Sunnyvale home values have soared since 2011. This phenomenon is especially noticeable in one of the most sought-after neighborhoods in Sunnyvale, Birdland. The median sales price in Birdland also jumped from $1,126,500 in 2013 to $1,394,000 in 2014 as of October, reflecting a 23 percent increase. DeLeon Realty projects that Birdland will experience continued appreciation in the next five years.
This dramatic appreciation is a result of both macroeconomic and microeconomic factors. Historically low mortgage interest rates, low housing inventory, and the recent influx of major tech companies have all contributed. Lower mortgage rates continue with 30-year fixed mortgage interest rates hovering around four percent, allowing buyers to qualify for larger loans. Low inventory prevails despite an increase in home prices; it is natural to expect more homeowners would be enticed to sell. But, in Birdland, this is not the case in 2014. Only 102 homes were sold in 2012, and 106 in 2013. As of November 2014, year-to-date, that number fell to 74. The explanation of this decline is somewhat counterintuitive but has significant impact. It is reasonable to assume that the higher price point decreases the number of people who can buy. However, the large number of offers for a home suggests that there were plenty of buyers who could and would buy at a higher price level. The counterintuitive dynamic of this market is that some sellers are choosing not to sell because they are fearful of not being able to find a comparable, affordable replacement home, keeping the inventory low.
In the last three years, there has been an influx of major tech companies locating in Sunnyvale including LinkedIn, Google, and Apple. In July, LinkedIn leased 580,000 square feet of office space on North Mathilda Avenue for 2,900 employees. Google took over Juniper Network’s lease of 270,000 square feet on North Mathilda Avenue as well. Apple’s new Spaceship Campus, or Campus 2, is located at the Cupertino/Sunnyvale border on Homestead Avenue between Wolfe Road and Tantau Avenue. Slated for completion in 2016, the 2.8 million square foot campus will house 13,200 employees.
Located just across Homestead Avenue from Campus 2, Birdland Neighborhood is uniquely positioned to reap the benefit of Apple’s relocation with even greater home value appreciation in the next five years. Even before the conception of Campus 2, the desirability of Birdland was high because it is served by two of the highest performing elementary schools in Sunnyvale: Stocklmeir and Laurelwood, both with Academic Performance Index (API) scores above 940.
With its golden convergence of superior schools and prime proximity to Spaceship Campus, DeLeon Realty projects the appreciation of Birdland homes to outpace and outlast other desirable Sunnyvale neighborhoods. Expect median sales price to rise another 17 to 25 percent, putting prices at approximately $1,661,000 to $1,775,500 by 2017. Further, it is likely to continue to rise even beyond 2017 as Apple employees resituate themselves to be closer to work.