We are excited to share the good news about the 2011 Palo Alto real estate market which continues to demonstrate strength.

The Multiple Listing Service (MLS) reports 454 sales in all of Palo Alto for 2011 compared to 449 in 2010.  While the number of sales remained fairly constant, the average sales price rose to $1,721,155 compared to $1,553,238 in 2010, representing a 10.8% increase.

North Palo Alto:

North Palo Alto posted remarkable growth with 194 sales in 2011 compared to 172 in 2010, a 12.8% increase, and the average sales price rose to $2,154,717 compared to $1,849,746, representing a 16.5 % increase.  There was a surge of activity in the high-end market ($4 million and up).  For 2011 the MLS reports 14 sales of $4 million and over, and we are aware of another 6 that occurred “off-MLS”.  This compares to 7 sales of $4 million and over in 2010.

Months of Inventory:

Another key indicator of the health of the Palo Alto real estate market is the number of months of inventory.  The graph below shows the dramatic rise in inventory levels after the 2008 financial market collapse and a subsequent recovery with 2011 inventory levels hovering around a 2-month supply of homes.

Sale Price to List Price Ratio

In Palo Alto we continue to have more motivated and qualified buyers than homes to sell which has resul

ted in a fairly consistent return of multiple offer situations in which buyers compete for a home frequently offering prices in excess of list price.