Holiday downtime usually allows for the unique opportunity to reflect on the year. And what a year 2014 was! Menlo Park home inventory, is in the midst of a significant supply downturn, in addition to an abundance of Mid-Peninsula buyers, contributed to home prices reaching all-time highs this year. 2014’s performance, both Q4 and the entire year itself, paints a picture of what we should continue to see throughout 2015.
The Menlo Park inventory chart is truly astounding. Back in 2011, we had what is considered an above-normal inventory level of 5.2 months of supply on the market. This means enough homes were both selling and coming onto the market to equate to about a five-month rolling supply on average. Looking at October, November and December of 2014, we saw only a 1.8 months rolling supply, a radical drop which appears to be continuing into 2015.
2014 was marked by a strong foreign market, continued US economy growth, a great IPO market, incredibly low home inventory levels, and of course a plethora of buyers in the local market. Illustrating the supply and demand model, more buyers with money with no homes to purchase makes for a feeding frenzy when homes hit the market. Overall, 2014 saw a year-over-year climb of 18% in median Menlo Park home sales prices to $2.125M from $1.8M, with the rolling quarter numbers up 32% for Q4.
What the Future Holds
Thus far, market indicators show the US economy will have another strong year and that Bay Area innovation (and VC investment) will continue to thrive. The IPO market is healthy and Peninsula companies continue to hire talented employees. But will the stock market give back gains? Many feel it’s inflated and that certain companies are over-valued. Will the price of oil have an impact on home prices? The less we spend at the gas pump allows for alternative discretionary spending. Depending on how you look at our market historically, we have either five or seven-year runs- and are currently entering year five/six post-2008 crash.
As a long-time local realtor and market expert, I do believe that this year will be a mirror image of last, and that now is an excellent time for sellers to take advantage. Looking at the numbers and historical trends, now is a great time to sell, though fast-forwarding to June or 2016 could nonetheless see a turnaround. Capitalize on this market and contact me at davidweilhomes.com today!