Post - Facebook IPO, how is the market in Palo Alto compared to pre-Facebook IPO?

Asked by Mindy, 94306 Mon Jun 18, 2012

I know that it was crazy before Facebook IPO and my neighborhood home sold with 20 offers, because apparently a lot of buyers were trying to get in before the Facebook IPO.

How has the IPO influenced the market? Is there increased competition? I certainly see a higher inventory. Thanks in advance!

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Juliana Lee’s answer
Juliana Lee, Agent, Palo Alto, CA
Mon Nov 19, 2012
Looking back at this spring and summer, and now fall ... talking with buyers, the spring increase in the number of houses seemed to come later this year than normal. Buyers were definitely feeling competitive pressure when they could find homes they liked.

The number of homes sold during the first quarter of 2012 in Palo Alto was the lowest it has been since 1998. The number of homes sold during the second and third quarters of 2012 were comparable to the same quarters in 2010 and 2011.
http://julianalee.com/palo-alto/palo-alto-statistics.htm

Home sales prices climbed dramatically in the first quarter of 2012 and have stayed high. With 40 single family homes listed for sale during the Thanksgiving week, the number of homes offered isn't dramatically different but the listing prices are. The lowest priced home listed is $1.38M. There are only 5 single family houses offered below $1.5M

If you look at sales price vs list price, this year has been another strong year for sellers. If you look at days on market, Palo Alto homes are selling about as quickly as they ever have and aren't showing signs of slowing.

How much of this year's benefits for sellers were due to facebook's IPO? It may well have caused people to delay offering their homes for sale but what stands out is that 418 homes have been sold in 2012 vs 418 homes during the same period in 2011, yet prices climbed dramatically.

Juliana Lee, MBA LLB
cell: 650-857-1000
Top 3 agent nationwide at Keller Williams Realty
Web Reference:  http://julianalee.com
0 votes
Marcy Moyer, Agent, San Ramon, CA
Mon Jun 18, 2012
Mindy,
The biggest change in Palo Alto real estate is in the over 2.5 million price range. These homes are staying on the market longer and not getting multiple offers. The lower priced homes are still selling pretty quickly, but fortunately the Facebook hysteria has calmed down. Facebook has 1000 employees, most of whom are in their 20's and want to live in SF not Palo Alto. Many of the older employees already sold stock in private sales before the IPO. The run up in PA real estate was because of the high employment rate in the area, not because Facebook was going public and in 6-12 months the employees will be able to sell stock and buy homes. The employees of Google, Apple, Linkedin, VMware, etc have much more influence on the Palo Alto market right than Facebook. Several months ago another agent and I were interviewed by CBS on the market and he said it is all Facebook and I said it is the total economy. I have been proven right I believe. Here is the link:
http://sanfrancisco.cbslocal.com/2012/03/14/upcoming-faceboo…
So to sum it up, the inventory is still low, although not as low as before. Pre Facebook IPO there were 30 single family homes on the market and now there are 54. However, the increase in inventory is due to more homes above 2.5 million taking longer to sell as there are more of them coming on the market than there were earlier in the year. This may be due to the capital gains tax going up at least 3.5% in 2013, but that is a whole other issue.
Marcy Moyer
DRE 01191194
Web Reference:  http://www.marcymoyer.com
0 votes
Elena Talis, Broker, Palo Alto, CA
Mon Jun 18, 2012
Hi Mindy,

The inventory is a bit higher but it is consistent with the seasonal fluctuations - see charts at http://paloaltocal.com/palo-alto-real-estate-market-action-r… . What I see is that the prices have stabilized and are not rising like a run-away balloon. Well priced homes still receive multiple offers and, in a lot of cases, well above the asking price. Keep in mind that crazy offer counts a usually triggered by artificially low listing prices

I actually put a house on the market the day before Facebook went public. It sold in 5 days and closed in 3 weeks - very strong buyers. My husband wrote an article about our experience with this house on Palo Alto Patch - http://paloalto.patch.com/blog_posts/day-trading-real-estate .
0 votes
Elena Talis, Broker, Palo Alto, CA
Mon Jun 18, 2012
Hi Mindy,

The inventory is a bit higher but it is consistent with the seasonal fluctuations - see charts at http://paloaltocal.com/palo-alto-real-estate-market-action-r… What I see is that the prices have stabilized and are not rising like a run-away balloon. Well priced homes still receive multiple offers and, in a lot of cases, well above the asking price. Keep in mind that crazy offer counts a usually triggered by artificially low listing prices

I actually put a house on the market the day before Facebook went public. It sold in 5 days and closed in 3 weeks - very strong buyers. My husband wrote an article about our experience with this house on Palo Alto Patch - http://paloalto.patch.com/blog_posts/day-trading-real-estate.
0 votes
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