The San Francisco mid peninsula real estate market continues to have a short supply of houses for sale, especially in the mid price range ($1-2 million for single family residences [SFR], $750k – $1mm [CID] for condos and townhouses). A simple way to compare the activity and supply dynamics is to look at the Ratio of Active to Pending Listings [RAPL*] Palo Alto has the shortest supply in both categories at 0.5 for single family and 0.7 for condos. Redwood Shores had the next lowest RAPL for single family homes at 1.0. Los Altos Hills has the highest RAPL at 4.8.
Take a look at the charts for a complete picture.
Ratio of Active to Pending Listings – SF Mid Pen – By Price
Ratio of Active to Pending Listings – SF Mid Pen South
Ratio of Active to Pending Listings – SF Mid Peninsula North
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*RAPL. The Ratio of Active to Pending Listings measures the relative supply of houses (listings that are active, available for sale and are awaiting an offer) to listings that have been sold but have not yet closed escrow. The pending listings include houses that have been sold subject to a buyer contingency as well as those where contingencies have been removed and the buyer is truly committed to the sale. A high ratio indicates that supply of houses available is high relative to demand. In many parts of the U.S. it is common for this ratio to be above 6. In a way this ratio is a substitute for another commonly used statistic, the number of days of inventory. If the average escrow period were 30 days then an RAPL of 1.0 would indicate a 30 day inventory since the pending listings would represent a 30 day supply of sales. In a very competitive market like ours we often see shorter escrows which would indicate that a ratio of 1.0 would mean a shorter period of sales. In markets that are sluggish, longer escrows are common so that a ratio of 6.0, for example, might mean more than a 6 month supply. Nonetheless, the ease of calculation and ready availability of the data argue for using this simple RAPL measure.
