It seems that the number of real estate sales in Palo Alto is limited only by the number of homes coming to the market. Both single family homes and condominiums are in short supply, forcing buyers to participate in blind auctions for most of the available properties. Multiple offers are as common as they were at the peak of the housing market in 2008-2009.
Only 44 homes were available for purchase in March of this year, a more than 50 percent drop from 89 new listings a year ago. Since February of 2011, there was consistently less than two months of inventory of homes available for sale and on multiple occasions there was less than one month.
Indeed, the whole Bay Area suffers from a shortage of listings. From Marin County, San Francisco and the Peninsula, down to San Jose and out to parts of the East Bay, the number of homes for sale is down as much as 50 percent from the same time last year. This at a time when the number of well-qualified buyers eager to purchase appears to be higher than it has been in years.
The local economy is on an upswing, fueling housing demand. According to The Wall Street Journal, ten Bay Area companies went public since the beginning of the year. Two of them, Infoblox and Proopoint went public just last Friday, April the 20th, raising $120M and $82M respectively.
At the same time, a number of promising startups were purchased by larger companies, including Facebook’s acquisition of Instagram for $1B and Twitter’s purchase of Posterous.
The real estate recovery is taking hold nationwide. Realtor.com is tracking 146 metro markets and all but two posted a drop in their inventory. Three out of four top performing markets are in California: Oakland reported a 51.91 percent drop in total active listings followed by Bakersfield (50.35 percent drop). Fresno is in the fourth position with a 45.56 percent drop in total active listings.
Nationwide, the number of homes available for sale dropped 26 percent based on the data provided by National Association of Realtors.
Sellers are finally getting the news about the recovery and listings are starting to come in. During the week ending April 21, twenty single family homes and three condominiums were listed in Palo Alto, bringing the total number of properties for sale to 63. This is the highest number since the beginning of the year, when 32 to 44 homes were typically available each week.
I don't expect these homes to stay on the market for long. The average number of days on the market for a Palo Alto house in March was only 18. But the influx of homes is a welcome sign for buyers who want to make Palo Alto their home.