Carol Carnevale • DRE# 00946687 • 650.465.5958
Nicole Aron • DRE# 00952657 • 650.740.7954
Over the next few days we will be posting our Annual Report for communities where we work. Before getting into the community news we’d like to share news from our real estate team and our 2020 outlook.
We joined Compass in January 2019 and it’s been an exciting year for us. Our decision to change real estate brokers was based on our belief that we would be supported in a way that would allow us to focus on our clients and deliver an enhanced client experience. As we mark our one-year anniversary we are confident that our move has benefited our clients. Here are just a few highlights:
Our personal goal has always been to place our focus on our clients and to deliver an unmatched level of service. We are delighted to be at a company where our values are perfectly aligned!
The Bay Area housing outlook for 2020 is mixed. There is general agreement that the first half of the year will be healthy based on policies that are not expected to change such as continued low-interest rates and continued strong stock market performance. The second half of the year is expected to be more challenging, as the presidential election and political polarization are likely to be distractions.
Housing affordability remains a concern. The 2018 changes in the tax law limit the amount of itemized deductions for state and local taxes (SALT) to $10,000 and this has effectively increased the “after-tax” cost of owning a home. In addition, the legislation caps mortgage interest deductibility to loan amounts of $750,000. The previous cap was $1,000,000.
The year is off to a great start, and we have a great line-up of new listings that we will be introducing during the next several months.
2019 Market Review
The number of Single Family Residential (SFR) sales reported to the Multiple Listing Service in 2019 decreased from 347 in 2018 to 332 in 2019. The high sale for 2019 was $14,000,000, for a 4,915 sq. ft. home built in 2011 and sited on a 10,000 sq. ft. lot. (Source: Old Republic Title Company)
While the market remains healthy, indicators point to softening trends:
Number of Homes Sold
For the 4th consecutive year, the number of homes sold decreased. The number of homes sold in 2019 was 332, down from 347 in 2018. The graph below shows the number of sales by quarter and, consistent with prior years, more homes sold during the second quarter of the year.
Sales by Price Range
Softer market conditions were most apparent for homes priced above $5 million. In 2019, 33 sales at $5+ million were reported to the MLS, compared to 50 in 2018 and 46 in 2017.
The past year was also quieter for the very high-end market segment. The chart below shows sales of homes at $9+ million, and includes homes sold “off-MLS”.
|YEAR||NUMBER OF SALES||HIGH SALE|
(Source: Old Republic Title Company)
Sale Price to List Price Ratio
For 2019 the annual Sale Price to List Price Ratio decreased to 102.6% down from 108.3% in 2018.
Rarely in Palo Alto’s strong-performing real estate market have sellers needed to reduce list prices in order to get their homes sold, but beginning in June 2019 some homeowners needed to adjust their prices prior to buyers responding. The red line on the graph below shows the Sale Price to Original List Price Ratio while the blue line shows the ratio of the Sale Price to List Price at the time of sale.
Median Sale Price
The Median Sale Price for single-family homes declined to $3,077,500 in 2019, down from $3,200,000 in 2018.
10 YEARS AGO
The start of a new decade seems like a good time to look back at market trends 10 years ago.
|# of Homes Sold||394||332|
|Median Sale Price||$1,320,000||$3,077,500|
|Days on Market||48||30|
|Sale Price to List Price Ratio||98.5%||102.6%|
Palo Alto is a wonderful community to call “home,” and while the market in 2019 was softer, homeowners there continue to benefit from a long-term strong real estate market.
We will be posting our other community reports over the next few days.
Please do not hesitate to contact us if you would like further information about the market or are in need of professional real estate service.