The "Stanford Circle" Real Estate Market

The number of active residential listings on the market is slightly higher than at any other time in the past 2 years. 

The number of listings going into contract has continued to tick up. The August decline was probably due to the terrible fires which started in mid-month. 

In the following 3 charts, several high-price cities in San Mateo and Santa Clara Counties outside the "Stanford Circle" have been included, simply to add further context to the greater market for very expensive homes. 

The table below compares Q3 statistics across 4 years.

Q3, summer, typically sees a slowdown from the more heated selling season of Q2, spring, but the pandemic flipped seasonal market trends upside down. 

Across the Bay Area, the average size of houses sold has jumped, which is a factor in increasing median sales prices. Affluent and very affluent buyers have made up a significantly increasing percentage of the demand, especially during the rebound from the pandemic's initial effect on markets. On average, buyers are purchasing larger houses in more expensive communities. 

Annual percentage changes in median house sales price: The 2020 YTD percentage will almost certainly change, one way or another, by the time full-year sales data is in. 

Changes in median sales price and median dollar per square foot values do not always correlate exactly. For example, all things being equal - which they rarely are - a larger house will sell for a higher price, of course, but a lower dollar per square foot value. 

Median sales prices can sometimes fluctuate without great relation to changes in fair market value, especially in very expensive markets with relatively few sales across a very wide range of sales prices. 

Sales of the highest priced homes have soared in most markets around the Bay Area and adjacent counties. Which doesn't mean that they all sell at whatever prices sellers hope for. The Stanford Circle market is the most expensive in the Bay Area. 

In September, we also updated our semi-annual Survey of Bay Area Markets.  

Focusing on Palo Alto, Los Altos, Los Altos Hills, Menlo Park, Atherton, Woodside & Portola Valley 

Surprisingly, the terrible fires did not significantly impact the number of deals being made in most Bay Area counties during the last 2 weeks of August - the exceptions being Santa Cruz, Sonoma, Monterey and Napa Counties, which saw declines of 13% to 33%. In the Stanford Circle, the numbers of listings going into contract in the second week of August (before the fire) and in the fourth week (deep in crisis) were virtually the same. And activity has actually jumped up in the first week of September. (This chart looks at week by week activity in the Bay Area.) 

Bay Area median house sales prices: Of larger regional markets, the Stanford Circle is by far the most expensive in the Bay Area. 

A breakdown of house sales by home size: 

A breakdown of house sales by lot size: Lot size often plays a significant role in home values in the region. Some of the most expensive communities are known for larger lot sizes. 

Bay Area luxury home markets: Year-over-year summer sales volumes and percentage changes. Broken out as a separate market, the Stanford Circle of cities saw a substantial 43% Y-o-Y increase in sales, but some county markets, such as Sonoma, saw stupendous jumps. (Generally speaking, more rural markets have seen the largest increases in demand since the pandemic hit.)

The next 3 charts look at year-over-year monthly trends in the numbers of active listings, listings accepting offers, and closed sales. Typically, spring is the very active season with a slowdown following in summer, but the pandemic changed that dynamic in 2020. 

These final 2 charts put Stanford Circle cities into the greater peninsula/Silicon Valley context of their respective county markets. 

This table ranks each county (and the Stanford Circle market) by the percentage of active listings going into contract in June/July 2020 - a standard statistic of market heat - compares it to the same period of last year, and then rates the year-over-year change. The overall Stanford Circle market has become substantially stronger year-over-year.