Palo Alto: Month in Review - June (July 9, 2010)

In June, the number of home sales in Palo Alto dropped 23% compared with May and June inventory reached 108 single family homes.

Back in December of last year we were working with buyers who were looking for a 3- or 4-bedroom house in Palo Alto and were relatively flexible with their selection criteria. At that time we struggled to find anything to show them, as inventory was severely limited. Although we eventually found these buyers a house that matched their needs, it was certainly a challenge. June buyers this year had a much better selection of houses to choose from. Nonetheless, they still had to contend with multiple offers.

Some positive news about the market: interest rates are hitting record lows and allowing buyers to pay more for houses. According to FreeRateUpdate.com 30-yr fixed mortgage rates reached 4.25% for well-qualified consumers paying a standard .07 to 1 point origination fee at the end of June. Further, the unemployment rate went down in May, which may have supported a strong June market. Santa Clara’s unemployment rate was reported at 11% in May—a 0.7% drop from the previous month.

The median price of a Palo Alto house in June climbed up to $1,650,000. This is higher than the previous high of $1,605,000 in 2008. Average days on the market increased to 42 days—we saw many sales of homes that had been sitting on the market for a while. The longest time on the market for a house sold in June was 190 days. Out of 39 houses sold in Palo Alto in June, 17 were sold at or above the asking price.

At the end of June, 48 homes were in a ‘Sale Pending’ state, setting the scene for an active July.

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