LOCAL MARKET ACTIVITY AND TRENDS- PRICE PER SQUARE FOOT In Palo Alto, Menlo Park, Atherton, Portola Valley, Woodside And Los Altos

The local housing market showed exceptional strength throughout 2012.

With the growth of social media and Internet firms including Facebook, Yelp, Twitter and Yammer, the San Francisco Bay Area has witnessed the creation of a new wave of millionaires.

 According to data compiled by Bloomberg, 2012 initial public offerings by Bay Area companies raised a record $17.5 billion, more than double the $8.3 billion reached in 1999 at the height of the dot-com boom. The 2012 Bay Area IPOs generated $9.4 billion in cash for selling shareholders.

 A broad mix of buyers produced a huge demand in 2012. We saw a higher than average number of cash investors, as well as a return to the market of move-up buyers who sell their existing homes to buy larger more expensive houses.

 First-time buyers encouraged by historic low interest rates and reports of rising prices also fueled demand. As a result, most homes saw multiple offers, with cash buyers dominating the winning bids.

 Low mortgage rates and job stability continue to motivate buyers. A 30-year fixed-rate mortgage averaged 3.35 percent toward the end of 2012, according to Freddie Mac. Rates are expected to remain low. The Federal Reserve, which has kept its benchmark interest rate near zero since 2008, this month said it would hold it low "at least as long" as unemployment remains above 6.5 percent and inflation projections are for no more than 2.5 percent.

 
Inventory remained low relative to demand. At the end of 2012 the listing inventory was at a historic low, with 11 active listings in Palo Alto, 18 in Menlo Park, 20 in Atherton, 17 in Portola Valley, 24 in Woodside and 12 in Los Altos. The low inventory in all the above mentioned cities signals a strong market for 2013.

 The townhouse/ condominium market was as strong as the market for single family houses. 147 units sold in 2012 in Palo Alto, with the medium sale price increasing 17% to $890,000 in 2012 from $760,000 in 2011. 74 units sold in Menlo Park with a medium price of $892,000, an increase of 27% from $702,000 in 2011.

Palo Alto:
 

There were 472 single-family home sales in Palo Alto in 2012 (compared to 447 in 2011).
The median single family home price increased 21% in Palo Alto ($1,726,000 in 2012 compared to $1,428,000 in 2011).

The sale to list price ratio in Palo alto was 103% and the average days on the market was 23 days, In

 Following are charts showing price per square foot by areas:

Price per square foot by area in Palo Alto:

 

 

Menlo Park:

 

There were 391 sales in Menlo Park (compared to 344 in 2011). The median single family home price increased 11% in Menlo Park ($1,325,000 in 2012 compared to $1,194,000 in 2011).

In Menlo Park the sale to list price ratio was 101% and the average days on the market was 28 days.

 Price per square foot by area in Menlo Park:

Atherton:

There were 84 sales in Atherton in 2012 (compared to 81 in 2011). Based on listings on MLS, there was a decrease in the median price of -3% in Atherton ($3,200,000 in 2012 compared to $3,228,000 in 2011). However, the MLS statistics in Atherton do not fully reflect the actual market data due to strong off-market sales activity with at least 8 publicly recorded transactions for more than $10 million.The sale to list price ratio in Atherton was 79% and the average days on the market was 70 days. The strongest sales activity in Atherton was for homes above $3 million.

 

Price per square foot by area in Atherton:
                                                              

 

Portola Valley:

In Portola Valley there were 77 sales in 2012 (compared to 70 in 2011). The median sale price increased 20% in Portola Valley ($2,200,000 in 2012 compared to $1,827,000 in 2011). The sale to list price ratio in Portola Valley was 97% and the average days on the market was 70 days, m The strongest sales activity in Portola Valley was for homes above $2 million.

Price per square foot by area in Portola Valley:

 

 

 

Woodside:

 There were 84 sales in Woodside in 2012 (compared to 94 in 2011). The MLS statistics show a decrease in the medium price of -11.6% in Woodside ($1,610,000,000 in 2012 compared to $1,800,000 in 2011). The sale to list price ratio in Woodside was 94% and the average day on the market was 88 days. However, it is important to note that there has been noticeable off-MLS activity in Woodside, and as a result the MLS statistics for Woodside do not fully reflect the actual market data. The strongest sales activity in Woodside was above $2 million.

 

Price per square foot by area in Woodside:                                                                               

 

 

 

Los Altos:

In Los Altos there were 365 sales in 2012 (compared to 307 in 2011). The median sale price of a single family home price increased 11% in Los Altos ($1,825,000 in 2012 compared to $1,647,000 in 2011). The sale to list price ratio in Los Altos was 94% and the average days on the market was 88 days. The strongest sales activity in Los Altos was for homes above $2 million, followed by homes in the $1.6 to $2 million range.    

Following are charts showing price per square foot by areas:

Price per square foot by area in Los Altos:

 

 

 

 Looking forward:

Our local housing market will continue to be strong in 2013, reflecting the pace of IPOs and the increase in hiring that should continue through the year.

For sellers, there is no better time to sell your home.

For buyers, If you have a stable income, it is good time to buy before further increases in house prices occur.

For investors, real estate investments historically have been a more secure investment than stocks and a hedge against inflation. In the past two years, investors accounted for 33% of our local home sales, and this trend is expected to continue this coming year. Investing in California real estate is a good diversification strategy.

  

 Statistic sources are provided by MLS deemed reliable but not guaranteed