A few days ago we wrote about market conditions in our local market area, and this a story that adds color to the statistics we posted.

We recently had the experience of using a “Coming Soon” sign at one of our listings.  We have never posted a sign on a property until after it is entered onto the Multiple Listing Service (MLS) but in this instance the clients we were representing wanted a sign.  In order to keep the real estate community informed, the day the sign was erected, we sent out an e-mail communication to the local real estate offices letting them know about the listing.

Four days later we were able to change the sign to Sale Pending.

For decades our local real estate community has been a cooperative community in which listing brokers share the availability of their listings with other brokers, and the best vehicle for doing this is the Multiple Listing Service (MLS).  We personally are strong advocates of using the MLS because it is important for sellers to know that they have received the maximum exposure for their homes, and that they have received the highest and best price.  It is also vital that buyers trust that they will be kept informed about all of the available opportunities, and the MLS is the best way for them to be completely informed.

Most buyers who are looking for homes are already registered through various websites for automatic notification by e-mail of the availability of homes and have set up preferences, save home searches, track properties, automate searches, and have access to additional information not available to the general public. Click here to set up your own MLS account and register your own preferences for notifications.

Over the years of representing sellers, however, there are occasionally extenuating circumstances where the use of the MLS to promote a home may not be best.  When we have suggested to our clients that they might consider marketing their home without the use of the MLS, it is typically due to a health situation, privacy needs or a tenant-occupied home, and we have always had a promotion plan that includes other agents and brokers.

It is important to also keep in mind that Realtors inform their clients of the various marketing possibilities, but the property owners are the ones who choose the strategy and make the decisions.

The quick sale of this particular home is an example of how fast our market is moving (see previous post), and also underscores the importance of working with a knowledgeable local Realtor who is aware of purchase opportunities that are beyond those promoted through the Multiple Listing Service.

The robust activity in these communities is seen in the number of sales relative to the number of available homes.  The graphs below give a good picture of the past two years’ market conditions.  The light green bar shows the number of homes for sale, the dark green bar show the number of homes that have closed escrow while the red line shows the number of pending sales.

LOS ALTOS – LAST 24 MONTHS

For the month of February there were 35 new listings and as shown on the above graph there were 28 pending sales.

MENLO PARK – LAST 24 MONTHS

For the month of February there were 35 new listings and as shown on the above graph there were 28 pending sales.

PALO ALTO – LAST 24 MONTHS

In Palo Alto for the month of February there were 42 new listings and 39 pending sales.  At the end of February there were 27 unsold homes as shown above.

This is a great time to sell your home!  Buyers are fueled by their optimism, confidence and the continued low interest rates that make their purchase more affordable.

Please contact us so we can share winning strategies for achieving your real estate goals.

We recently represented the seller of a home that had an outstanding building permit that had not received a final sign-off from the local jurisdiction.  The sellers disclosed the situation and provided a copy of the building permit issued as well as the contract with the builder they hired to complete the modification. The building code and zoning ordinance have changed in such a way that the modification in question could not be replicated today.

The home sold in a multiple offer.  As the sellers considered the offers that were presented, one of the determining factors was that the agent representing the ultimate buyer of the home documented that they had accompanied the buyer to the building department and they had researched the issue.  The sellers understood that the buyers had done their “home”work ahead of time and that they were fully informed of the situation and the possible implications.

Link: http://www.inman.com/buyers-sellers/columnists/dianhymer/5-building-permit-issues-you-cant-ignore

Atherton:

Over the past 3 years the Atherton market has remained stable.  During 2011 the number of sales reported through the Multiple Listing Service (MLS) was 73, a decline from 2010 in which 81 closed sales were reported.  The average sales price has risen slightly to $3,526,944 up from $3,510,435.

Another indicator of a stable market is the inventory level.  The graph below shows that the supply of available homes has hovered around 5 months’ inventory, representing a decline from 2010, therefore indicating an improved market.

The Sales Price to List Price ratio in Atherton shown on the graph below increased significantly in 2011.  Buyers do not want to purchase if they fear that values may further decline.  Improvement in this ratio we believe reflects improved buyer confidence in our local real estate market.

Portola Valley

The Portola Valley market saw a dramatic rise in the number of sales from 54 in 2010 to 70 in 2011, a 29.6% increase.  The rise in number of sales was accompanied by a significant increase in the average sales price to $2,255,614 up from $1,849,640, or 21.9%.

As shown in the graph below, Portola Valley’s inventory levels decreased to around a four month supply for most of 2011.

The Sales Price to List Price ratio bounced around throughout the year but remained above 92%.

Woodside:

In 2011 Woodside experienced remarkable growth in number of sales reported to the Multiple Listing service, 100 compared to 55 in 2010.  The average sales price decreased to $2,176,392 from $2,512,570.

As shown in the graphs below, the supply of available homes remained consistently below 10 months for the year and the Sales Price to List Price ratio remained above 92% for the year.

Los Altos:

During 2011, there were 309 closed sales in Los Altos representing a decrease of 7% from 2010 sales while the average sales price rose to $1,769,439 an increase of 4.8% over the 2010 average.  Another key indicator of a stable market is the number of months’ inventory which hovered at about 2 months for most of 2011.

Los Altos Hills:

During 2011, there were 100 closed sales in Los Altos Hills representing a 23% increase over 2010.  The average sales price rose 3.98% over the 2010 average to $2,693,666.  Inventory has decreased to about a 5 month supply.

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.

We thought you would be interested in an update on Menlo Park’s real estate market.  The market remains stable with the number of 2011 sales rising to 378, a 5.5% increase over 2010, while the average sales price held steady at $1.3 million.

Months of Inventory:

Another key indicator of the health of the local real estate market is the number of months of inventory.  The graph below demonstrates that for most of 2011 the inventory level has hovered about 2-months, representing a decline from the previous 3 years.

Sale Price to List Price Ratio:

The Sale Price to List Price Ratio has averaged 99.7 %…shall we call that 100%?!  At times the ratio has exceeded 100% and this occurs when confident, well-qualified buyers make “pre-emptive” offers, i.e. an offer prior to a property receiving lengthy market exposure, or competing in multiple offers which often results in buyers writing offers at more than the list price.

The graphs below reflect quarterly sales activity reported to the Multiple Listing Service (MLS) in Atherton, Portola Valley and Woodside.

Atherton

In Atherton based on Multiple Listing Service activity, the number of sales and the average sales price are holding steady year to year.

Portola Valley

For the first 3 quarters Portola Valley experienced a 30% increase in the number of sales from 43 in 2010 to 56 year-to-date.  The average sales price also increased year to year.  The 3^rd quarter, however, has seen fewer sales and a decrease in the average sales price.

Woodside

Woodside has seen a significant increase in the number of sales while the average sales price has remained just around $2 million.

Overall the local real estate market remains healthy!

The graphs below reflect quarterly sales activity reported to the Multiple Listing Service (MLS) in Los Altos and Los Altos Hills since 2005.

For the first 3 quarters of 2011 in Los Altos the number of sales is down slightly when compared to 2010, while the average sales price has risen from $1,675 million to $1,718 million or, 3%.  Los Altos Hills has experienced a remarkable increase in the number of sales in 2011, 81, compared to 56 for the same period in 2010, and the average sales price has risen from $2,561 million to $2,774 million or 8%.

Other key market indicators are the Average Days on Market and the Sales Price to List Price ratio.

The Days on Market for Los Altos and Los Altos Hills with the exception of a rise at the end of the summer are much improved over the past few years.  The Sales Price to List Price ratio for Los Altos remains consistently above 98% for the year, and in Los Altos Hills is appearing steadier at around 95%.

Los Altos Hills - Sales Price to List Price Ratio

Los Altos Hills - Days to Sell

Los Altos - Sales Price to List Price Ratio

Los Altos - Days to Sell

The graphs below reflect quarterly sales activity reported to the Multiple Listing Service (MLS) in Menlo Park since 2005.

For the first 3 quarters of 2011 there have been 285 sales, compared to 275 for the same period in 2010.  The average sales price year to year has remained the same at around $1,285 million.  The 3^rd Quarter of 2011 shows declines in both the number of sales and the average sales price.

Another market indicator that shows signs of stability is the Average Days on Market reflecting remarkable improvement over the past few years, although it has been creeping up during the 3^rd Quarter.  The sales price to list price ratio has been hovering between 99% – 100% for most of the year, but decreased during the 3^rd Quarter.

Overall, however, the market remains stable.

Days to Sell, Average

Sales Price to List Price Ratio