Altos Research Real Estate Insights

tell us that sales are dropping. (the headlines are right, by the way)

It also turns out, however, that prices have continued to climb this year. In the California and Washington markets we measure, prices have generally advanced 5-10% in the past year.

Sales are down, prices are up? How can this be?

In general, I think we can attribute the phenomenon to two factors:

1. Sales were abnormally high last year. So now with a little less competition, it seems that buyers are able to be selective. Cherry picking the best properties. The best properties get premium prices.
2. Interest rates, despite their recent climb are still so low that buyers can squeeze themselves into payments. Add this to strong economy, job and salary growth and you still have a lot of bullish factors pushing prices.

I've been a little remiss in posting lately. Trying to build a company and all that...

Meanwhile, we're keeping a vigilant eye on that Bubble thing. So far, no evidence of a burst, but interesting trends extending from late last year. Let's use Palo Alto to examine. Here are the last 18 months or so of median home prices in Palo Alto: