Cupertino Home Prices - April 2007 Update
[You can find more recent information in the article Cupertino Housing Market Update - July 2007.]
Flat and down. Those are words you might not expect in the real estate market of a city with some of Silicon Valley's most renowned schools. And it's a reputation Cupertino added to with three of its high schools, as part of the Fremont Union School District, earning the coveted California Distinguished School Award in 2007. With good schools, come good real estate prices --- so the saying goes.
It was definitely a red hot market in Cupertino for the past couple years. In 2005, the average townhome/condominium stayed on the market for a "blink and you'll miss it" time of 9 days. In 2006, the days-on-market (DOM) number "doubled" to 17. This March, it was a relatively high 41. (There are a lot of real estate agents around the country who would still envy that number.)
Looking at the chart, it's a fact that, relative to the Santa Clara County average, Cupertino townhome and condominium prices got ahead of themselves in 2006, right? After all, that number was ahead of the average by 43%.
Not exactly.
What if I said that last year's market number isn't nearly as bad as it's been and the March 2007 number is a steal?
Cupertino Townhomes and Condos Are a Steal?
I mentioned Cupertino townhomes and condos as a bargain in my Silicon Valley Housing Market - April 2007 overview.
Here's another way of looking at it: by measuring premiums. In this case, the premium is how much the median price of a Cupertino home is above the Santa Clara County median price. The fact is that the premium for a Cupertino condominium or townhome this year, at 23%, is the lowest it's been for all the years back that RE InfoLink has released data.
Looking at the chart, you can see the pattern where there's a spike and a dip every other year, almost in lock step. I'm not making an attempt to predict the future, but using those same glasses people use for hindsight, it's not hard to see that there's a window for people looking to capitalize.
Cupertino Single-Family Home Premium Down
The premium for single-family homes in Cupertino is back down to 2003-2004 levels, but in reality, there's actually a very slight correction going on here even though the median home price went up from $1.12 million in 2006 to $1.14 million in 2007.
Inventory stayed relatively steady at 65 vs. 69 a year ago in March and 161 in 2003 (at the end of the most recent price slide). But the DOM number has been steadily increasing over the past three years from 21 to 33 to 42. There would probably have been a fall-off in price but new listings have decreased for four years running (94 in March 2004, down to 53 in 2007).
Based on only pricing data --- not the personal needs and wants my clients and I discuss --- I'd advocate getting a townhome or condominium in Cupertino, but I have a more wait-and-see attitude towards single-family homes in the area... especially with the summer vacation for schools coming up.
After all, in an area that relies heavily on the quality of its schools for its residents, the end of the school year may mean more pressure on properties that have been on the market for a while already.
For my clients whose search is specific to Cupertino and isn't time-constrained, I'll usually add some of the weaker properties (which I think will hang around) to my property tours so that we can revisit them when the time is right.
With the Cupertino Square revitalization efforts in full-swing, there are going to be added entertainment and shopping options for Cupertino residents. These things take time but they're definitely making forward progress.
