How’s the Cupertino real estate market?
The real estate market in Silicon Valley can sometimes be a little quirky, so I like to approach this question from a few angles. In this article I’ll make use of my charts from Altos Research, which uses listing data (not solds) and is automatically updated every week and also monthly reports from my RE Report subscription, which uses sold data as well as active listings data. Also I’ll periodically update it with info from the MLS that I have crunched myself or anecdotal stories from those of us “in the trenches.” The article is a bit long but I think much more comprehensive giving the multiple methods of answering the question of how the Cupertino real estate market is faring.
Cupertino median list price of houses by price quartile
Often the real estate market in any given city is very different between the most expensive homes and the most affordable ones. While many Cupertino home buyers are looking for a short commute, great public schools or strong resale value, some seek a luxury property with a view in the Cupertino hills (either off of Montevina Road by Ridge Vineyards or in other lower foothills). The more moderate pricing tiers are faring better in Cupertino and in most of the valley than those in that luxury tier (think over $3 or $4 million for luxury tier in this city).
The last few months have had some ups and downs in pricing, but most segments of the Cupertino real estate market have seen an overall uptick since last year, even after a bit of recent price cooling. The luxury market in Cupertino had a steep rise at the start of the year, but it appears to have peaked. What if we look back more than a year? Combining the quartiles, it seems that there’s been more up than down, though buyers will be happy to see the current trend is pointing down.
Hearing the real estate market “war stories” about dozens of offers on Silicon Valley properties and overbids ranging from 20 – 55% had convinced me that we were in a Silicon Valley real estate market bubble back in early 2013. At least, this is what a bubble looks like, sounds like, feels like, and acts like. At the time I thought, “how much longer could this continue?” Four years and counting – that is the answer.
I tell my family and friends that we are in “crazyland” as buyers purchase homes with no contingencies of any kind, houses sell in 10 days or less (if everything is right, which seems to be the case 75% of the time), and those same properties are selling at well over list price and with much more than 20% down.
The absorption rate, or months of inventory: it is a Silicon Valley real estate market bubble?
What do the numbers say? I just logged into MLSListings.com and see that right now, in all of Santa Clara County there are 817 single family homes (houses + duet or attached single family homes). The pending and contingent homes measure 1074, far more! That ratio alone suggests that the market is in overdrive. In the last 30 days, 950 single family homes have sold & closed escrow. So the months of inventory is 817 divided by 950 = .86 of a month of inventory, so about 3.5 weeks of inventory. (When I originally blogged about the potential bubble, it was 1.8 months of inventory.)
In other words, things are flying off the shelves. And they have been, with only a few minor blips here and there, since early 2012. Does that sound like a Silicon Valley real estate market bubble to you – a crazy strong seller’s market lasting 4.5 years? I could be wrong, but I think of bubbles as being something fairly swift, not a multi year trend.
Homes are selling faster than new ones are coming onto the market!
It’s one thing to say that one city, town, or school district has a very low months of inventory (or high absorption rate). It is another altogether to say an entire county is that low. This is a major trend, not a tiny blip in the statistics.
How soon we forget that after the outrageously deep seller’s market in 2000, we had a steep drop in 2001. Or that all the crazy buying in the San Jose area (and other places) in 2005-06, combined with bad financial regulations, lead to the crash of 2007-2009. But perhaps that enormous “correction”, in which Santa Clara County lost about 50% of its value on average, had more room to recover than we initially realized. Jobs keep flowing in, and housing starts are not keeping up. Supply and demand – the age old equation. That would seem to refute the idea that this is a Silicon Valley real estate market bubble. Perhaps low inventory and strong demand are what we should be expecting going forward. Continue reading
What makes an expensive house in the San Jose area more than just a pricey bit of real estate, but instead a Silicon Valley luxury home? How is high end real estate different from the rest of the market? When is a property not just a home with land, but an estate?
In other parts of the U.S., spending $1,200,000 may fetch a 4000 square foot home, new construction, in an upscale gated community with country club amenities such as a golf course, tennis courts, and more. Here, that same $1,200,000 will procure an entry to mid-level single family home in many parts of Santa Clara County. It won’t necessarily be a Silicon Valley luxury home.
Luxury connotes a combination of qualities, features, and amenities. And it includes pricing (relative to the nearby market), condition, land, design.
Pricing Luxury Homes in Silicon Valley: What Do They Cost?
Expensive Silicon Valley homes are not necessarily luxury homes. Depending on the city or town, the price tag could be higher or lower. For instance, a fabulous house on a large lot in Gilroy’s Eagle Ridge might sell for 1/3 as much as the identical type of home, land and neighborhood found in Saratoga, Monte Sereno, or Los Gatos, or Los Altos, if a similar home happened to be available. Generally, though, luxury homes could cost as little as $1,000,000 or so in some parts of Silicon Valley or in neighboring counties, but in most parts of Silicon Valley, a true estate type property will be valued at $2,000,000 or $3,000,000 or more. In some areas, such as Palo Alto, that $2 million doesn’t go too far and the home you can purchase at that price tag may need major updating – or it could be “land value”. For our purposes today, we’ll use $2 million as the bottom number for estate properties, but it may or may not be the case in some areas.
One question I get a lot is this: what does it cost to buy a 4 bedroom, 2 bath house of about 2000 square feet?
So to answer this question, let’s see what houses like this are selling for (4 bed, 2 bath, appx 2000 SF or 185 square meters) and see how the cost looks in one Santa Clara Count y / Silicon Valley area versus another.
Today I compared several areas and cities using this criteria: single family homes of 1800 – 2200 SF, 3-5 bedrooms, 2-3 bathrooms, on lot sizes of 6000 SF to 10,000 SF. Normally I would chart this over the last 2 months, or 60 days, but because of the low inventory causing the sellers market I have expanded the search to the last 3 months, or 90 days, for a better range. As of this writing, Saratoga only had one sale over the last 90 days, so data for that segment may or may not be a good average.
Here’s how it shakes out in the “west valley areas” along the Highway 85 corridor, most of which are known to have good to great public schools. What areas are most affordable? One way of analyzing this is the “price per square foot” figure. Whenever I update the chart, I re-arrange the order of the cities from high to low based on the price per square foot, although there’s usually minimal movement.
To compare, here are the numbers from the this past January 26, 2017. There were fewer sales, so the search range was bumped up to 120 days instead of 90 days (and Los Altos was so low, it was individually searched at 180 days). You might notice price per square foot appears lower across the board in January compared to July. This is most likely because the market has heated up over spring and summer, which you can also see in the DOM.
Below are my results from the same search back in September 18, 2015. By comparison, you can tell that Santa Clara’s average Price has increased, pushing it above Almaden and Campbell.
How competitive is the market? Have a look at the DOM or “Days on Market” figure. All of these days on market are short, but they range from low to heart-skippingly fast.
In most cases, the priciest and most desirable places have either the best schools or shortest commute location or both (Palo Alto and Cupertino have both). Had I ranked these for school scores, you’d find that Cambrian is fairly high up and a good “bang for the buck” location – though not a super short commute for folks who work in Mountain View (though not so bad for people working in Cupertino). Almaden, too, offers a good value for the quality of the schools, homes, and neighborhoods, though the commute is longer. None of these is especially close to North San Jose (where a major employer is Cisco).
It should also be noted that in some of the smaller communities with less on the market these numbers may not be as stable as others with more data – for instance, Los Altos only had four homes sold, the second lowest, matching this criteria within the 90 days of collected data, and therefore may not be as accurate as others, such as the Blossom Valley area of San Jose with the most data at 38 homes sold. For these smaller communities with less data, it is beneficial to look at them more closely – Saratoga, for instance, has 3 different high school districts which have an impact the real estate prices. This chart is really just a snapshot to give a general sense of the relative affordability of these markets to one another. Continue reading
Often I have clients who are interested in purchasing a 4 bedroom, 2 bath home in a good school district in Silicon Valley, particularly in the South Bay and West Valley areas. Tonight I did a study on the MLS of homes that have sold and closed escrow in the last 4 months with these characteristics:
- single family home (house)
- 4 bedrooms
- 2 bathrooms
- 1800 to 2200 square feet of living space
- 6000 to 10,000 sf lot
Disclaimers aside, here are the numbers for select West Valley Communities in the West/South Bay area with good schools. The first number is the average sales price per square foot, the second number is the average sales price:
And a look at the chart from all back in 2015…
And all the way back in 2011. What’s changed? A lot! The order has shifted some, showing where demand has increased or decreased. Most noticeably, the prices are significantly lower in 2011 than they are now. The 2015 chart shows prices somewhere in-between the 2011 and 2017 levels. Palo Alto and Los Altos remain consistently in the top two positions.
The home prices tend to run with the school district API scores. You can check the 2013, three year average, API scores in Santa Clara County for both the districts and the individual schools online here. Continue reading
Whether you call it the San Jose area, Santa Clara County, Silicon Valley, The South Bay, or even the old moniker of “The Valley of Heart’s Delight”, there is a lot to love about living here. I’ve put together a slideshow with a taste of the residential communities in and near San Jose, including Almaden, Willow Glen, Cambrian, Evergreen, Los Gatos, Saratoga, Monte Sereno, Campbell, Cupertino, Santa Clara and more. Sit back and enjoy the photos!
For Father’s Day, my husband thought it would be nice to take a leisurely back-roads drive to Ridge Vineyards in Cupertino via Pierce Road in Saratoga and then do a little wine tasting. It was nice to get away from major roads and freeways, and we very much enjoyed the drive – but much more so the destination!
Every time we visit Ridge, it seems to be just a little bit nicer than when we’d last seen it. The grounds have gone from rustic to sophisticated and there are many more places to enjoy a little wine and picnic now as compared to ten or twenty years ago. (I think I first joined Jim there more than 30 years ago.) Here are a few photos of our trek there today. It’s always a pleasant place to visit, and often the views are spectacular.
For more info about Ridge, tasting, or joining any of their member programs, please visit them online at http://www.ridgewine.com/ or stop by the lovely Montebello Road campus when they’re open.
17100 Monte Bello Road Cupertino, CA 95014
Love Cupertino? Check out housing market info here:
$1,868,000 : 821 Stendhal LN, CUPERTINO4 beds, 2 baths
$1,699,950 : 10295 Stern AVE, CUPERTINO3 beds, 2 baths
$1,248,888 : 19999 Stevens Creek BLVD 312, CUPERTINO2 beds, 2 baths
$2,698,000 : 10089 Oakleaf PL, CUPERTINO4 beds, 4 baths
$1,345,000 : 10080 Firwood DR, CUPERTINO2 beds, 2 baths
$2,398,000 : 20805 Greenleaf DR, CUPERTINO3 beds, 2 baths
$1,988,000 : 10792 Wilkinson AVE, CUPERTINO4 beds, 3 baths
$1,688,000 : 10141 Empire AVE, CUPERTINO3 beds, 1 bath
$1,588,000 : 10185-83 Alhambra AVE, CUPERTINO0 beds, 0 bath
$1,888,000 : 10629 Merriman RD, CUPERTINO3 beds, 2 baths
See all Real estate in the city of Cupertino.
(all data current as of 6/17/2018)
Listing information deemed reliable but not guaranteed. Read full disclaimer.
Please continue reading to view the real estate trend charts for the various areas & elementary school districts across Santa Clara County (San Jose, Los Gatos, Cupertino, Milpitas, Campbell, Saratoga, Santa Clara, Sunnyvale, Monte Sereno, Morgan Hill, Los Altos, etc.)
Today I’m sharing with you Silicon Valley real estate statistics which were presented to me by my company, Sereno Group. These are “by school district” and I think you will find them immensely insightful! First, though, a brief commentary on the overall findings, then statistics for single family homes (mostly houses but a few “duet homes”) in Santa Clara County, and lastly, the same info but for condominiums and townhouses.
Please find the real estate market statistics by school district in the Santa Clara County area next. Please note that the San Jose Unified School District is extremely large and varied, and the numbers would be very different if you were narrowing it to Almaden Valley with Leland High School as opposed to some areas which are not performing nearly as well.
- Inventory is down.
- Home sales are down (because inventory is down).
- And home buyer morale is down in the wake of multiple offers, overbids and bidding wars.
Pricing are rising fast. Some folks are now getting priced out of the market and many are just giving up until things calm down. We have seen this before: a Déjà vu.
This is not happening uniformly across Santa Clara County, but is a general trend seen with the most popular properties. These tend to be the most affordable homes in areas close to high tech job centers (such as condos and townhouses in Sunnyvale, Palo Alto, etc.) as well as the least expensive single family homes in areas with good to great schools (think Union Schools area of San Jose’s Cambrian district, homes in west San Jose 95129 with Cupertino schools, plus of course the more expensive areas with outstanding public education too). In general, it’s a seller’s market.
As a frustrated home buyer, what can you do? Besides just throw more cash at the problem, and give away all of your rights?
One approach is to find the segments of the market which are not quite so hot. For instance, there are lovely townhomes and condominiums which are selling a little more slowly because they are on the expensive end of pricing for their zip code. Those properties may not sell so fast because many of the buyers in that range are going to push just a little more to get into a single family home instead.
Another idea is to find homes with fixable problems, defects, or issues. You cannot change location, but it may be possible to take a 3 bed, 1 bath home and add a second bathroom to it. Many houses with pools (where pricing is under $1 million) sell with less bids because of the pool – and it IS possible to remove a pool, often making a home more valuable to most home buyers. So target these homes and there may be less competition than the same house without a pool.
Finally, consider properties which have been on the market awhile. Many buyers won’t take a second look at a house that’s been on the market for 45 or 60 days, but that may be the gem you need. Most of the time, properties that languish on the market are simply overpriced. Sometimes there are odor issues or other things which may require more effort to remediate, but these problems may be an opportunity in disguise.
$3,195,000 : 1144 Channing AVE, PALO ALTO3 beds, 2 baths
$2,499,000 : 885 College AVE, PALO ALTO2 beds, 1 bath
$3,998,000 : 1084 Fife AVE, PALO ALTO4 beds, 3 baths
$2,985,000 : 352 Stanford AVE, PALO ALTO3 beds, 2 baths
$2,998,000 : 4221 Wilkie WAY, PALO ALTO4 beds, 3 baths
$2,888,000 : 753 Maplewood PL, PALO ALTO3 beds, 3 baths
$1,998,000 : 2722 Louis RD, PALO ALTO2 beds, 1 bath
$3,990,000 : 2947 Clara DR, PALO ALTO4 beds, 3 baths
$3,888,000 : 2791 Cowper ST, PALO ALTO4 beds, 4 baths
$2,688,000 : 778 Florales DR, PALO ALTO2 beds, 2 baths
See all Real estate in the city of Palo Alto.
(all data current as of 6/17/2018)
Listing information deemed reliable but not guaranteed. Read full disclaimer.