Trading Up in Portola Valley
For young families who want to raise their children in tranquil Portola Valley, one of the best ways to enter that market is by purchasing a home in the nearby, unincorporated Ladera neighborhood. It is minutes from Interstate 280 and Stanford University, and walking distance from Portola Valley’s shopping center, the Ladera Country Shopper. In addition to its close proximity to urban areas of Silicon Valley, Ladera is also served by the Las Lomitas School District with its excellent schools and consistently high test scores. To top it off, Ladera is reasonably affordable compared to other neighborhoods in Portola Valley, such as Central Portola Valley and Portola Valley Ranch.
Ladera home prices have been steadily increasing in the last five years, from the average sales price in 2010 of approximately $1.637 million to the average sales price in 2014, year to date, of approximately $2.072 million. The most substantial jump in appreciation has occurred this past year, up 16 percent. With prices in Menlo Park and Palo Alto going through the roof, DeLeon Realty believes appreciation will continue to rise in Ladera as tech employees look to surrounding cities for alternative locations for their future homes.
After purchasing a home in Ladera, there are many ways owners can take steps to increase the value of their home and take full advantage of potential appreciation in order to eventually trade up and buy a home in the affluent Central Portola Valley neighborhood. For instance, cost-efficient improvements can dramatically increase the value of the home. Such improvements include installing or refinishing hardwood floors, adding a fresh coat of paint to the interior of the home, and remodeling the kitchen and bathrooms. Money spent strategically on a home can bring a return of up to three times the amount spent in an appreciating market.
In addition, there are a few strategies that can be used for financing the purchase of a new home when trading up. The most commonly used method is obtaining a home equity line of credit to use as a down payment. For a more expedient option, some banks will also allow buyers to obtain a bridge loan.
Central Portola Valley, with its privacy, spectacular views, and large lot sizes, has not yet had a major wave of appreciation in the last few years. However, with the explosive appreciation in neighboring cities such as Palo Alto, Menlo Park, and Los Altos, as well as in Ladera this past year (whose appreciation is projected to continue), Central Portola Valley is the next place wealthy tech executives will look for purchasing their new homes. Attractive to many buyers, Central Portola Valley is prime for outdoor activities with its equestrian and bike trails running throughout the expansive neighborhood. There are also several nearby open space preserves allowing for diverse hiking experiences, as well as private swim and tennis clubs for social residents.
Yet, with all of these unique qualities, the average price per square foot of homes in Central Portola Valley is still drastically lower than those in Palo Alto neighborhoods. For example, Old Palo Alto, Palo Alto’s equivalent in affluence to Central Portola Valley, has an average price per square foot of $1,707 year to date, while Central Portola Valley’s year to date average price per square foot is only $1,035, almost $700 lower. Additionally, lot sizes in Central Portola Valley are drastically larger than those in Old Palo Alto, yet are similar in price.
For these many reasons, DeLeon Realty projects Central Portola Valley to be the next location to see a wave of appreciation as Silicon Valley buyers start to see the value of homes in this neighborhood, and as Ladera owners begin to capitalize on their appreciation and trade up, buying a prominent Central Portola Valley estate.
