The median price of sold homes in Cupertino in March was $1,970,000, the highest it has been in more than two years. This is a 21.8% increase over $1,618,000, the median price in March a year ago.This figure has risen consistently since March 2013 but it has yet to surpass the $2 million mark. This year started off in January with a median sold price of $1,705,000 that rose to $1,865,000 in February. Based on current market trends, we can say it’s quite possible for home prices to hit $2 million in the next several months.
Homes selling fast
One indicator that points toward this possibility is the short length of time sold homes are spending on the market here: 15 days in March, 10 in February, and an average of 17.1 days for each of the last 12 months. Buyers are clearly eager to close on Cupertino homes, and a group of highly motivated buyers usually translates into bidding wars in which offers well above the asking prices are the norm.
Fewer properties for sale can also affect the bidding environment and therefore the prices paid for homes. Cupertino’s inventory of homes certainly hasn’t hit bottom, but there has been a definite decrease in the number of available homes in the last 12 months compared to the 12 months previous. Look at the homes inventory in these two periods:
• April 2014-March 2015: 549 homes, 45.8 per month • April 2013-March 2015: 756 homes, 63.0 per month
MSI: months supply of inventory
The months supply of inventory (MSI) statistic gives us a good read on the effects of supply and demand within a market. It tells us how long it would take to completely deplete the current inventory of homes, based on the speed of sales and providing no new homes were listed. The MSI for the U.S. as a whole typically fluctuates between 4.5 and 5.5 months.
In Cupertino in March, the MSI was 0.4, or 12 days. That’s the lowest it’s been in recent memory. In March 2014 it was 0.8, still very low by national standards but double what it was this past March.
Here are the same two time periods as above, showing the monthly average MSI:
• April 2014-March 2015: 0.86 • April 2013-March 2014: 1.34
For these and other reasons, don’t be surprised to see Cupertino homes to break into the $2 million zone soon.