After hitting an all-time high of $2,330,000 in February of 2013, the median sale price in Palo Alto started to show a downward trend. June’s median price of a single family home stood at $1,901,000. And while the median price is at its lowest level since the beginning of the year, it is 7 percent higher than it was a year ago.
The overall year-to-date median home price in Palo Alto increased by 25 percent compared with the same period last year. The average number of days on market (DOM) in June dropped to 11, the lowest number since May of last year, indicating the continuation of a strong seller’s market and of buyer demand for housing.
The real estate market is still suffering from a lack of supply — in June there was only 1.2 months of inventory available for sale. Three months of inventory is considered necessary for a balanced market, a level of inventory we haven’t seen since March of 2010. The neighboring cities are also experiencing the shortage with 0.5 months of inventory in Mountain View, 1.3 months in Menlo Park, 0.8 months in Los Altos and 0.9 months in Sunnyvale.
Sellers are still firmly in the driving seat and are able to negotiate more favorable contract terms in addition to getting premium sale prices. Buyers are often willing to offer free rent back to the sellers. Non-contingent offers are very common in all market segments even when buyers have to secure a loan.
Month-Over-Month
Month, Year Listed Sold Median Price DOM
March 2013 38 29 $2,200,000 16
April 2013 57 43 $2,200,000 13
May 2013 53 44 $2,100,000 20
June 2013 37 28 $1,901,000 11
Year-Over-Year
Month, Year Listed Sold Median Price DOM
June 2010 70 41 $1,600,000 44
June 2011 44 48 $1,625,000 27
June 2012 54 47 $1,775,000 18
June 2013 37 28 $1,901,000 11
Michael Talis is co-owner of TALIS Real Estate.
