Palo Alto sellers continued to benefit from low inventory levels during the second quarter.

The supply of homes on the market in North Palo Alto was down 26% from the same period in 2012 and up a bit from Q1.  Median prices rose substantially, but these numbers must be looked at carefully.  With very low volume, the “mix” has a huge impact on the median.  Look at Professorville, for example – there was only one sale of a $5.5 million dollar home, skewing the median to that number.  Likewise, the days on market was adversely affected in Palo Alto Hills and Community Center by 3 homes that had been on the market for extended periods.  In the Hills, there were only 3 sales with DOM’s of 2, 7, and 180 days.  The 66 day average is not necessarily a representation of the marketplace.

Homes in the $3 million plus range are selling more slowly, giving buyers in this price range a window of opportunity this summer.  It is unlikely to continue, though, unless fundamentals change (interest rates go up significantly or the economic recovery stumbles) or substantially more homeowners realize that this is a terrific time to sell.

Most of the neighborhoods south of Oregon Expressway also rose substantially.  In Barron Park, the median was up 31% and DOM was a quick 15 days.  There were large numbers of offers on properties under $2 million.   Time on the market was an amazing 11 days, down from an average of 17 days on market over the previous year.  Buyers are clearly still in the market and making decisions quickly!