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The November Update

Your guide to real estate in they Bay Area

Real Estate Market Update

Rising Interest Rates Continued to Impact Supply & Demand in October, But Early November Brings Big Shift in Economic Indicators

Throughout the autumn selling season, global conflicts, falling stock markets, and soaring interest rates deterred buyers reliant on financing. Prospective sellers hesitated to abandon their current loan terms. However, shifts occurred in early November as the October jobs report, the Fed's benchmark rate pause extension, and Treasury Department guidance on bond sales led to stock market improvements and near-record declines in interest rates.

The housing market usually slows during the holidays, with listing and sales activity reaching annual lows. Given economic and political volatility, it's premature to predict future developments. Ideally, rates will stabilize, and consumer confidence will recover in the new year, enhancing housing affordability and aiding homeowners contemplating a sale.

Despite the expected holiday slowdown, sellers of appealing, well-prepared, and well-priced homes may still secure quick sales with multiple offers. Qualified buyers remain active, seeking homes with both financing and all-cash offers. For buyers, mid-winter provides reduced competition and opportunities to negotiate prices more aggressively on unsold properties.

This report examines home price trends, new listings, speed of sale, overbidding, listings entering contracts, and sales volumes in the general and luxury real estate markets. It also updates Bay Area home price data, offering insights into current values and market dynamics in various cities, towns, and submarkets within the region.

Notes from The Field

The Palo Alto and Los Altos housing markets have long been synonymous with affluence, highly sought-after properties, and Silicon Valley's elite. However, the past year has seen some interesting shifts in these two neighboring cities. While some aspects have remained stable, others have undergone noticeable changes, bringing both opportunities and challenges to homebuyers and sellers. In this article, we will delve into the key factors that have influenced the real estate landscapes of Palo Alto and Los Altos.

Median Home Prices: One of the most notable changes in both Palo Alto and Los Altos has been a slight decrease in median home prices. Over the past year, these markets have seen a dip of approximately 1.5-3 percent. While these percentages may seem modest, in the context of the region's typically robust price growth, they signal a shift in the market dynamics. This slight decrease in home prices has created a more balanced environment for buyers, making homeownership in these prestigious cities more attainable.
Days on Market: Interestingly, despite the dip in prices, homes in Palo Alto and Los Altos are spending less time on the market. The days on market for pending sales have shortened, suggesting that demand remains strong, and buyers are acting swiftly. This trend reflects the attractiveness of these cities, with their excellent schools, proximity to tech hubs, and quality of life, which continues to draw homebuyers.
Buyer and Seller Sentiment: Buyer and seller sentiment plays a significant role in these shifting markets. Buyers have recognized the opportunity to enter these exclusive markets at a potentially lower price point, while sellers are adapting to the evolving landscape. As a result, we've observed a more active market with a willingness to negotiate on both sides.
Regional Influences: The broader economic landscape has also impacted these real estate markets. Factors like rising interest rates and global economic conditions have contributed to changes in consumer behavior. The recent economic volatility and global conflicts have prompted some buyers to exercise caution, but ultimately, the allure of Palo Alto and Los Altos has endured.

Conclusion: In the dynamic world of real estate, change is the only constant. While the Palo Alto and Los Altos housing markets have seen a slight decrease in median home prices, the overall environment remains favorable for both buyers and sellers. Lower prices, shorter days on market, and the enduring appeal of these cities make this an interesting time to explore real estate opportunities in these thriving communities. As the markets continue to evolve, staying informed and working with a knowledgeable real estate professional becomes essential for making the most of these shifting dynamics.

Read the Report

*Source: Q4 2022 Market Report

November Events Hight Light

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Serena Lo

DRE# 02194326
Realtor®
M: 408.507.3005
serena.lo@compass.com

Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.