West Menlo Park’s median sales prices continue to hold strong as we roll into the fourth quarter of 2013. (West Menlo Park consists of the Central Menlo, Allied Arts/Downtown, Alpine Road, Sharon Heights and University Heights neighborhoods). In the third quarter of 2013, the West Menlo market’s median sales price grew 38% from $1.7M in the third quarter of 2012 to $2.36M in the third quarter of 2013. This is a $650,000 increase in the median sales price year over year.
So far, the second and third quarters of 2013 have remained strong and are almost a mirror image of each other with a few slight changes in properties “for sale” and “under contract”. The number of homes for sale declined a little to 74 from 79 homes. The number of homes under contract dropped to 37 from 49 homes from the second quarter of 2013. Even though these inventory numbers have been pretty consistent this year, they are dramatically lower compared to the third quarter of 2012, which saw 90 homes for sale. That’s an 18% drop. The 48 homes under contract represent a 22% drop from the third quarter of 2012. Our climbing prices directly reflect this drop in inventory. Low supply, combined with very high demand, is putting tremendous pressure on our market. We saw the same thing in 2004–2008, when our economy climbed out of the dot com bust. I anticipated these price trends would hold strong from the second to the third quarters in 2013. I expect this trend will continue through the end of year this year.