The market run of 2013 continued through Q2 in Portola Valley, with the median price up 27% ($2,950,000 vs. $2,325,000 in Q2 2012) as a result of continuing buyer demand and low inventory, much as we have seen across Silicon Valley. Coming off the big price run up in the spring, prices in Portola Valley flattened out, which is the typical seasonal pattern we see. Big price runs in the spring then hold their gains and flatten out through the fall. Relative to a year ago, the number of homes for sale and the amount of time to sell them fell significantly. Prices were down relative to the spring, which is more a reflection of product mix (more relatively lower priced homes) than a downward trend. Interestingly, we have seen a number of premium priced (over $10M) homes on the market in Portola Valley this year. This points to high end sellers who can wait for their price feeling that we are reaching a price peak and that it is time to sell or wait through another market cycle.
The Median price of a home for sale in Portola Valley eased 4% relative to last year, while prices of Pending Sales (under contract but not closed, so these are list prices) were off by 20%. Prices of homes closing escrow in Q3 were down 12% from a year ago. Again, these are more results of product mix vs. market trends.
Looking at Portola Valley overall, the number of days to sell fell by over 50% from 94 to 42. This is the time “on the market” from initial offering to agreed contract, and does not include escrow periods. We see a lot of volatility around Days on Market as Portola Valley has a small number of homes for sale, and a number of factors influence the amount of time to sell. While not as fast moving a market as Palo Alto, for example, 42 days is WAY under the current national average of over 180. This does tell us that this is not a good market for a multiple offer or auction pricing strategy.
The number of homes for sale were down 16% compared to last year at only 47, with 20 Pending Sales and 19 closings in Q3. A home for sale in Portola Valley is still a pretty rare thing, especially considering the price range for the market is $1M to $28M , meaning that demand can easily outstrip supply at any given price point. If there has been a time to sell a home in Portola Valley, 2012 and 2013 have been the time.
The Crystal Ball/What’s Next:
Expect that the number of homes for sale will remain low keeping steady to upward pressure on prices. With nearly half of the homes in Portola Valley, and the majority of Central PV, being over $3M, rising interest rates won’t have much of an impact on seller motivation or prices. Portola Valley is a small town and what I call a “destination city”, generally you move there and don’t leave. With only about 1,700 homes and another 500 in Ladera Ranch, and a turnover of about 3%, that’s about 75 homes a year. Sort by location and price range and you don’t have a lot of options.
The Portola Valley Sub-Markets:
Portola Valley is really four markets (my nomenclature and descriptions):
- The Ranches includes the Corte Madera neighborhood and Portola Valley Ranch. Homes are on half to one acre parcels and generally sell between $1.5M and $2.5M.
- Central Portola Valley is the triangle of Westridge, Alpine and Portola Road. Homes here are on acre to 5 acre parcels (the Westridge community is mostly 2.5 acres), and sell between $2.5M for a sloping lot to $8M for a newer home with views, usable land and a quiet location. There are outliers like 1260 Westridge which is three lots totally 22 acres with a large house that was originally listed for $25M, reduced to $16M. Lew Platt’s house is in this neighborhood and is currently listed for $24.5M.
- Los Trancos Woods includes the pie shaped area of homes south of Alpine Road extending up to the end of Vista Verde Way. Homes here range from cottages on 6000 sf lots to large mountain properties on 5 acres or more. 495 Old Spanish Trail is the outlier in this market sitting on 22 acres with big views of the Bay and San Francisco. Currently listed at $15,900,000.
- Ladera Ranch is the neighborhood surrounding the Ladera shopping center on Alpine Road near 280. Homes here are on 6,000–10,000 sf lots and sell between $1.5M and $2.5M. Ladera is in unincorporated San Mateo County, but is almost Portola Valley and the mailing address is Portola Valley, so I’ll include it here as opposed to Menlo Park. Ladera had a huge run on prices in 2012, with an overall jump of 10–15% for the better homes, blowing through the $2M price ceiling. Now the better homes sell for $2.2M–$2.5M. Wow.