February 2011 Market Snapshot
Home sales data for Palo Alto, Los Altos, Los Altos Hills and Menlo Park have recently become available from MLSlistings.com. Here’s a look at data for February from the last 10 years and our commentary about what it means to you. If you would like information about another city or neighborhood, let us know.
Since the financial meltdown of 2008, lending guidelines have changed significantly. It is now virtually impossible for most families (who wish to trade up) to buy a larger home first and then sell their present home second. Trade-up buyers have been able to buy first and sell second for more than 20 years. Today, a trade-up buyer has to either move twice (first into a rental after selling their present home – and then go shopping for the new home) or offering a sales price sufficient to get the seller to accept an offer “contingent” upon the successful sale of the buyers current home. The buyer would likely have to pay significantly for that contingency. Most sellers would rather not take the risk of the buyer’s home not selling.
This change in lending guidelines is one of several factors (economy, Prop 13, aging in place, etc.) causing a distinct shortage of quality homes for sale in our area. The resulting imbalance of supply and demand will likely increase the upward pressure on sales prices.
The charts below show the median sales prices in February, ’02 through ’11, plus the number of home sales each February, and the number of homes on the market on February 28th for Palo Alto, Los Altos, Menlo Park and Los Altos Hills. At the bottom of the charts, you will see the “months of inventory” (number of homes for sale divided by the number of sales), plus the average percentage of list price received by sellers during December of each year.