2016 Year-end Real Estate Report

The real estate market numbers for 2016 are in, and overall they indicate that it’s been another strong year for Peninsula real estate, although there have been some signs of a shift in market conditions as detailed below. The market remains healthy, but not as robust as the past two years.

In today’s post we will provide an overview of the communities where we work and over the next few days we will be posting a more in depth review of each community.

Here are the highlights for single-family homes based on data provided by MLSListings.com.

Santa Clara County

Number of Sales

Area	2015	2016	% Change
Santa Clara County	10,869	10,328	-5%
Los Altos	310	261	-16%
Los Altos Hills	94	98	+4%
Palo Alto	326	371	+14%

(Source MLSListings.com)

Average Days on Market

Area	2015	2016
Santa Clara County	24	27
Los Altos	16	20
Los Altos Hills	31	52*
Palo Alto	18	23

(Source MLSListings.com) 

*In Los Altos Hills four homes were on the market for over 200 days prior to selling, including one that finally sold after 763 days on the market.  When these four homes are excluded, the Average Days on Market for Los Altos Hills for 2016 is 35 days. 

Median Sales Price

Area	2015	2016	% Change
Santa Clara County	$950,000	$1,020,000	+7%
Los Altos	$2,745,500	$2,710,000	-1%
Los Altos Hills	$3,612,500	$3,862,500	+7%
Palo Alto	$2,668,500	$2,550,000	-4%

(Source MLSListings.com) 

….and, what do you get for your money?

We represented the seller of this Palo Alto home that sold for just under $2,700,000, somewhat above the Palo Alto Median Price of $2,550,000.

Sales Price to List Price Ratio

Area	2015	2016
Santa Clara County	105.1%	102.8%
Los Altos	109.7%	104.4%
Los Altos Hills	105.1%	98.1%
Palo Alto	112.5%	104.0%

(Source MLSListings.com)

The Sales Price to List Price Ratio decreased in all of the above cities. While many homes are still selling in excess of list price in most communities, one the hallmarks of the 2016 real estate market is that more homes are selling at less than their list prices, a situation that was infrequent in prior years.

San Mateo County

Number of Sales

Area	2015	2016	% Change
San Mateo County	4,320	4,183	-3%
Atherton	76	70	-8%
Menlo Park	315	299	-5%
Portola Valley	62	63	-2%
Woodside	92	73	-22%

(Source MLSListings.com)

The number of homes sold in Woodside is significantly lower than 2015 and is the lowest number of homes sold since 2010. 

Average Days on Market

Area	2015	2016
San Mateo County	22	26
Atherton	49	73*
Menlo Park	17	25
Portola Valley	30	33
Woodside	53	73*

(Source MLSListings.com)

*The Average Days on Market for Atherton and Woodside shows a remarkable increase, however this includes sales data in each community for 5 homes that were on the market for over 200 days. When these properties with excessively long days on market are excluded, the Average Days on Market is 50 days for Atherton and 51 days for Woodside.

Median Sales Price

Area	2015	2016	% Change
San Mateo County	$1,250,000	$1,300,000	+4%
Atherton	$5,950,000	$6,002,500	+.9%
Menlo Park	$2,025,000	$2,150,000	+6%
Portola Valley	$2,633,000	$2,700,000	+2.5%
Woodside	$2,755,000	$2,717,500	-1%

(Source MLSListings.com)

…and what do you get for your money?

This Menlo Park home was represented by Alain Pinel Realtors and sold for $2,100,000, just under the 2016 Median Price for Menlo Park. 

Sales Price to List Price Ratio

Area	2015	2016
San Mateo County	107.9%	105.2%
Atherton	101.3%	97.7%
Menlo Park	107.5%	103.9%
Portola Valley	103.3%	100.4%
Woodside	100.6%	97%

(Source MLSListings.com)

All communities posted a lower Sales Price to List Price in 2016 consistent with the market trend in Santa Clara County.

Summary

The chart below reflects the dramatic drop over the past 10 years in the supply of available single family homes in most all of the communities where we work.

Area	2006	2016	% Change
Santa Clara County	11,887	10,328	-13%
Los Altos	353	261	-26%
Los Altos Hills	98	98	0%
Palo Alto	654	371	-43%
San Mateo County	5,039	4,183	-17%
Atherton	100	70	-30%
Menlo Park	369	299	-19%
Portola Valley	59	63	+7%
Woodside	56	73	+30%

(Source MLSListings.com)

One of the most important aspects of working with clients in a changing market is helping them understand market conditions and set realistic expectations.

Our advice to buyers:

Current market conditions are prime for buyers. There are fewer multiple offer situations and interest rates remain historically low although they have begun to rise. International economic downturns in Europe and China have resulted in a stronger U.S. dollar, eroding the buying power of overseas buyers and resulting in fewer of them looking to invest in local real estate. This represents a wonderful opportunity for loan-reliant buyers who are at a disadvantage when competing with all cash buyers in a multiple offer.

Successful buyers are those who recognize that if they wish to live in one of these communities they will need to be flexible, focused and engaged due to the more limited number of opportunities.

Our advice to sellers:

During the past year the Average Days on Market increased and the Sales Price to List Price ratio decreased. While inventory levels are lower in most communities, demand from qualified buyers has not diminished. Buyers continue to demonstrate price sensitivity by not offering on homes they perceive as “overpriced”.

Some homeowners who attempted to sell their homes in 2016 were not successful. For instance, in Palo Alto, the community long considered impervious to economic downturns and external conditions, approximately 50 homes were introduced to the market and were taken off without selling.

Successful sellers are those who recognize that to benefit from market conditions their list price, presentation strategy and market timing need to generate interest from more than one buyer.

The market remains excellent for sellers with realistic expectations. Homes continue to sell quickly, at prices close to their list prices and with very favorable terms.

Are you considering a real estate transaction in 2017?

Our goal is to flawlessly serve our clients with integrity, expertise, compassion and a sense of humor to help them through the rigors of a residential real estate transaction. Please let us know if we can be of support to you. It would be our pleasure!