park’s inventory at the end of July and 24% of the sales that went to contract during the month. Six sales went pending in this category in July, compared with 11 in June. Inventory increased from 17 at the end of June to 19 at the end of July. The result was a doubling of supply relative to pending sales from 1.55 months at the end of June to 3.2 months at the end of July.
Check out these other Real Estate Market Conditions Reports for July 2016:
- Los Altos
- Los Altos Hills
- Menlo Park
- Mountain View
- Palo Alto
- Redwood City