The beginning of fall is marked by an accelerated pace of sales in Palo Alto. After 64 new listings came to the market in September, the inventory increased to 2.1 months, the highest level since February of 2011.
Reacting to this unexpected influx of inventory, sales activity increased and 44 single family homes went to new owners during October, a 57% jump from the previous month when only 28 homes were sold. Also during the month 52 new contracts were ratified, setting the stage for an even higher number of sales in November.
Notwithstanding the increased supply, prices continued to climb, supported by near record low interest rates. The median price of a single family home reached $1,845,000, a 2% increase from September and a 32% increase comparing with October of last year.
We continue to experience an unusually strong seller’s market in Palo Alto and a recent release of more than 30 new homes by DR Horton did not put a dent in the resale market.
This price pressure may be the real “Facebook Effect.” The rocky IPO did not materialize as a significant factor influencing local real estate sales. But more than 1 billion Facebook shares are set to become available for trading by year's end.
Facebook employees were allowed to start trading 230 million shares on September 31 and roughly 800 million additional shares became eligible to trade on November 14. And while some investors worry about the Facebook shares holding their value, the influx of wealth into the local market is likely to push real estate prices even higher.
This post originally appeared on PaloAltoCal.comMonth-Over-Month
Month, Year Listed Sold Median Price DOM July 2012 55 47 $1,690,000 19 August 2012 38 42 $1,720,000 16 Sept. 2012 64 28 $1,830,000 25 Oct. 2012 53 44 $1,845,000 25
Month, Year Listed Sold Median Price DOM Oct. 2009 47 42 $1,508,000 31 Oct. 2010 38 43 $1,460,000 45 Oct. 2011 28 23 $1,400,000 31 Oct. 2012 53 44 $1,845,000 25