It’s official, buyers have figured out that the Willows is a great place to live. This is evident in the continuing valuation run-up we are seeing in the neighborhood with quick sales and multiple offers.
Prior to the fourth quarter, and mirroring the rest of Menlo Park, valuations in the Willows were increasing. However the pace was not as frantic and steep as some of the surrounding neighborhoods, particularly Allied Arts and Central Menlo. The October sale of 211 Lexington Ave, with five offers and the final sale price of over $1,100/sf, set the tone for a few more rapid-fire sales at record setting valuations that we will see reported in 1Q14 numbers. The median price of homes sold in the Willows in 4Q13 increased over 45% from 4Q12.
Why the dramatic increase in valuations? Lack of inventory.
Inventory in the fourth quarter of 2013 was about half of what is has been over the past three years. Homes for sale are getting snatched up quick with the average days on market of 17, compared to 40 last year. Multiple offers are a given in the Willows and buyers are presenting pre-emptive offers (exceptional offers made before the property goes public or before the appointed offer date).
What does this mean for 2014?
The fourth quarter set the tone for what we will see in 1Q. Not included in these numbers is a sale in the neighborhood at $1,173/square foot for a 1,500 sf home on a 7,000 sf lot, as well as a pre-emptive sale of a property within days of the “Coming Soon” sign being posted in the front yard. Both of these sales indicate buyers need to re-set their anchor price for property in the Willows and be ready to act quickly.
What this means for sellers:
Right now is a fantastic (possibly historic) time to sell. The Willows neighborhood has been discovered and buyers are targeting their home search here, just waiting for inventory. If you are considering selling, now is the time to start prepping your home for sale. To get the most money, you want to present your home in its best light and pre-sale preparation is key.
What this means for buyers:
This is a great neighborhood for families with a tight knit community, several preschools, a local park, neighborhood shops and walking distance to downtown Palo Alto. Be prepared to move quickly and digest valuation fluctuations to be competitive in multiple offer situations. While the valuation increases can be frustrating for buyers, the Willows still presents a value in Menlo Park when compared to other neighborhoods, particularly Central Menlo and Allied Arts, where like-kind homes are $1,300+/sf.