The Year of the Pig had a very slow start in our local real estate market. So far, we haven't experienced anything remotely similar to the usual spring frenzy.
For the first quarter of 2019, we had 148 new listings similar to the 143 new listings during the same period of last year. Among the 148 new listings so far this year, especially at the very beginning of the year, many were actually "leftovers" from last year, i.e. those houses that could not sell at the end of last year thus relisted this year. Overall, the fresh new inventory has been especially limited.
Weather definitely played a role in this soft market. The continuous rain delayed home preparation, hindered marketing activities and reduced open-house traffic. Some of the fresh new inventory has probably been sitting in the pipeline waiting for a sunny weekend that was rare in the past months.
The lack of high-priced home sales is another factor that contributed to the lower median price and lower total transaction volume. The most expensive home sold during the first quarter of last year was more than $13 million, and more than 10 homes sold for above $5 million. So far this year, $6.8 million was the most expensive home sold, and that's the only one over $5 million. The overall soft market gives sellers with expensive homes motivation to consider off-market selling more seriously. If mass marketing is unlikely to generate good results, tailored marketing may be more effective. In fact, I represented a buyer who found their dream home in Crescent Park off-market at the high-end segment.
However, even in a relatively slow spring market, there were still homes with multiple offers that sold within a week. In fact, the entry level to Palo Alto, the $3-million segment, has started to show more activities since March. My listing of an old home in a great spot in Midtown with decent 7,200-square-foot lot listed in the mid $2-millions attracted six offers. This reflects another interesting aspect of this spring market: The number of offers does not necessarily translate to the amount of overbidding that our real estate professionals are used to. For instance, six to seven offers in a hot market can easily lead to 20% overbidding, while we only see around 10% these days. In other words, buyers seemed to be more disciplined.
With the weather finally clear, we may see some new inventory. If interest rates keep coming down and there's no additional turbulence of the global economy, the spring market may make a belated fresh start. The biggest variables that could affect our local property market down the road are those well-anticipated IPOs, including Uber, Airbnb, Pinterest and Lyft. IPOs tend to create new wealth and demands on housing, especially in desirable neighborhoods like Palo Alto. The potential demand has actually already given current active buyers a push, as some of them figured that the window to shop around wouldn't be open too long. Some of the potential sellers also have considered delaying the release their homes to ther market until fall to capture the IPO wealth. However, stock performance is never one way. What if those IPOs don't do well? It would then hurt sentiment and general confidence in the Silicon Valley economy. Housing prices may then start to dive into a real downturn.
Xin Jiang is a real estate agent with Alain Pinel Realtors in Palo Alto. She can be emailed at firstname.lastname@example.org.