Peninsula Real Estate Report: Q1 – Q3 2018

Overall the 2018 market has been setting records, but there are signs that the sizzling market may be cooling.

Santa Clara County

The numbers are in for the first 3 Quarters of 2018 and they show a strong performance through the end of September.  The Median Sales Price is up substantially while the number of homes sold continues to decline.  Year-to-date the Average Days to Sell is also down in most communities.

However, we are noting a shift in the market.  The California Association of Realtors (CAR) published a report in mid-September indicating that sales for California are down for the fourth month in a row.  Typically our local real estate market has seemed impervious to trends in other parts of the state, but we too are seeing signs of declining sales and increasing inventory.

Number of Homes Sold

Area	Q1 – Q3 2017	Q1 – Q3 2018	Change
Santa Clara County	8,311	7,763	-6.6%
Los Altos	247	212	-14.17%
Los Altos Hills	71	59	-16.9%
Palo Alto	270	262	-3.0%

(Source: MLSListings.com)

Average Days on Market

Area	Q1 – Q3 2017	Q1 – Q3 2018	Change
Santa Clara County	21	17	Down
Los Altos	18	13	Down
Los Altos Hills	35	49	Up
Palo Alto	22	15	Down

(Source: MLSListings.com)

Median Sales Price

Area	Q1 – Q3 2017	Q1 – Q3 2018	% Change
Santa Clara County	$1,140,000	$1,355,000	+18.86%
Los Altos	$2,983,000	$3,400,000	+13.98%
Los Altos Hills	$4,015,000	$4,850,000	+20.8%
Palo Alto	$2,855,500	$3,231,360	+13.16%

(Source: MLSListings.com)

Santa Clara County: Months of Inventory/Number of Sales

The graphs below show the Months of Inventory (blue bar) compared to the Number of Sales (yellow line).  The Number of Sales in Santa Clara County has declined since April 2018, while inventory has increased to almost 2 months.

Palo Alto: Months of Inventory/Number of Sales

The trend of increasing inventory compared to the number of sales is sharply noted in Palo Alto where the months of inventory reached 3.4, the highest since September 2010 when it reached 4.2 months.  Prior to September 2018, the YTD average months of inventory was 1.1.

San Mateo County

San Mateo County’s market trends are similar to those of Santa Clara County with YTD strong performance, a surge of inventory in September and a decline in the number of sales.

Number of Homes Sold

Area	Q1 – Q3 2017	Q1 – Q3 2018	% Change
San Mateo County	4,258	4,132	-2.96%
Atherton	65	52	-20%
Menlo Park	296	290	-2.03%
Portola Valley	49	41	-16.33%
Woodside	47	53	+12.77%

(Source:MLSListings.com)

Average Days on Market

Area	Q1 – Q3 2017	Q1 – Q3 2018	% Change
San Mateo County	22	18	Down
Atherton	48	52	Up
Menlo Park	27	19	Down
Portola Valley	29	30	Up
Woodside	47	65	Up

(Source:MLSListings.com)

Median Sales Price

Area	Q1 – Q3 2017	Q1 – Q3 2018	% Change
San Mateo County	$1,215,000	$1,400,000	+15.22%
Atherton	$4,800,000	$6,625,000	+38.02%*
Menlo Park	$2,050,000	$2,300,000	+12.20%
Portola Valley	$2,900,000	$3,125,515	+7.78%
Woodside	$2,400,000	$3,125,000	+30.20%**

(Source:MLSListings.com)

*  Atherton has posted 15 sales over $10 million in 2018, including 4 at $20+ million.  In 2017, for the same period, there were 9 sales over $10 million and none above $20 million.
** Woodside posted 7 sales under $2 million during the first 3 quarters of 2018, compared to 22 for the same period in 2017.

San Mateo County: Months of Inventory/Number of Sales

Like Santa Clara County, the Months of Inventory is up and the Number of Sales is declining.  The number of sales shown by the yellow line has been declining since May while Months of Inventory (the blue bar) rose to the highest level since January 2017.

Menlo Park: Months of Inventory/Sales

Consistent with other communities, inventory rose in September compared to the number of sales.

 

Mood of the Market

There is no question that the sense of urgency that fueled the spring market has lessened.  Earlier in the year when holding open houses, prospective buyers would ask about disclosure packets and offer dates.  Now when holding open houses the most common question seems to be about how long the home has been on the market.  Some homes are still selling in multiple offers, but in our experience, the number of offers is down, and multiple offers are no longer the norm.

For buyers, we think this represents a great time to purchase a home because you may not need to compete and pay a premium for a home.  For sellers, this is still a good time to sell a home, but the list price must be realistic and take into consideration market conditions.

Important Ballot Initiative – Proposition 5

Earlier this year we alerted you to the Property Tax Fairness Initiative that is on the ballot as Proposition 5 in the November election.

In 1986 California voters passed Proposition 60 which permits people over 55 years of age to sell one home and buy another of equal or lesser value within the same county and transfer their original Proposition 13 tax basis with them. In 2006 Proposition 90 was adopted, allowing homeowners who are 55 years of age or older to transfer their property tax base from one county to another, providing the new county allows such a transfer, and as long as the replacement residence costs the same or less than the home being sold.  There are just ten counties allowing this transfer.

In our area, many seniors feel locked into their current residences because they have very limited options available to them at prices that would allow them to purchase at the same or lower price point and transfer their property tax base. To learn more about current requirements please refer to our prior blog posts, Transfer of Property Tax Base to New Residence and Transferring your Property Tax Base to a Different County.

Under Proposition 5, homeowners who are 55 years of age or older, and persons who are disabled or victims of natural disasters would be able to purchase homes in all 58 California counties, and would be eligible to transfer the property tax assessment of their original home, in addition to an adjustment consisting of the difference in value between the sale price of the original home and the sale price of the new home.

The election is on Tuesday, November 6, and we hope that you will support this measure.

Thank You!

We have had a busy year in real estate and we want to thank you for your support of our business. We are grateful for your referrals to family members, friends, and colleagues.  We love hearing from you and are always here to help you resolve your home-related questions.

State-of-the-art real estate…….State-of-the-heart relationships!