The mid peninsula market is driven by job growth and limited land. More to the point, in order for new construction to take place it is typically necessary to tear down an existing structure. This makes new construction expensive. As the demand for housing continues with job growth and population growth our limited supply of land will continue to be impacted .
It is important to know what activity is taking place in all the local "micro markets." For example, the average sales price in San Mateo County during the month of May was $1,195.000. Statistics indicate 5.2 months of unsold inventory. The City of Menlo Park had an average sales price of $1,504,000 and 2.9 months of unsold inventory. Breaking down the numbers even furthur, one would need to look at individual market data for various neighborhoods e.g. The Willows, Allied Arts, West Menlo, etc.
Looking back twelve months the average sales price for a home in Menlo Park was $1,458,000 in June 2007. In May 2008, the average sales price was $1,504,000. San Mateo County overall had a bit more of a decline: the average sales price in June 2007 was $1,301,000 while the May 2008 average sales price was $1,195,000. These numbers indicate the importance of understanding each local market.