The third quarter of this year in Portola Valley represented a healthy market that is more balanced than we have seen in previous years. Inventory and number of sales are about the same as they were this time last year, and prices are slightly higher. The main difference is that homes are taking longer to sell and sometimes with price reductions and/or selling for less than the original list price. Here are the numbers:
Activity and Inventory
Inventory of homes for sale was exactly the same at 17 properties for both Q3 2015 and Q3 2016. Sales activity was also consistent, with 15 homes sold in each quarter year over year. In fact, on a year to date basis, both the inventory of homes for sale and the number of sales have remained stable from 2015 to 2016.
The median sold price for Q3 was up 5.6% from $2.7 million in 2015 to $2.85 million in 2016:
Even so, this quarter we saw a lot of price reductions. Of the 15 homes sold, five took price reductions and 11 sold for less than the original asking price. In contrast, last year of the 15 homes sold, only two had price reductions and six sold below the original listing price. This explains the dramatic shift in the ratio of median sale price to original list price which was down 15% from 110% to 94%:
Last year in the third quarter, the homes that sold below list price tended to be in the upper tier of the market, but this year we saw homes selling below original list price across all market segments.
Days on Market
Not only were houses selling at a moderate discount to their list prices, they also took longer to sell. In Q3 2016 the median number of days on market was up 43% to 65 days compared to 45 days this time last year:
Although it’s not conventional wisdom, this can still be a good time to sell a property that is well priced and well prepped for market. Inventory in the fourth quarter of the year tends to be lower, meaning less competition for sellers. Serious buyers, some who’ve been looking for months, would love to be settled just in time for the holidays. Finalizing a sale by year end creates a celebratory outcome for both motivated sellers and motivated buyers!