Palo Alto’s Year in Review
The year ended with a bit of a whimper. Buyers seemed to need a break from the frustrations of the market and sellers appeared to be waiting to see what the Fed, the US economy, China’s economy and our crazy political season would do. (I’m just back from visiting my mother-in-law in South Africa and all anybody wanted to talk about was Donald Trump!) Overseas buyers also were less of a factor in the fourth quarter.
On the surface, prices ended the year close to where they began with the median price for a single-family home in Palo Alto at $2,400,000. But looking at the rolling 3-month trend paints a different picture – prices were up 9.3% .
The dearth of inventory, a trend which accelerated in 2015, makes it important to look at rolling averages because a few very high- or low-priced properties can seriously skew the data. The chart below shows the rolling 12-month inventory of homes on the market in Palo Alto for the past 5 years. It’s a trend we hope will reverse, but we don’t yet see signs that it will.
Median days on market spiked at the end of the year, reflecting both the slowdown on the buyers side and the fact that many of the properties on the market were the ones that had been there for several months. DOM normally goes up at the end of the year, but this year was more pronounced at 41 days compared to 28 in December 2014.
As 2016 begins, the buyers appear to have had their rest and are back at open houses. There is no question that our local economy is robust and there are still lots of people looking for homes. If you’re a seller, it’s a great time to get your house on the market while others are waiting for spring. As of this writing, there are only 12 single-family homes for sale in Palo Alto!
