One of my specialties is Palo Alto condominiums and I have been keeping a
close eye on the condo price climb. Statistics show this real estate
trend is likely to continue as the market responds to the fundamental economic
law of supply and demand.
According to figures released by the National Association of Realtors, homes
for sale across the United States were at their lowest level in 11 years for
December 2012. Despite increasing demand, home sales fell in December due
to the shortage of homes for sale. The “Existing Home Supply” report is
based on residences that have been previously owned and not new construction.
You will see in the attached graph the drastic decline in homes for sale
over the course of the last year.
The Palo Alto real estate market is feeling the impact of short supply and
condo prices are climbing as a result. Several factors are contributing
to the short supply of available units in Palo Alto:
- Stock market
volatility- people are relying on their homes as their investment
potential as the stock markets face turbulent times.
- Baby Boomers-
having purchased their homes when markets were substantially lower, they
are staying in their homes as long as possible not only for the investment
factor, but to avoid capital gains as well.
Effect””- what realtors are calling the trend of IPO companies creating
massive wealth in Palo Alto and the Silicon Valley, and a subsequent
influx of homebuyers.
- Palo Alto is
desirable- with top-rated schools and amenities, an address in the
community of Palo Alto is considered prestigious so buyers are increasing.
As you will see in the following graph, factors such as these have driven
the price of town houses and condominiums up despite a tough economic
climate. Out of 1,242 listings, the median average in 2012 was $900,000
from only $580,000 in 2004. This provides a condominium owner with a
significant return on their investment if they choose to sell (see graph below).
The steady decline in available units and the condo price climb in Palo Alto
have created a seller’s market. If you have a condominium and you are
considering putting on the market you can expect multiple offers and a price
well beyond what you could have expected in prior years.
I specialize in Palo Alto condominiums and would be happy to discuss ways
for you to not only maximize the exposure of your unit, but also attain the
highest sale price for your condo.