Los Altos median home sale price rises 4% for first quarter 2024

Infographic courtesy of Alex Wang

Editor’s Note: This article originally appeared in the Los Altos Town Crier

The median home sale price in Los Altos rose 4% for the first quarter of this year compared to the same period in 2023. This is good news, but let’s dive deeper into what that really means. 

What is the median home sale price and how is it different from the average home sale price?
And what do these numbers tell us about a given real estate market? How, if at all, should you consider the median and average sale price in the pricing of your own home? 

The chart included here shows the median and average home sales prices in Los Altos for the first quarter of 2024 compared with the same period last year. If you are putting your home on the market this spring, consulting the MLS for median and average selling price in your community last spring should offer some insight – though be aware that this data alone should not be all you use to set your asking price. These numbers are merely meant to give us a snapshot of the market and a quick pulse on trends. Comparing one time period to the same period one year ago, or what is sometimes termed YoY (year over year), is how we get the data to be “apples to apples.” 

It’s important to be reminded these terms are not interchangeable.
Median sales price is simply the middle sales price in a list of home prices. It tells you what number (the median) was representative of the homes sold in a given period, so if you sold at that time you can use it as a gauge for how well you did compared to others also selling at that time. When there’s an odd number of sales, your median price is that selling price that leaves as many prices above it as below it (in a list of seven home prices, it’s the fourth one, whether you compile your list from most to least expensive or the other way around). If you have an even number of selling prices, take the two middle numbers, combine them, and divide by two to get the median selling price in that list.  

Then there is the average home sales price. To arrive at this number you add up all the selling prices in your list and divide by the number of homes on the list. 

OK, so with these terms clarified a bit, what do they mean?  
I pulled this data for the quarter that ended March 31 on April 5, because it can take realtors and the MLS, on whom we rely for this data, a few days to record final closing prices. As you can see, median selling prices have gone up in Los Altos (4%) but down in Mountain View (-3%). As a whole, median home prices in Santa Clara County are up 7% year over year for the first quarter.  

Data as a benchmark
When looking at median and average selling prices within a market, it’s important to remind ourselves that we’re looking at what happened in a given time and place for a group of homes, not for any home in particular. As such, if you bought or sold a home during that time, median and average selling price are tools to gauge how well you did against the set of inventory (aka other homes) that also sold during that time. If you are buying or selling a home, recent data snapshots like these should give you some sense of how things are trending and therefore what kind of market you’re heading into.   

A closer look 
As we can see, the median sales price for Los Altos for the first quarter of 2023 was $4,030,000. But I have a story to tell you there. During that period one home sold for more than $13 million – it was a real outlier, not something we’ll see again soon. The point is, if we use it to figure the median selling price it only lifts the number slightly, but if we use it to calculate the average selling price it will artificially skew our results quite a bit. If you look at the trendline for average (vs. median) selling price in Los Altos year over year, it shows a decline of 4%. That’s because that one astronomically high price of $13 million hiked the average selling price in Q1 2023 and it was not replicated in 2024. In this case, the median sales price is more representative of the market.   

Inventory is usually at its tightest in the winter months and right after the holidays, yet clearly, sellers in the first quarter this year enjoyed a higher average selling price in Los Altos Hills (10%) and Mountain View (6%), though they fared a bit worse (down 4%) in Los Altos. The other valuable metric here is comparing our local communities to the larger Santa Clara Valley as a whole. 

Los Altos vs. the County
The key takeaway is that all market data can be used to generally gauge the health and trendlines of that market, but they never tell the whole story. We need anecdotal data too, such as the insight from realtors whose feet were on the ground in those times and places. The chart shows that overall the Santa Clara Valley saw 7% growth in median and 10% growth in average selling price in the past year, while Los Altos didn’t gain as much. But that doesn’t mean ours is not a healthy market; it’s just a reflection of how our higher prices compared with other communities don’t give us as much headroom to rise; also we can be glad Santa Clara County is showing healthy growth because that is where many of the employers who define our economy are based.   

When it comes to pricing your own home, the data is helpful but there are several other factors to consider. So while data can be a guide, it’s no predictor of the future. In my next column, I will dive more deeply into the most important factors that determine the value of a home.