2014 Was Another Bullish Year!
The current tech boom has brought lots of jobs and money to our area once again. As a result, home sellers in 2014 were handsomely rewarded. Using the average of all 14 cities and towns listed below, here’s how 2014 compares to 2009: The number of homes sold was up by 16% while the number of homes for sale was down by 23%. The average “days on market” was down by 59%. All of this activity is eerily similar to the 2000 real estate market. Is this another bubble in the making? We believe more of a cyclical top than a bubble.
The strength of the real estate market is controlled by supply and demand. As the numbers below illustrate, in 2014 demand was UP while supply was DOWN. The tech boom is one of the few financial bright spots globally and is attracting a lot of money, talent, and jobs to our area – which explains the demand side. The reason the supply of homes for sale was down is that owners who saw their home values rising at the greatest rate since 2000 were in no hurry to sell. All of this made it especially difficult for buyers in 2014 as multiple offers and extreme overbidding were the norm. And nearly half of the sales in the high-demand areas were “all-cash”!
Again, comparing 2014 to 2009 on average for the towns above, sales prices were up by 53%, the percentage of list price received by sellers was up by 11%, and the price per square foot of homes sold was up by 47%. Another trend we noticed this year was that “return on investment” was significantly up for those sellers who spruced up their homes prior to selling. It’s always a slight gamble for a home seller because the market might soften during the time it takes to do the fix-ups. However, whenever possible, having the home vacant and staged (including the yards) is usually a profitable bet for home sellers. On the other hand, for those buyers who are lucky enough to find a home for sale with good bones and in a good location which is not spruced up, the financial reward can be substantial.
WANT MORE SPECIFIC INFORMATION?
The towns included above have diverse neighborhoods and prices. When we look at averages we get clues to the overall market, but not the details. If you would like an in-depth analysis of market trends in your particular town or neighborhood, simply call Jeff at 650/823-8057 or Steve at 650/450-0160, or email us: JeffAndSteve@apr.com, or visit our website: JeffAndSteve.com. We’ll be happy to help!
In the charts below, you’ll find 15 years of data for market activity and median sales price for the Year 2014 for Palo Alto, Los Altos, Los Altos Hills, Menlo Park and Mountain View. You can’t find this level of historical data all in one place anywhere else, so if you have any questions or wish to get more info about your community, don’t hesitate to contact us.