Looking back, 2015 turned out to be another strong year overall for our local real estate markets, especially for home sellers.
The Bay Area housing market experienced good appreciation in home prices in many areas, although some home values did come back to earth a bit as the year wore on. The median sales price in the Bay Area through October reached $710,000, up 9 percent in 2015 from last year, according to local MLS data analyzed by Coldwell Banker.
MEDIAN SALES PRICE COMPARISON
Year-to-date 2015 | Year-to-date 2014 | Percent change | ||
Portola Valley | $2,640,000 | $2,437,500 | 8.31% | |
Woodside | $2,537,500 | $2,150,000 | 18.02% | |
Atherton | $5,750,000 | $4,200,000 | 36.9% | |
Menlo Park | $1,930,000 | $1,640,000 | 17.68% | |
Palo Alto | $2,500,000 | $2,148,100 | 16.38 | |
Los Altos | $2,628,000 | $2,300,00 | 14.26% | |
Los Altos Hills | $3,555,000 | $3,095,000 | 14.86% | |
Strong buyer demand, a vibrant local economy and a continuing decline in the inventory of homes on the market combined to make 2015 another seller's market here in the Bay Area. Healthy job growth, especially in the tech sector, biotech industry, and financial services, fueled demand for homes – everything from entry-level properties to multi-million-dollar estates.
Another factor that helped bolster the housing market was a continuation of attractive mortgage interest rates, which remained near historic lows this year. Although the Federal Reserve is considering a rate hike this month, the California Association of REALTORS® (CAR®) believes that any boost in rates will be relatively small and increase gradually in the coming year.
One of the biggest challenges to the housing market in 2015 was that there were just not enough listings to meet buyer demand. The number of homes for sale in the Bay Area is down 16 percent from November last year, when inventory was already lower than normal.
HOUSING INVENTORY: NUMBER OF NEW LISTINGS
The shortage of listings led to multiple offers and sales over asking price on some properties this year. The limited inventory may also been a contributing factor in keeping a lid on home sales overall in 2015 with sales in the Bay Area up just 2 percent so far this year compared to last year at this time.
SALES COMPARISON: NUMBER OF SALES
Year-to-date 2015 | Year-to-date 2014 | Percent change | ||
Portola Valley | 55 | 81 | -32.1% | |
Woodside | 86 | 96 | -10.42% | |
Atherton | 73 | 94 | -22.34% | |
Menlo Park | 359 | 417 | -13.91% | |
Palo Alto | 385 | 449 | -14.25% | |
Los Altos | 332 | 310 | 7.1% | |
Los Altos Hills | 94 | 84 | 11.9% | |
CAR® Vice President and Chief Economist Leslie Appleton-Young said several key factors came together to create a healthy housing market in 2015, and she expects that will continue in the coming year. "The foundation for California's housing market remains strong, with moderating home prices, signs of credit easing, and the state continuing to lead the nation in economic and job growth," she noted.
If you are considering buying or selling in 2016, let’s talk about next steps now. Whether you are preparing to come on the market or searching for the perfect place to call home, the earlier you start the better - to beat the spring competition.
Happy Holidays to you and your family! I look forward to catching up with you in 2016.