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Elena Talis' Blog

By Elena Talis | Broker in Palo Alto, CA

Palo Alto March Real Estate Madness

March of 2012 was nothing like March of last year!  The number of single family homes sold year-over-year fell from 45 units to 40, but not due to a lack of buyer interest.  From our buyer clients we sense a tremendous feel of urgency to get into a house before the market will price them out of Palo Alto and the surrounding cities.

Real estate market statistics confirm this threat.  The selling price per square foot increased from $878 in March of 2011 to $921 this March, the average number of days a house is on the market (DOM) dropped from 21 days to 16 days over the same period of time (see Market Action Report).  The number of homes available for sale dropped from 60 to 32 year-over-year and the selling to list price ratio reached 108.8 percent, the highest number since May of 2005, when it was at 112.7 percent.

The demand for housing is being fueled by the increased levels of economic activity in the area.  A large number of local employers are hiring, with a steady flow of companies setting up shop in Palo Alto and other nearby cities.

GetHired.com, a startup that secured $2M in its first round of funding at the end of April, opened an office in downtown Palo Alto soon after raising capital.  Groupon recently announced plans to hire as many as 100 engineers in Palo Alto, and Ford selected downtown Palo Alto as the location of its first West Coast research facility.

With the Palo Alto unemployment rate at 4.7 percent in February, it’s no surprise that housing can’t keep up with the demand.

Meanwhile, sellers are holding back — 53 single family homes were listed this month while 84 were listed in March of 2011.  The shortage of inventory that we noticed during the summer of 2011 continues and prices are being driven up.

Multiple offer situations and all-cash offers have become a common occurrence.  The median price of a single family home in Palo Alto reached $1,680,000, a 36 percent jump from the last market bottom in March of 2009.  Continued near-record low interest rates provide additional support for the market upswing.


Month-Over-Month



Month, YearListedSoldMedian PriceDOM
Dec. 2011820$1,480,00030
January 20123620$1,515,00035
February 20124224$1,950,00029
March 20125340$1,680,00016





Year-Over-Year



Month, YearListedSoldMedian PriceDOM
March 20096324$1,230,00035
March 20105128$1,410,00060
March 20118445$1,590,00021
March 20125340$1,680,00016

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