The big difference this year compared to 2020 is a newly energized pool of homeowners more amenable to putting their homes on the market, local agents said.
"It has been, and will continue to be, an active market," said Leannah Hunt, a Palo Alto-based Realtor with Sereno. "We anticipate lots of new listings this fall, with ambitious sellers and highly anticipatory buyers."
Hunt points to a 23% increase in the number of homes put up for sale in Palo Alto this past August, compared to the same month in 2020. That was accompanied by a 20% increase in the median sale price of homes in the city between the same months.
"It's called the Stanford (University) effect," said Brett Caviness, a Menlo Park-based real estate agent with The Caviness Group affiliated with Compass Real Estate. He's also president-elect of the Silicon Valley Association of Realtors. "The demand for housing is so high there."
And it seems to have a spillover effect in nearby cities, though Caviness says local prices peaked in June. In neighboring Menlo Park, the average sale price for a home grew by 15% between June 2020 and June 2021.In Los Altos, he said, the average sale price increased from $3.6 million to $4.2 million.
Caviness said he anticipates continued robust sales this fall for the area's larger properties that have price tags north of $6 million.
Ever since the COVID-19 pandemic burst grimly onto the world stage in March 2020, affluent buyers from throughout the Bay Area and beyond have been snapping up large homes with ample space — indoors and out — in semi-rural enclaves like Los Altos Hills, Woodside and Portola Valley.
Caviness said in August 2020, there were 25 properties priced at $6 million or above that sold in San Mateo and Santa Clara counties. This past June, 41 homes along the Peninsula and south bay sold in that category.
"There is a huge demand," he said.
"We do have an active market this fall among both sellers and buyers," said Denise Welsh, Los Altos-based Broker Associate for Compass Real Estate. "As long as interest rates remain low, it will be an active fall. There is still a very high demand for housing."
Compared to the red-hot spring market, however, Hunt said multiple offers on particularly popular properties have cooled off a bit more recently.
Also unlike last year — when the pandemic spurred high demand for large houses surrounded by lots of property — Welsh said she has seen more buyers seeking shorter commutes once again as people increasingly return to their workplaces. First-time buyers are also spurring more interest in the lower-priced end of the market, including condos and townhouses — a fairly cool market category last year.
"We do have buyers who are anxious this year to get into neighborhoods (close to their workplaces) in Palo Alto, Los Altos and Mountain View," she said.
Those employers are part of the ever-resilient local economy that provides the biggest stimulus for the Midpeninsula housing market, Welsh added.
"The incredibly exciting economy of Silicon Valley — that is the single-most dynamic force for housing in this area," she said.
Silicon Valley work styles and affluence also are fueling another pandemic-era dynamic affecting the local premium housing market, according to Michael Repka, CEO, Managing Broker and General Counsel for Palo Alto-based DeLeon Realty.
Top tech-company management personnel, venture capitalists, lawyers, investors and others with homes in the $5 million to $10 million price category are increasingly moving out of the area to places like Lake Tahoe and Las Vegas, he said.
"They're not all retiring, either," Repka said. "You can do a lot of work remotely and hold meetings on Zoom. If they need to periodically return to Silicon Valley, a lot of them can do so on their private planes."
He said this, along with the recent demand for spacious homes with plenty of room for work space, as well as fitness and recreational activities, is likely a contributing factor to the remarkable sales activity in communities like Portola Valley and Los Altos Hills so far this year.
Conversely, Repka said he foresees a cooler market locally for condos and even for some older, modest-sized, single-family homes in centrally located Midpeninsula neighborhoods.
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