The market is exploding exploding out to Tracy, Patterson, Mountain House and others. People are getting pushed out, as reported by The San Jose Mercury News. There’s been huge price appreciation in outlying areas. In the fourth quarter of 2013, the median sales price for a single family home:
- Tracy: $339,500 — up 28% y-o-y
- Patterson: $228,750 — up 45% y-o-y
That compares to San Jose’s fourth-quarter median price of $645,000; Sunnyvale’s $964,000; Milpitas’ $648,000; Oakland’s $435,500; and San Francisco’s $867,000.
The places that were leveled are bouncing back – part of the natural ebb and flow in our markets – and the sign of things getting out of hand.
We saw the same pattern last year in Palo Alto under $5M. Palo Alto stalled last year when other Peninsula markets were firing. Palo Alto was too expensive and people went elsewhere. Then everywhere else got expensive, and Palo Alto looked more reasonable.
The Palo Alto high end was a different story. The Palo Alto high end was undervalued last year. You should have bought it. Now, it’s blowing doors.
Think in terms of value: where is the value out there? There’s someplace that’s off kilter compared to others. Right now, there’s value in some local spots, such as the new development in Seminary Oaks and part of the Menlo Oaks neighborhood.
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