As Palo Alto, Atherton, Menlo Park and Los Altos have just finished another year of double digit appreciation, value-oriented buyers are realizing that Westridge and Central Portola Valley present an extraordinary opportunity. To put the relative disparity in perspective, $3,600,000 purchased an original 2051 sq. ft. home on a 7,200 sq. ft. parcel in Crescent Park in August 2014. For the roughly the same amount of money ($3,650,000) during the same month, another buyer in Central Portola Valley bought a 4,912 sq. ft. remodeled and expanded ranch home on a 61,420 sq. ft. parcel. The combination of open space, great schools and increased privacy is very compelling.
A similar disparity lead to the transformation of Atherton’s Lindenwood neighborhood between 2010 and today. For decades, Lindenwood was the most stable of Atherton’s neighborhoods because of the uniformity of the housing stock (488 homes built primarily in the 1940s-50s on one-acre lots). People seeking to build trophy estates chose other locations.
However, that all changed in the last 5 years. Three factors contributed to this stellar appreciation: the incredible public schools, record low interest rates, and Facebook’s decision to locate its headquarters just a mile away in Menlo Park. Builders and buyers started competing for the classic ranch houses and began building exceptional dream homes. The competition is still fierce, although the number of remaining unremodeled ranch homes is sharply declining. Indeed, the price of unremodeled 1948 home (3,090 sq. ft.) on an acre in an excellent central location reached $5,000,000 last August.
Comparable market forces are at work today in Central Portola Valley (MLS Area 236):
• The 954 homes in Westridge and Central Portola Valley are primarily older ranch homes from the 1940s-50s on lots of one acre or more, often with views.
• Interest rates remain low.
• The Portola Valley School District is among the area’s top public school systems.
• The vibrancy of the Silicon Valley economy mean that job growth and compensation plans are climbing.
Two other ingredients are also encouraging the gentrification of this area. First, the initial wave of these new homes/ extensive remodels have been completed and established a market for trophy homes. In the last two years, were 11 sales in the $5,000,000-$10,000,000 range, providing a critical mass of comparable properties for valuation/appraisal purposes.
Second, buyers are increasingly frustrated with traffic issues along the Peninsula, especially on Highway 101. Buyers regularly define their search areas in terms of minutes to work, and Interstate 280 is becoming the commuting route of choice.
Here are some general highlights of the 2014 Portola Valley Market:
AVERAGE PRICE With a population of 4,353 residents living in 1,746 total housing units, the total number of Portola Valley home sales each year isn’t a large figure. However, the average sale price of a single family home climbed from $2,430,783 in 2012 to $2,727,000 in 2014, while the median sales price climbed 12% to $2,465,000.
INVENTORY As of 2/12/15, there are only three active listings in all of Portola Valley.
TIME ON MARKET The average number of days on market dropped from 67 days in 2012, to 49 days in 2013, to 44 days in 2014. More importantly, 51 properties brought to market during 2014 in sold in 14 days or less, and 54% (46 properties) sold for more than list price.