The numbers:
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.
Looking at Portola Valley overall, the number of days to sell rose slightly compared to a year ago at 44 vs. 40.
The number of homes for sale were flat compared to last year at 60, but pending sales and sold homes were up relative to Q2 2012.
Definitions:
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 $15,900,000.
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.
What happened:
We saw a number of larger sales in Portola Valley during Q2, including several homes that were on the market in 2012 that didn’t sell, but sold this year as the rising market came to them. With the run on real estate values over the last two years across all of Silicon Valley, even perennial laggards Portola Valley and Woodside are seeing rising prices as a limited inventory of homes is met with increasing demand. Another factor is more buyers who traditionally would have focused on Menlo Park or Palo Alto have been expanding their searches to Portola Valley and Woodside. As prices have soared in closer in markets, the larger homes and more land available for similar prices in Portola Valley and Woodside have become relative deals.
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 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.