This post was contributed by a community member. The views expressed here are the author's own.

Community Corner

Palo Alto Housing Market Surging

New report confirms it's time to sell in Palo Alto.

Palo Alto has returned to a true seller’s market and beckons for homeowners to put their houses on the market now, according Dreyful Properties report.

The "Palo Alto Market Report," released last week for the second quarter of 2011, found the average home price in Palo Alto has risen from $1.68 million to $1.81 million, a 7.7% increase, since the second quarter of 2010. The median sale price, which is a less-skewed statistic, shows a 6.9% increase since one year ago.

For all of 2011, the Palo Alto market has been heating up. As of May 2011, units under contract were up 60% since May 2010, according to a Dreyfus Properties Supply and Demand information sheet.

Find out what's happening in Palo Altowith free, real-time updates from Patch.

Dreyfus Properties realtor Susan Tanner said now is a good time to sell, rather than wait. “There is currently less competition from other sellers,” Tanner said. “[And] interest rates are still really, really low.”

“We’re just seeing so many people move into the area right now,” Tanner said. With the economy picking up, start-ups getting funded, and companies hiring again, Palo Alto has more buyers than houses for sale.

Find out what's happening in Palo Altowith free, real-time updates from Patch.

Tanner discouraged waiting to sell due to uncertainties in the housing industry. “All we know is that right now it’s a really great market… and a really great time to sell,” she said.

Despite these positives, Tanner hasn't seen quite the commensurate rise in sales, however.

“I think a lot of people keep hearing about [potential] IPOs [and are therefore waiting to sell],” Tanner said. She also thinks that the bad national market contributes to the lack of inclination of Palo Altans to put their houses on the market. Homeowners assume that national it also must be in Palo Alto, thus they are tending to refrain from putting their houses on the market.

Since the first quarter, Palo Alto’s market has, as expected, continued to sky-rocket. In the first quarter, days supply (an indicator of how quickly inventory is moving) was at 86 days for Palo Alto. This quarter it is at 35. The “normal” days supply is 90 for the country, but Palo Alto’s “normal” days supply has always been a bit lower, according to Tanner.

Almost all of the individual neighborhoods have shifted from either neutral or buyer’s markets in the first quarter of the year to seller’s markets in the second. Only the neighborhoods of Ventura and Palo Alto Hills are buyer’s markets, according to the report.

Even Palo Alto rentals are starting to get overbid, which “really shows you there are a lot of people moving in,” Tanner said. She also says it can be a sign that Palo Alto real estate is becoming too expensive for many buyers. Tanner thinks this is short term thinking, though, because interest rates are still so low. She predicts that if the rental market continues to increase, it might drive people back to the buying market.

“The main message I want to get across is that … I think it’s still a good time to be a buyer, … but it’s also a good time to be a seller.” Tanner said. “We know it’s a good time to be a seller.”

We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?