Palo Alto Housing Market Update | Prices Dropped For The Second Month | September 2022
August followed the typical seasonal trends and was one of the slowest months in terms of the housing market activity – only 39 homes sold in Palo Alto, a 33% decline compared with the August of last year. August is a low activity month because it is the end of the vacation season. Both parents and kids are coming back from a summer break and are getting ready to go back to work.
August median home sale price was $3,250,000, a .76% decline year-over-year, less than 1% decrease. It was the second month in a row when home sale prices declined compared with the same time of the last year. And even though the prices declined, out of 39 homes that changed hands, 17 homes still sold above the asking price. The overbids and price reductions were evenly distributed in all segments of the market. For example, the most expensive August sale was in Old Palo Alto on Santa Rita Ave. This home was listed for just under $8M and sold for exactly $10M, a 25% increase of the sale price over the list price.
The market is still a seller’s market with inventory standing at 2.2 months (3 to 4 months of inventory is considered to be a balanced market here in the Bay Area). Average time to sell a home was 17 days in August, down from 27 days in July indicating an increase in the buyers demand and competition. Overall, median home sale price year-to-date is up by 2.4% over the 2021 levels and stands at $3.3M.
The home sale price decline compared with the peak prices and peak demand of March, April, May, created an opportunity for the buyers who were hesitant to enter the market. Despite the higher interest rates and instabilities in the stock market, the number of new contracts in August jumped up to 50, a 47% increase compared with July of this year.
These market conditions are ideal for people who want to move up, people who want to sell their current home and buy a new, bigger one. Think about it – even if your home “lost value” compared with all-time highs back in the spring of this year, your new home price also declined. Your savings on the purchase of the new home will exceed all potential losses on the sale of your old home.