Another Hot Market
At the end of 2014, the median price for homes in Portola Valley was up for the fifth year in a row, at just under $2.5 million, another all time high. Demand continues to outstrip supply, due to the strength of our local technology driven economy. Just about everything is selling in record time, and 30% of sales were all cash transactions. The vast majority of properties came to market through the Multiple Listing Service, although 10% or so traded privately, off market. With the shortage of inventory we are experiencing, sellers are advised to go the off market route only if they are confident of getting top dollar.
Although Portola Valley prices have moved up dramatically in the last five years, in comparison to many of our neighboring communities, including Palo Alto, Menlo Park and Los Altos, Portola Valley remains a great value where you get more house and more land for the same money. Last year $2.8 million bought a 3100sf home on almost an acre of land whereas in any one of these other communities both the house and lot would have been a fraction of this size.
2014 Portola Valley Neighborhood Update
Central Portola Valley generally refers to the area south of Westridge Drive, west of Alpine Road, and north of Portola Road. However, for real estate trends and tracking purposes, other beautiful areas such as Westridge, Blue Oaks, Willowbrook Road and offshoots of Los Trancos Road and Alpine Road are also included in the numbers. These properties are usually well over an acre, offer larger homes and often lovely foothill views. In 2014 sales in these neighborhoods ranged from two to ten million, with an average of $3.7 million.
Ladera, traditionally one of Portola’s more accessible neighborhoods, took off in 2014 with 22 sales, twice as many as the prior year. Coveted by young working couples and Stanford related families that appreciate it’s close in location, convenient shopping center, recreation facilities and proximity to commute routes, this neighborhood has it all. Multiple offers were the norm in 2014, and homes sold for a premium of 11% over the list price. The average sale price moved up a sharp 19% to $2.1 million, disappointing many buyers who couldn’t come close to making that jump.
Portola Valley Ranch also saw a big step up in activity. The new generation of buyers is a mix of middle aged couples downsizing from high maintenance properties and young couples with small children, both of whom favor the natural open space setting of this planned community with its spacious homes and wonderful amenities maintained by a diligent HOA. The new playground, miles of hiking trails, pools, tennis courts, winery, exercise room and clubhouse offer the quintessential California lifestyle for a manageable monthly fee. In 2014 the average sale in the ranch was $2.6 million.
The most remote of Portola Valley’s neighborhoods, Los Trancos and Vista Verde, have neighborhood associations that keep them closely knit with social events like a spring progressive dinner, a summer community picnic and Halloween celebrations. This year one notable event in the neighborhood was the donation of 80 and the auction of 160 military tanks from the huge Jacques Littlefield collection of military vehicles, formerly housed at 499 Old Spanish Trail. Littlefield’s unique compound on 19 acres at 497 Old Spanish Trail was also listed for sale last year for $13.9 million but did not sell yet. The average neighborhood sale in 2014 was $1.8 million.
The Woodside Highlands neighborhood is small and wooded, very retreat-like, with hilly, narrow streets. Last year it had only three sales at an average sale price of $1.7 million. Due to the topography of this little pocket and the challenge of navigating its streets, it has a targeted appeal.
Activity in the Brookside / Corte Madera neighborhood was also slow in 2014 with only three sales, a third of the prior year’s. Like Ladera, the lots and homes in this area tend to be smaller and less expensive than in Central Portola Valley, but it has a nice neighborhood feel and is close to the shops at the intersection of Portola and Alpine Roads. The average price in 2014 was $2 million.
Outlook for Portola Valley Housing in 2015
Looking forward, it’s hard to predict if the market will continue its climb, plateau or decline this year. At a statewide level, the California Association of Realtors is predicting price gains of 5.2 percent which is relatively moderate growth after 3 years of double-digit gains.
After the dot.com boom in 2000, the market bottomed out in 2002 then improved for six years, peaking in 2008, then bottomed out again in 2009 after the financial crisis. 2014 was the fifth year of an up market cycle, and the real estate market tends to move in seven to ten year cycles. The local economic outlook remains strong, employment and consumer confidence are up, and interest rates are still low. 2015 may be another good year for sellers and the opportune time to bring their properties to market rather than trying to time the peak and possibly miss it. An uptick in inventory might allow prices to plateau so more buyers can get in. This would be a welcome change since San Mateo County is now the second least affordable county in the state according to a recent study with a housing affordability index of 14% compared to the statewide average of 30% and the national average of 57%.
If you are interested in buying or selling in Portola Valley please give me a call.