The market run of 2013 continued through Q4 in Portola Valley, with the median sale price up 2.2% ($2,249,500 vs. $2,200,000 in Q4 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.
Looking at Portola Valley overall, relative to a year ago, the number of homes for sale fell significantly (down 31%) and the number of days to sell them rose by 4.7 days from 58.8 in Q4 2012 to 63.5 days in Q4 2013. 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, 63 days is WAY under the current national average of over 180. This does tell us that Portola Valley is not a good market for a multiple offer or auction pricing strategy (aka price it low and hope it gets bid up).
The median price was down relative to the spring, which is more a reflection of product mix (more relatively lower priced homes selling) 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 indicates that 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. With such a small group of homes on the market in Portola Valley (currently 9 homes at all price points) these higher priced homes mess with the statistics more than more typical Portola Valley homes in the $2M – $5M range.
In general this year, homes in Ladera Ranch sell between $1.5M and $2.2M in about a week with multiple offers. Homes in Portola Valley Ranch sell in about $1.7M – $2.5M in about a week. Westridge takes a little longer because of the price points and the variety of price points between $3M and $12M.
The Portola 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 Portola Valley, 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 1700 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 6000sf 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 $13,900,000.
Ladera Ranch is the neighborhood surrounding the Ladera shopping center on Alpine Road near 280. Homes here are on 6000 – 10,000sf 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.