Arn Cenedella

Archive for the 'Palo Alto Real Estate' Category

What has happened to our local real estate market over the past 12 months?

Let’s take a look at inventory levels for single family homes in Palo Alto, Menlo Park, and San Carlos over the past 12 months.

As we can see, the number of homes for sale in Palo Alto, Menlo Park, and San Carlos dropped during 2009 reaching a low right around the holiday season where many homeowners just take their homes off the market.

Since the first of the year inventory levels have increased:

Currently, there are about 90 homes for sale in Palo Alto and Menlo Park and about 50 homes for sale in San Carlos.

What is striking is that the number of homes for sale March 1, 2009 compared to March 1, 2010 is that in all three cities, current inventory is much less than 12 months ago.

Inventory in Palo Alto has dropped from 135 to 90.

Inventory in Menlo Park has dropped from 130 to 90.

Inventory in San Carlos has dropped from 85 to 50.

This bodes well for our real estate market. When inventory drops, buyers are competing for fewer properties.

We are starting to see multiple offers in Palo Alto, Menlo Park, and San Carlos especially in the “entry level price range” – $1.2M and below for Palo Alto and Menlo Park and $1M and below in San Carlos.

Let’s take a look at the Market Action Index for Palo Alto, Menlo Park, and Palo Alto.

A value above 30 indicates a sellers’ market. A value below 30 indicates a buyers’ market.

As you can see the market action index has increased steadily over the past 12 months. What was a very “cold” market – ie poor for sellers – 12 months ago has “warmed” significantly over the past 12 months. It still is a buyers’ market but much less so than 12 months ago. If the Market Action Index continues to improve at the same rate, we will see a balanced market in about another 18 to 24 months. Of course, no one can predict the future and many things can either accelerate or reverse the trend of the past 12 months.

The market action index in Palo Alto has increased from 18.5 to 21.5.

The market action index in Menlo Park has increased from 17.5 to 21.0.

The market action index in San Carlos has increased from 16.5 to 20.5.

Let’s look at price per square foot in Palo Alto, Menlo Park, and San Carlos.

The median price per square foot has decreased minimally in all three cities.

So what’s my overall take?

Prices certainly has not yet started to jump up but the market is getting stronger – inventory has dropped and the market action index has increased. We are setting the stage for a solid market moving forward.

As a buyer, I would not be in any great hurry to buy but we are near the bottom. So keep looking and when you find a house you like that you can purchase at a good value, go for it.

After 32 years in the local real estate market, I can tell you when the market turns upward, it turns upward QUICKLY. Interest rates certainly are headed up. So don’t make a “panic” purchase as many did in 2004 and 2006 but be realistic.

Palo Alto condominium market

Let’s take a look at the Palo Alto condominium market.

Most of the condominiums in Palo Alto are located in downtown Palo Alto or near ther California Avenue Shopping District on in south Palo Alto along El Camino or near 101 down by San Antonio and East Meadow.

Prices for Palo Alto condominiums and number of sales per month has held fairly steady over the past 12 months.

Average price are around $750,000 with about 4 or 5 sales per month.

It is a buyers market for Palo Alto condominiums with the days of inventory remaining at 160 days or higher.

90 days of inventory is typically considered balanced.

The number of Palo Alto condominiums sold year to date has decreased steadily from a high of about of 150 in 2005 to 64 in 2009.

The sale price to list price for Palo Alto condominiums has remained steady ay 97% over the past year.

To search for Palo Alto condominiums, click here.

Palo Alto Real Estate Market update

The table belows shows home sale data in Palo Alto:

Trends At a Glance	Sep 2009	Previous Month	Year-over Year
Median Price	$1,240,000	$1,298,000 (-4.5%)	$1,467,000 (-15.5%)
Average Price	$1,337,490	$1,494,330 (-10.5%)	$1,750,850 (-23.6%)
No. of Sales	36	27 (+33.3%)	24 (+50.0%)
Pending Properties	46	49 (-6.1%)	21 (+119.0%)
Active	107	96 (+11.5%)	93 (+15.1%)
Sale vs. List Price	98.9%	97.7% (+1.2%)	99.3% (-0.4%)
Days on Market	51	40 (+29.0%)	33 (+53.3%)

The average and median sales price in Palo Alto dropped between 5% and 10%.

The number of sales increased to 36 in September 2009 from 27 in August 2009.

The sales to list price ratio increased slightly and days on market increased from 40 to 51.

For Palo Alto real estate market data in greater detail, click here.

Palo Alto real estate market Average Days on Market 2005 to present

Below you will see a chart that graphs Average Days on Market in Palo Alto from 2005 to present. Days on market is defined as number of days from list date to contract date.

As you can see, average days on market in Palo Alto in 2005 and 2006 was 30 days.

From July 2008 to July 2009, average days on market increased to about 100 days.

Days on market in Palo Alto appears to have stabilized over the past few weeks – again this may indicate we are near the bottom.

Palo Alto real estate market Inventory 2005 to present

Let’s look at the Palo Alto market for the perspective of available inventory (or homes for sale) from January 1, 2005 to now.

In 2005 and 2006, average inventory was about 75 to 80 homes.

Inventory than dropped to an average of about 40 homes in 2007.

Inventory has risen significantly since January 1, 2008 to July 1, 2009 – topping at 160 !

Since that time, inventory has dropped – another indication that the Palo Alto real estate market may be stabilizing.

Palo Alto real estate market Median Price 2005 to present

Let’s take a look at the Palo Alto real estate market since January 1, 2005.

The chart below shows the median price for a single family home in Palo Alto.

The current median price is similar to the median price in 2005.

From July 1, 2006 to July 1, 2007; the median price in Palo Alto increased 60% – Amazing!

The Palo Alto real estate market appears to have given up all of the gains during that period.

On a positive note, the curve during the current recent time period is “flatenning” which may indicate the Palo Alto real estate market is near equilibrium.

The real estate market on San Francisco Peninsula has heated up

In my previous few posts, I documented that the number of homes sold in San Carlos Menlo Park and Palo Alto during the second quarter of 2009 was TWICE the number of homes sold in the first quarter of this year.

The numbers tell the story – but stories also illiminate the numbers.

I recently wrote an offer for a buyer client of mine on a property listed listed at $619,000.

My clients offered $670,000 “as is” - had a solid pre-approval and a 35% cash down payment.

This offer had only an appraisal contingency and would close in 30 days.

The buyers had read and approved all reports, inspections, and disclosures.

So basically the offer was as clean an offer as any seller could want.

Offers were due earlier this week in the early afternoon of the offer day.

In the morning, I checked with seller agent and was told there were 8 offers.

By the end of the day, there were 25 offers on this property!

I am not sure what property sold for but it was over $700,00 and I suspect closer to $750,000 by the time the dust settled.

I have heard of other properties priced in the $400,00 to $500,00 range in Redwood City selling for $100,000 over list.

So if you are waiting for the bottom, I think we may have already hit bottom and have started back up.

This is certainly true under $1,000,000 price range.

Palo Alto real estate data

Here is real estate data for Palo Alto over the past three years expressed on a quarterly basis.

The charts below show that the real estate market improved in Palo Alto like it did in San Carlos and Menlo Park.

It looks like the real estate market in Palo Alto has improved.

Let’s see if this trend continues once the third quarter data is complied.

San Carlos Menlo Park and Palo Alto markets are on the upswing!

The real estate markets in San Carlos, Menlo Park, and Palo Alto are showing signs of strength.

It is my humble opinion that the market has stabilized and is on the upswing.

Don’t take my word for it, let’s look at the data comparing the first quarter 2009 with the second quarter in 2009 for San Carlos, Menlo Park, and San Carlos. Next month, I will update these figures and show third quarter activity which I expect will be even stronger than the second quarter.

San Carlos

Trends At a Glance Apr-Jun 2009 Previous Quarter Year-over Year Median Price $895,000 $950,000 (-5.8%) $950,000 (-5.8%) Average Price $924,144 $985,752 (-6.2%) $1,076,940 (-14.2%) No. of Sales 62 33 (+87.9%) 75 (-17.3%) Pending Properties 19 20 (-5.0%) 28 (-32.1%) Active 59 72 (-18.1%) 74 (-20.3%) Sale vs. List Price 98.0% 96.7% (+1.4%) 99.5% (-1.5%) Days on Market 41 41 (+1.0%) 35 (+16.3%)

The number of closed sales increased to 62 homes in the second quarter from 33 in the first quarter – 87.9% increase.

Menlo Park

Trends At a Glance	Apr-Jun 2009	Previous Quarter	Year-over Year
Median Price	$1,137,500	$915,000 (+24.3%)	$1,637,500 (-30.5%)
Average Price	$1,373,500	$931,196 (+47.5%)	$1,776,390 (-22.7%)
No. of Sales	102	50 (+104.0%)	108 (-5.6%)
Pending Properties	33	26 (+26.9%)	27 (+22.2%)
Active	90	132 (-31.8%)	112 (-19.6%)
Sale vs. List Price	98.1%	97.5% (+0.5%)	101.2% (-3.1%)
Days on Market	53	53 (+0.4%)	28 (+90.3%)

The number of closed sales increased to 102 in the second quarter from 50 in the first quarter – a 104% increase.

Palo Alto

Trends At a Glance	Apr-Jun 2009	Previous Quarter	Year-over Year
Median Price	$1,372,500	$1,287,500 (+6.6%)	$1,550,000 (-11.5%)
Average Price	$1,568,630	$1,451,820 (+8.0%)	$1,780,320 (-11.9%)
No. of Sales	114	48 (+137.5%)	122 (-6.6%)
Pending Properties	24	28 (-14.3%)	43 (-44.2%)
Active	117	140 (-16.4%)	75 (+56.0%)
Sale vs. List Price	98.0%	97.4% (+0.6%)	102.3% (-4.1%)
Days on Market	41	43 (-4.6%)	25 (+61.7%)

The number of closed sales increased to 114 in the second quarter from 48 in the first quarter – a 137.5% increase.

In all three cities, inventory has dropped from the first quarter to the second quarter.

In San Carlos, inventory dropped from 72 homes to 59 homes.

In Menlo Park, inventory dropped from 132 homes to 90 homes.

In Palo Alto, inventory dropped from 140 homes to 114 homes.

Days on market in San Carlos, Menlo Park, and Palo Alto has remained stable in all three cities – between 41 to 53 days on market.

Average and median prices increased in Menlo Park and Palo Alto while dropping slightly in San Carlos.

Please understand I am not saying prices will start to jump up 10% to 15% per year. But in my 31 years in the San Francisco Peninsula market, I have been through many cycles and typically the start of a rally is characterized by increasing sales volume, decreasing inventory while prices remain flat. If the trend of increased sales and lower inventory continues, then one can predict prices can start to increase.

It will be interesting to see if the third quarter sales data shows a continuation of the trend. I believe it will.

Market Snap Shot – San Carlos Menlo Park and Palo Alto

San Carlos real estate 7 day market snap shot shows the following:

Palo Alto real estate 7 day market snap shot shows the following:

In Palo Alto 94301, here is the current data:

In Palo Alto 94303, here is the current data:

In Palo Alto 94306, the current data is shown below:

Here is the data for Menlo Park: