Palo Alto has always been fashion-forward when it comes to real estate trends. Having worked in residential real estate in this area for 8 years, I have found that the Palo Alto housing market serves as a compass when it comes to trying to predict the next real estate pattern. Over time the neighboring cities, Menlo Park, Los Altos, Redwood City and San Carlos, will often mirror the market ebbs and flows experienced in Palo Alto.
Across the Bay Area, overpricing leads to much lower sales-price-to-original-list-price percentages and much longer days on market (of course), but also an approximate 5% - 9% drop in the average dollar per square foot value. (Which doesn't include expired/withdrawn listings that don't sell at all.) These numbers are generalities: details will vary between listings - price segment, how much they're overpriced, how soon and how much they reduce their prices.
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Executive Summary:
IPO expectations are already showing up in home sales activity, particularly in San Francisco and San Mateo
Sales of homes in San Francisco, San Mateo and Alameda have solidly exceeded last year – up 7 percent, 4 percent and 2 percent respectively year-over-year in April
Santa Clara, Wine Country and Contra Costa remain slower compared to last year
Homes priced between $1 million and $2 million continue to struggle, except in San Francisco and San Mateo, likely a result of tax reform changes and reduced state and local tax (SALT) and mortgage interest deductions
Nevertheless, sales of homes priced above $3 million have surged again, posting a 5 percent year-over-year increase, matching last year’s peaks
While growth in inventory of homes for sales is broad based, availability of homes priced above $3 million accelerated again to a 26 percent annual growth in April
While price growth remains flat in most regions, San Francisco median prices up 2 percent year-over-year in April
A 9 percent annual increase in homes under contract suggests buyers are back in droves, especially for homes priced over $3 million, up 44 percent year-over-year
A Goldilocks Economy is an economy that is neither too hot or cold, in other words, it sustains moderate economic growth and has low inflation, which allows a market-friendly monetary policy.
· Today’s national employment report from the U.S. Bureau of Labor Statistics once again outpaced expectations by posting a 263,000 increase in jobs added in April. The strong gain adds to the upward revisions of the two previous months, bringing the year-to-date monthly average to 205,000 jobs added, only slightly below the 223,000-monthly average in 2018.
U.S. home prices are expected to increase by 4.8 percent year over year by November 2019.
November home prices were up on an annual basis in the San Francisco and Los Angeles metropolitan areas by a respective 5.9 percent and 5.3 percent.
Prices appreciation for new homes is projected to slow in 2019 in all four major Bay Area housing markets, while new-home prices in Los Angeles are forecast to begin depreciating.
