How’s the Cupertino real estate market?

Cupertino has been in a buying frenzy for about the last year. Prices are up considerably both year over year and month over month. Home values are now noticeably higher than the previous peak of the market (2007).  So the good news for Cupertino area homeowners is this: all of you should have equity!

Now see the numbers for houses in Cupertino that are for sale or sold in the last month for which we have data on my Real Estate Report for Cupertino:

Trends At a Glance	Feb 2013	Previous Month	Year-over Year
Median Price	$1,392,880	$1,180,000 (+18.0%)	$975,000 (+42.9%)
Average Price	$1,428,410	$1,244,800 (+14.8%)	$1,119,850 (+27.6%)
No. of Sales	16	15 (+6.7%)	17 (-5.9%)
Pending Properties	19	14 (+35.7%)	29 (-34.5%)
Foreclosures Sold	0	0 (N/A)	0 (N/A)
Short Sales Sold	0	0 (N/A)	0 (N/A)
Active Listings	18	14 (+28.6%)	36 (-50.0%)
Active Foreclosures	0	0 (N/A)	1 (-100.0%)
Active Short Sales	0	0 (N/A)	2 (-100.0%)
Sales Price vs. List Price	106.3%	105.5% (+0.8%)	99.5% (+6.9%)
Days on Market	18	28 (-36.1%)	42 (-57.7%)

The sale price to list price ratio in Cupertino is stratospheric at 106.3%.  I looked on the MLS (using the stats feature) back to Jan 2004 and only once was this figure bettered, and that was in February 2005 – just prior to the peak.  This is a clue that people should heed about how overheated the market is.  Figures for this area are even more striking if we consider less expensive areas with Cupertino schools, such as parts of San Jose and Sunnyvale.  Allow me to show you in the charts below:

First, houses in the City of Cupertino – average days on market, average sales price to list price ratio (over 106%).

Next, “area 18″ – the Cupertino area, which includes parts of San Jose (so less expensive), same type of data:

Please notice that with this second chart, the sale price to list price ratio is not 106%, but 108.8%!!!!  At NO time in since Jan 2004 was there a sale price to list price ratio this high. Closest in the pre 2013 years was Feb 2005, the previous extreme high of 108% (even) – and this one’s got it beat by almost one more point. It’s long, but I’m going to copy and paste this datafrom MLSListings so that you can see how out of place this ratio is – and again, that I consider it a warning sign that we are in dangerous territory.  I will make bold every month with a SP to LP ratio of 105% or more:

Month	Sale Price to List Price Ratio	Average Days to Sell
Jan 2004	100.2%	35
Feb 2004	101.8%	34
Mar 2004	102.3%	22
Apr 2004	102.4%	17
May 2004	102.1%	23
Jun 2004	101.7%	29
Jul 2004	101.7%	27
Aug 2004	101.0%	27
Sep 2004	101.6%	35
Oct 2004	101.0%	27
Nov 2004	102.5%	26
Dec 2004	102.8%	26
Jan 2005	105.5%	15
Feb 2005	108.0%	26
Mar 2005	106.8%	16
Apr 2005	106.2%	14
May 2005	105.4%	18
Jun 2005	104.3%	29
Jul 2005	101.2%	28
Aug 2005	101.8%	26
Sep 2005	100.1%	40
Oct 2005	99.5%	25
Nov 2005	100.9%	25
Dec 2005	100.2%	40
Jan 2006	99.8%	42
Feb 2006	100.3%	37
Mar 2006	101.8%	27
Apr 2006	102.4%	20
May 2006	102.3%	19
Jun 2006	102.6%	21
Jul 2006	101.8%	30
Aug 2006	100.9%	39
Sep 2006	99.8%	35
Oct 2006	100.4%	41
Nov 2006	98.9%	63
Dec 2006	98.1%	75
Jan 2007	99.2%	45
Feb 2007	100.4%	38
Mar 2007	102.0%	24
Apr 2007	104.7%	18
May 2007	106.2%	18
Jun 2007	103.0%	22
Jul 2007	104.2%	26
Aug 2007	102.3%	26
Sep 2007	102.6%	26
Oct 2007	102.3%	58
Nov 2007	100.8%	41
Dec 2007	101.5%	48
Jan 2008	101.7%	35
Feb 2008	101.9%	21
Mar 2008	101.7%	39
Apr 2008	104.2%	29
May 2008	99.6%	31
Jun 2008	101.0%	24
Jul 2008	100.2%	30
Aug 2008	99.0%	65
Sep 2008	99.0%	49
Oct 2008	99.1%	44
Nov 2008	95.4%	81
Dec 2008	97.1%	55
Jan 2009	96.0%	54
Feb 2009	94.8%	74
Mar 2009	97.3%	76
Apr 2009	96.2%	57
May 2009	96.3%	54
Jun 2009	97.0%	41
Jul 2009	96.5%	59
Aug 2009	98.6%	67
Sep 2009	98.1%	56
Oct 2009	99.7%	49
Nov 2009	99.3%	74
Dec 2009	100.1%	58
Jan 2010	100.3%	62
Feb 2010	100.1%	39
Mar 2010	100.7%	33
Apr 2010	101.5%	27
May 2010	101.8%	31
Jun 2010	101.7%	20
Jul 2010	99.8%	24
Aug 2010	100.5%	35
Sep 2010	99.1%	52
Oct 2010	98.3%	34
Nov 2010	99.3%	66
Dec 2010	98.5%	78
Jan 2011	98.4%	50
Feb 2011	100.2%	24
Mar 2011	99.9%	34
Apr 2011	101.4%	20
May 2011	101.6%	30
Jun 2011	101.2%	23
Jul 2011	100.6%	36
Aug 2011	100.5%	46
Sep 2011	100.9%	36
Oct 2011	99.8%	43
Nov 2011	99.3%	54
Dec 2011	97.1%	48
Jan 2012	97.3%	47
Feb 2012	99.8%	63
Mar 2012	104.5%	23
Apr 2012	102.5%	26
May 2012	104.4%	15
Jun 2012	105.5%	19
Jul 2012	103.0%	19
Aug 2012	103.8%	22
Sep 2012	103.9%	26
Oct 2012	105.1%	26
Nov 2012	104.4%	26
Dec 2012	104.8%	29
Jan 2013	106.9%	14
Feb 2013	108.8%	22
Mar 2013	107.2% (so far)	20

We are seeing some parts of Santa Clara County pull back slightly, but in the Cupertino area it seems to be striving for more insanity and recklessness. (Bubble? I think so.)  This last week I was working with some home buyers for a Sunnyvale house that has Cupertino schools.  That home had over 120 disclosure packages pulled and I suspect that when it closes, it will be more than 20% over the list price.  With these crazy multiple offers, buyers are competing against all cash and non-contingent offers (sometimes the offers are both).    We cannot recommend buying properties without even a loan contingency – it is too risky – but that is exactly what many are doing.

Let’s look at sale prices over time.  This next chart is for houses (and duet homes) in the Cupertino area, or “Area 18″ as defined by our MLS.  The peaks of the market are in green and the trough in blue.  Please study the patterns: usually we see a little up and down, but the up overtaking in the long run.  Just before the last peak, though, which was in late 2007 for this area, there was a runup in pricing without much of the corrective pull backs we usually see. That’s the pattern we have right now, also, which I think is another reason to be extremely cautious right now.

 

What else can we learn about the Cupertino real estate market today?  Something very important is what is actually selling.  Next, please find what has sold & closed escrow year to date (2013 so far) in Cupertino, California, by price point.  Here you find where most home values lie, at least those sold.  I spot checked 2012 sales and the highest pricing band was the 1.2 – 1.4.  Want to buy in Cupertino? Most homes are between $1 million and $1.6 million.    Want to sell in Cupertino? It’s possible over $2 million, but a much bigger challenge.

 

In the end, it always comes down to what a buyer will pay and what a seller will accept. And how do sellers view it? They want the most money, best terms (free rentbacks) and least risk.  Cash lowers risk considerably so if everything else is equal, cash will win.  Contingencies increase risk, so each contingency in place causes the offer to be viewed less favorably (and the longer they are, the worse).  So many are writing non-contingent  offers.  To me, this is reckless.  Something outside of your or my control, such as a large earthquake, a terrorist attack or a stock market crash could change everything – and if you couldn’t close on the deal, your initial deposit could be lost.  In my professional opinion, this is highly dangerous so I cannot recommend it, no matter how “popular” it becomes in practice.

And here’s a quick look at the Cupertino condominiums and townhouses for sale or recently sold:

Trends At a Glance	Feb 2013	Previous Month	Year-over Year
Median Price	$681,000	$620,000 (+9.8%)	$560,000 (+21.6%)
Average Price	$695,500	$589,000 (+18.1%)	$534,286 (+30.2%)
No. of Sales	4	5 (-20.0%)	7 (-42.9%)
Pending Properties	12	5 (+140.0%)	6 (+100.0%)
Foreclosures Sold	0	1 (-100.0%)	0 (N/A)
Short Sales Sold	0	0 (N/A)	0 (N/A)
Active Listings	5	4 (+25.0%)	11 (-54.5%)
Active Foreclosures	0	0 (N/A)	1 (-100.0%)
Active Short Sales	0	0 (N/A)	2 (-100.0%)
Sales Price vs. List Price	109.4%	103.4% (+5.8%)	97.3% (+12.5%)
Days on Market	21	26 (-17.7%)	38 (-44.7%)

It’s still a seller’s market – and in fact the sales price to list price ratio is even worse….  So the same general trends for houses apply just as much to townhouses and condos.

Cupertino Median List Prices of houses Compared to Neighboring Saratoga, Sunnyvale and Los Altos

We know that the median sales price in Cupertino has been climbing steadily since March 1st (reflecting sales beginning in early February). How does it compare to nearby areas?

Los Altos is selling for the most of these 4 areas, but list prices fell for awhile when other areas were rising – but it now has another uptick since November. Saratoga was dippping but now rising again. Sunnyvale has been somewhat flat recently but improving. But Cupertino’s prices are making the steepest improvement. Perhaps these low prices are the drivers for the crazy hot market activity.

Cupertino median list price of houses by price quartile

Focusing just on Cupertino, let’s see how the information looks if we break it down into the pricing tier. Often the entry level houses are a very different “market” than the luxury homes segment.

The last few months have had some ups and downs in pricing, but most segments of the Cupertino real estate market have seen an uptick since the fall.  The luxury market in Cupertino has rising for most of the year, too.

What if we look back more than a year? Combining the quartiles, the trends look pretty volatile:

What’s happening with the most expensive homes for sale in Cupertino?  They have had a rough time of it – but currently there’s an uptick in the market at this price point. Here’s the same data just for the top quartile, the most expensive properties (luxury homes segment):

For the 2nd top tier (upper middle):

3rd level or lower middle:

And most affordable Cupertino houses or lowest quartile:

Cupertino Days on Market by Price Quartile: What’s Selling Fastest

Not surprisingly, the luxury market has had a harder time selling than entry level houses in Cupertino. This is true for most of the West Valley areas of Santa Clara County. Here’s a look at the days on market (DOM) for Cupertino by price point over the last year.

Remember, all real estate is local. For information on your exact area or price point, please contact me. I work with my clients to pinpoint the pricing.

What drives the Cupertino real estate market?

The residential real estate market in Cupertino, California, is driven in large part by the extremely high quality of its local public schools.  Many in Silicon Valley would state that for San Jose area home buyers, Cupertino offers the best “bang for the buck” when one lines up the cost of purchasing a home to the schools’ API scores. (Conversely, some residents are concerned that the very top schools – including but not limited to Cupertino – are so focused on academics that there may be too much pressure on kids and may lack balance for them.)

Other drivers are, of course, the local economy (such as the initial public offerings happening with some of the Silicon Valley tech giants), the availability of more affordable financing, and how the realty market in general is performing for any particular price point or particular school area. (Even within Cupertino, some schools are much more in demand than others.)  Comments in this article refer generally to this city of about 50,000 residents – real estate is local, though, so for precise information in any given area or tier of the market, please contact me!

Houses for sale in Cupertino California

Please browse houses for sale in Cupertino, listed from the lowest prices up to the highest.

Showing properties 1 - 5 of 19. See more Real estate in the city of Cupertino.
(all data current as of 5/25/2013)

1. $799,000 : 16790 Stevens Canyon Rd, Cupertino
   
   3 beds, 2 full baths

   Home size: 1,096 sq ft

   Lot size: 24,255 sqft
   
2. $1,080,000 : 20337 Via San Marino, Cupertino
   
   5 beds, 3 full baths

   Home size: 2,356 sq ft

   Lot size: 4,792 sqft
   
3. $1,098,000 : 882 Brookgrove Ln, Cupertino
   
   4 beds, 2 full baths

   Home size: 1,432 sq ft

   Lot size: 6,136 sqft
   
4. $1,188,000 : 19250 Tilson Av, Cupertino
   
   4 beds, 2 full baths

   Home size: 1,908 sq ft

   Lot size: 6,100 sqft
   
5. $1,199,000 : 20087 Somerset Dr, Cupertino
   
   3 beds, 2 full baths

   Home size: 1,786 sq ft

   Lot size: 7,100 sqft
   

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Tags: bubble, Cupertino, home prices, median list price, median sales price, overheated, price, Real estate, real estate market, silicon valley, Silicon Valley real estate, statistics, trends

This entry was posted on Friday, March 22nd, 2013 at 11:13 am and is filed under Cupertino, How's The Market?, Market Reports. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.