Uncertainty Breeds Hesitancy
Summer brought quite a bit of uncertainty in the financial markets. Issues of slowing in China and other developing markets and the impact on the US economy, mixed with a maddening series of mixed message from the Fed on when they would raise rates, resulted in confusion an uncertainty in the local real estate markets as well.
Palo Alto saw our normal slowing of activity over the summer. Inventory was down both seasonally and year-over-year (22% from 2013 and 12.5% over 2014) and the median price for single family homes stabilized at Q2 levels after a steep run-up in the first three months of the year. Median days on the market increased to 36 days from as low as 24 in March. It’s very interesting to note that the decline in new inventory seems to be accelerating this fall as there have been 22% fewer new listings in the period from September 1st through October 14th this year than in 2014 – a period when we normally see an uptick in inventory going into the year-end holidays.
What does this mean if you’re a buyer? You may have fewer competitors on the property you want to buy and you might even have a few more days to look at it before making an offer. Take advantage of this lull – it probably won’t last!
It’s still a sellers’ market, but pricing your home at the right level has become more important. Properties priced at or slightly below market are still selling quickly and with multiple offers, but those above market are not selling. A 780 SF downtown condo sold recently for $1.25 million with a pre-emptive offer while another, 20% larger, unit in the same building was listed at $1.275 and has now been on the market for 55 days – even with a price drop to $1,149,000. A bit too low is MUCH better than too high!