Why is the Median List/Sold Price so different in Mountain View vs Sunnyvale?
Hey folks, a special report today from Jim Holt of Redfin. I was wondering why the Sold Price for Mountain View and Sunnyvale are so different, and here’s what he had to say:
Burbed asked us at Redfin why there was such a difference between the prices in Sunnyvale and Mountain View:
Median List Price Median Sold Price Sunnyvale $750k $466k Mountain View $940k $831k I believe that the answer lies in the number of REOs (and short sales) selling in Sunnyvale compared to Mountain View. In Sunnyvale, I took the past three months of inventory and split it up into two groups: houses listed above $670k and houses listed below $670k. There were 77 houses listed below $670k, 58 of which are REOs or short sales, and 52 of them have either closed or are currently pending. For those above $670k, there are 130 listings, with only 4 being REO or short sales, and 42 sold or currently pending. What I can take from this data is that the REO’s (and short sales) are being obviously priced aggressively at a low price point with 58 of 77 in that price range selling. However, those priced higher, and not REOs, are not selling as easily and sitting longer on the market. So the higher end market in Sunnyvale is not doing so well.
In Mountain View, there are currently no REOs, and only 3 short sales (1 below $670k and 2 above $670k). Also looking at the break down in relation to pricing, 3 of 8 houses sold or are pending under $670K (not a whole lot of inventory under $670k) which means only 37.5% under that price there, where as 67.5% of the houses under $670k in Sunnyvale are sold or under contract. In Mountain View 33 of 93 over $670k have sold or are under contract (35.5%).
What I take from this is that Mountain View has stayed a relatively stable market with sales of higher and lower end single family homes selling at about the same rate through out and not being affected by short sales and REOs. However, Sunnyvale’s market has been drastically affected by the sheer number of short sales and REO’s in the lower end of the market, which are priced aggressively and really selling quite quickly, while the higher end homes are sitting in Sunnyvale, thus keep up the median list price, but dragging down the median sales price.
Well there you go. Mountain View – partying like it’s 1999. Sunnyvale – partying like it’s… uh… 2009. (Note to Sunnyvale: It’d be a shame to see something bad happen to your Real Bay Area status. Maybe you might want to do something about this situation.)
Thanks for the explanation Jim Holt!
April 8th, 2009 at 6:55 am
More useless aggregate data. http://www.mercurynews.com/realestatenews/ci_11612804
As stated in the above article, “Palo Alto’s ZIP code 94301 was the only place in the county to post a higher median value, up 5.2 percent.”
Way to go, ZIP 94301! You’re the bestest and the realest of the Real Bay Area. BUY NOW oR BE PRICED OUT FAREVERRRR !!!!!! !!!!!!
April 8th, 2009 at 7:41 am
I wonder if sales like this one and that one are taken into account.
April 8th, 2009 at 8:51 am
Silly question, burbed. Clearly the answer is “because Mountain View is closer to Palo Alto than Sunnyvale.”
April 8th, 2009 at 10:03 am
burbed, excellent feature!
the rise of mtn view and my own zip is a mystery to me, but I’d offer these items: 650 area code, nicer downtown (and downtown housing stock), correct side of 85, SGI spin-offs and Google.
April 8th, 2009 at 10:14 am
Sunnyvale is so out of the RBA it hurts. You shouldn’t even make jokes like that anymore Burbed, it’s cruel.
The article does not have a DOM number of MV, but it’s clear that lower prices trigger activity.
Fortress RBA seems to be falling back. Will the right parts of 94301 be able to hold out?
April 8th, 2009 at 10:37 am
Now the area code is a status symbol? Oh, c’mon.
April 8th, 2009 at 11:07 am
Actually I heard that in 1999, some developer got PacBell to extend a phone line out so that this new subdivision would have 650 instead of 408 (maybe vice versa) so that it would be more prestigious.
The downside was that those people could never get DSL because they were 6000+ feet from the CO.
April 8th, 2009 at 11:20 am
in the old days there was just 415 and 408 — 415 being SF and peninsula and 408 for south bay. the 650 was carved out of the 415 in the late 80s. the 408 boundary, however, remained the same, allowing the always handy “can’t date 408″ rule to remain unchanged. of course, I was never influenced by such shallow considerations and have always been willing to date rich, smoking hot women regardless of area code
April 8th, 2009 at 11:33 am
>>Sunnyvale is so out of the RBA it hurts.
I made this point before. Sunnyvale really is a tale of two cities (warning for Pralay — don’t take this literally now). Only South Sunnyvale is truly RBA, the further south the better.
April 8th, 2009 at 11:36 am
>>As stated in the above article, “Palo Alto’s ZIP code 94301 was the only place in the county to post a higher median value, up 5.2 percent.”
Not in the world according to Steve of course.
April 8th, 2009 at 11:39 am
RE, to be clear, do you believe your house is worth more today than it was exactly 1 year ago? do you believe any (every?) unimproved 94301 property is worth more today than 1 year ago? finally, please explain why per sq ft prices are dropping in the 94301. thanks!
April 8th, 2009 at 11:43 am
btw, RE, please re-read the excellent OP. it is all about “mix” – an important reason that median is not a reliable measure of property value change. you’ll won’t see me use median in an argument about valuation beyond general statements like Atherton’s housing stock is much nicer than Palo Alto (on average). and, it is the reason I focus on comps and apples — you know, all the properties you refuse to discuss.
April 8th, 2009 at 11:43 am
Mountain View will be in the same boat as Sunnyvale in a year.
April 8th, 2009 at 11:50 am
joe, yes, it is hard to believe that it won’t be significantly down.
April 8th, 2009 at 12:12 pm
it is all about “mix” – an important reason that median is not a reliable measure of property value change.
————
Steve,
According to RealEstater, “mix of properties” logic does not apply when median sold price goes up. It applies only when median goes down. Basically, in nutshell:
median is up: market is great
median is down: mix of properties
April 8th, 2009 at 12:16 pm
Sunnyvale really is a tale of two cities
——–
LOL! I thought Palo Alto is a tale of two cities too – 94301 and non-94301.
April 8th, 2009 at 1:52 pm
median is up: market is great
median is down: mix of properties
And don’t forget “useless aggregate data”.
April 8th, 2009 at 1:57 pm
… and its companion, “meaningless anecdotal data.”
April 8th, 2009 at 3:33 pm
Thanks for the analysis Jim. redfin is my favorite pr0n site.
Still waiting for a walk-to Castro MV house for $500k.
Give me a call when that happens.
April 8th, 2009 at 5:05 pm
I just started using PropertyShark today – holy CRAP that is a useful site.
Found out the neighbor across the street, a sweet little old lady who passed away last year, took out a GIGANTIC refi loan on the property 15 months ago.
The bank – Washington Mutual – is going to get hammered on this one.
I hand been pondering asking them what they want for the place, and the amount I was thinking was 2/3 of what she re-fi’ed it for…
It’s amazing what’s hiding out there.
April 8th, 2009 at 5:50 pm
April 9th, 2009 at 1:16 am
Google was just featured on NightLine. They brought up the esteemed city of Mountain View quite a few times.
April 9th, 2009 at 1:24 am
I think we’ll see an increase in MV sales as a direct result of the above. Everyone wants to live here.
Watch out, MV bound. You can’t move here anymore.
April 9th, 2009 at 2:28 am
“Banks aren’t reselling many foreclosed homes”
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/08/MNL516UG90.DTL&type=business&tsp=1
Makes sense to me… put too many on the market and they lower the value of their own assets. Talk about caught between a rock and a hard place. Good thing they have the government lifeline.
April 9th, 2009 at 8:36 am
They sure aren’t selling the famed “urine house” on Blossom Hill! That REO has been sitting for at LEAST 8 months. Now listed for $699k – last loan amount on the house? $1.7M. I kid you not.
There was another REO next door that’s been pulled off the market but there aren’t any signs of someone moving in.