_{(single-family home data from MLS listings Inc.)}

Palo Alto, the feather in the cap of Silicon Valley real estate, struggled with its median sales price, falling two straight quarters after reaching its peak in second quarter of this year since the housing bust. The fourth quarter of 2010 was lower than the same period in 2008 ($1,350,000) and in 2009 ($1,370,000). This is due to two factors: the real estate market adjusting to pre-bubble prices, and fewer expensive properties being listed because of the deprecated values.

On the positive side, sales are up overall, beating all previous quarters this year and the fourth quarters of 2008 and 2009. The sales price to list price ratio is also one of the most balanced of our four city comparison, and with a ratio just above 100%, the only one favoring the seller.

_{(single-family home data from MLS listings Inc.)}

The high home prices of Los Altos influenced how it reacted to the 2007 bust, mainly a hold off of purchasing (only 38 homes sold in the fourth quarter of 2008) and a depreciation of the median sales price.

This past quarter, Los Altos is still struggling in its sales price to list price ratio, a result of many buyers unwilling to pay the full listing price. But this shouldn’t overshadow that this quarter the city put up the highest median sales price for the year. And compared to the same period in 2009, the median sales price is up 7% and days on market fell 8%, both good signs.

We can only anticipate what 2011 will be for real estate, but if Los Altos is any indication, higher-priced markets could be shaking off their frost a little sooner than the past few years.

_{(single-family home data from MLS listings Inc.)}

Mountain View has been an example of what many buyers and sellers would hope to see in their local market after the housing bust. The city fell, but not as hard as its neighbors, and recovered immediately into a slow rise that continued throughout 2010.

Its weak points this quarter were in average days on market (still better compared to 2009, with 61 days) and a sales price to list price ratio that favors buyers. The median price rose in the fourth quarter, and aligns with the more popular spring and summer months, including besting the same period in 2009 by more than $10,000.

_{(single-family home data from MLS listings Inc.)}

The winter months are rolling through the fourth quarter of 2010, and home sales have sunk along with the median sales price and average days on market. This is no surprise and remains a truth that there are seasons in real estate, and we can expect it to stiffen as we enter the first quarter of 2011.

Comparing the fourth quarter of 2010 to the same period in 2008 (closed sales, 90; average days on market, 47; median sales price, $656,500) and in 2009 (closed sales, 141; average days on market, 52; median sales price, $760,000), Sunnyvale is wavering but not falling into a double dip market that bearish experts are predicting.

Homebuyers, along with real estate agents, tend to put a strong bias on high API scores, especially since good schools can translate into better priced homes. But in cities like Mountain View, where the majority of the school district is either at the state API goal of 800 or above, we can start to consider other factors in the makeup of a school to see if it is the best fit for a child.

Read on to find out what our agents discovered on the tour and some of their insights. At the end we have tables showing all the API scores from elementary to high school in Mountain View, including school ranking and subgroup scores.

Christine Ko on the tour and the Mountain View Education Foundation (MVEF)
Edmund Yue and James Yang on looking past API scores
Kristine Suh, a parent, on deciding which school was right for her children
2010 API scores for Mountain View elementary schools
2010 API scores for Mountain View middle and high schools

Christine Ko on the tour and the Mountain View Education Foundation (MVEF).

The real estate agent tour was held by the MVEF, hosted by the new Superintendent, Craig Goldman, along with a tour of Crittenden Middle School by Principal Karen Robinson. Following a walk around Crittenden, the agents took a bus tour of all the elementary and middle schools in Mountain View.

A notable aspect of the MVEF is that they work with parents and the community to raise money for school programs that are no longer funded by the state. This includes funding in the arts, music, and sciences at the elementary level, and electives and after-school sports for middle school.

Christine mentioned that a highlight of the tour was finding out what unique programs each school had. We have a handout (the images below) that shows enrollment boundaries for the elementary schools, a quick description of special programs, and each school’s 2010 API scores. Included are Benjamin Bubb, Mariano Castro, Edith Landels, Frank L. Huff, Stevenson, Monta Loma, and Theuerkauf elementary schools, and Graham and Crittenden middle schools.

Edmund Yue and James Yang on looking past API scores

The biggest point James took from the tour was that API scores should never be the only determining factor parents consider when choosing a school for their child.

API scores are restricted to academic performance, and does not do a complete job of comparing overall school quality. Some areas that parents should also look at are the school’s administration, community involvement, and existing programs that encourage both struggling and promising students.

Edmund added that Superintendent Craig Goldman mentioned one way parents could pull additional information about a school’s API score is to look at the subgroup scores and demographic information. (We have more about this in the API graphs below.) If you combine that information along with staff involvement with students and take into account unique schools programs, such as at Mariano Castro Elementary School, where the students go through a Spanish-English dual immersion program, parents can really get a good idea of what a school is about.

Kristine Suh, a parent, on deciding which school was right for her children

As a parent, Kristine experienced the process of deciding what school would be right for her children 10 years ago, and now has advice for parents in the same situation.

Her family had the opportunity to choose between Los Altos, Palo Alto, and Mountain View school districts, ultimately ending up in Los Altos.

She said that API scores were an important part of her initial search, but she has found that scores play only a small role in the child’s day-to-day education. On top of school research, if the parent has time, is why not meet with the potential school’s teachers and sit in a class. You may find that scores are not as important as what is the actual children’s relationship is with the teacher.

At the high school level, she said it is important to also consider the number of advanced placement classes available. One school might have a high API score but few options for AP classes. But, on the other hand, a school might have a medium API score, perhaps because of a large demographic and socioeconomic spread, but a breadth of AP classes.

Lastly, a good resource online to look at an endless stream of information on school, find parent reviews, and more is available at greatschools.org. If you are interested in talking with a representative in the Mountain View Whisman School District that can put you in contact with involved teachers and parents, feel free to contact us.

2010 API scores for Mountain View elementary schools

_{(For explanation of terms and a more in-depth analysis please visit the CDE API website)}

2010 API scores for Mountain View middle and high schools

_{(For explanation of terms and more in-depth analysis please visit the CDE API website)}

Recommend reading

- Silicon Valley School System: Best Bang-for-the-Buck
- 2009 Santa Clara and San Mateo County API School Scores
- API Scores: Base vs. Growth

_{(single-family home data from MLS listings Inc.)}

Palo Alto really established itself this quarter as a market leader. Compared to the third quarter in 2009, Palo Alto has improved in all five measures. This quarter Palo Alto jumped its selling price to listing price ratio ahead of the other three cities in our comparison to 101.26%, turning it into a seller’s market. Though, what this means for future home prices or the market is anybody’s guess as we enter the winter quarter.

The average days on market in Palo Alto remains the lowest of our four cities at 35 days, a drop from 57 days for the same period last year. Palo Alto also has the highest total sales volume, even though it has the second smallest population in our comparison. This is due to the wide range of property values available in Palo Alto, from just under a million to the many millions.

_{(single-family home data from MLS listings Inc.)}

One thing to consider when looking at data from Los Altos is that its population of around 30,000 is less than half of the next smallest city in our quarterly comparison. But, on the other hand, the median price is the highest at $1,565,000 — 13% higher than Palo Alto and almost double either Sunnyvale or Mountain View.

In the third quarter of 2010, the median price bumped up 4.3% from last quarter and is equivalent to 2006 levels. Another positive sign for Los Altos is that average days on market is in the 40s range, a significant improvement from the third quarter last year, where it was hanging out at 67 days.

The last item of note for Los Altos is the sales price to listing price ratio has fallen this quarter, 96.96% from 98.21% last quarter. Since 2008, Los Altos has been a buyer’s market, while our three other comparison cities have been trending towards a seller’s market. Buyers aren’t necessarily hesitant but we are seeing a lot of price adjustments in the area.

_{(single-family home data from MLS listings Inc.)}

Part of the advantages of Silicon Valley is that the housing market ride for the past few years has been less bumpy than what the nation has experienced. A good example of this calm is in the city Mountain View.

Even examined against our other comparison cities, Mountain View has been the most stable, especially in regard to the median sales price. It bumped up to $1,148,440 during the boon in 2007, but unlike everybody else in 2009, it bumped up instead of sliding. Since then the city median has floated at $900,000 for single-family homes.

Average days on market bumped up and closed sales fell compared to last quarter, but some of that is due to market cycles. The sales price to listing price ratio is at a healthy 99.94%, meaning a fair market for both buyers and sellers.

Part of the stability in Mountain View is due to the reasonable prices compared to Los Altos and Palo Alto. There will always be buyer demand at just under a million, especially since it shares the benefits of being a neighbor to prestigious cities, has good schools, and an ideal location in the Silicon Valley.

_{(single-family home data from MLS listings Inc.)}

Sunnyvale has gone through another quarter without any major hiccups, showing improvements from a year ago. The median sales price has been steadily increasing from its recovery in early 2009, and is equivalent to 2006 prices. Average days on market have also dropped to 41 days, down from 77 days in the first quarter of 2009, though it has yet to reach the unusually low 23 days that occurred in the second quarter of 2006.

Lastly, the sales price to listing price ratio is hovering around 100%, meaning sellers are pricing homes at prices buyers expect to pay — neither a strong seller’s market as in 2007, nor a buyer’s market as in 2009.

We’ll cover total sales volume, sale price to listing price ratio, days on market, median selling price, and number of homes sold, using data on single-family homes off of MLS listings Inc.

First, let’s have a look at:
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Total sales volume clearly shows that over the past two-plus years the housing market dropped after peaking in 2008, then slowly bounded up and down, successively higher each quarter. The second quarter of this year really reflects a trend towards returned growth in the housing market of our local cities.

One additional interest to point out is that although most of the cities have not yet reached 2008 sales volumes, Mountain View has surpassed it.

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The sales price to list price ratio is one way to show buyer and seller perceptions: above 100% is a seller’s market, and buyers are paying above the listing price to win a house; below 100% is a buyer’s market, and sellers are having to reduce their listing price in order to sell a house. The closer a city is to 100% the more the market is balanced.

On a house that is listed for $1 million, a 1% change would amount to $10,000.

In both quarters this year, Mountain View and Sunnyvale have both been above 100%, a result of high demand for entry-level homes. Palo Alto and Los Altos, the more desirable and expensive of the cities, are still under 100% (Los Altos is at 98.21%, recovering from a glaring low of 93.56% in the beginning of 2009).

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The Average days on market is a good indicator of buyer demand and the overall health of the housing market. From the graph, we can see all four cities returning nearly to 2008 levels this quarter, with Palo Alto and Los Altos realizing the greatest second quarter drops. This is another signal that the market is shifting to a seller’s market, making it more difficult, once again, for buyers to get find a good deal.

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The median selling price can be used in conjunction to the earlier ratio graph. Palo Alto, Mountain View, and Sunnyvale, which are all near or above a 100% ratio, have median prices that are rising. Los Altos, however, is still far from a 100% ratio and its median sales price remains stagnate.

Currently all four cities are off second quarter results in 2008 by more than 5% — Los Altos is even more at nearly 13% under — so buyers can still expect to save money due to depreciated home values.

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The number of homes sold for each city has either nearly returned to 2008 levels, or surpassed it in the case of Mountain View, which is 50% higher this quarter than the same period in 2008. Part of the reasoning is traditionally more homes go on sale and are bought during the summer months. But this also a result of more sellers willing to sell their homes in a stronger market and a release of pent-up buyer demand.

Recommend Reading:

Comparing Real Estate Trends of Local Cities — First Quarter of 2010
Silicon Valley Housing Market Update – July 2007
Silicon Valley Housing Market Update – April 2007

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_{(single-family home data from MLS listings Inc.)}

Because Palo Alto has a wide range of home prices, the entry-level market remained strong as buyers looked for bargains and the high-end market slowly recovered through the second quarter of 2010.

The median sales price in Palo Alto is 5.3% lower than the same period in 2008, at $1,468,000. A huge jump of 82.2% from last quarter and just 5.5% lower than in 2008 was realized in total sales volume, at $205,188,388. Average days on market is just over a month and there were 123 sales this past quarter, similar to 2008.

Palo Alto holds its title as a premier housing market with the highest total sales volume of our four comparison cities, and will continue to become increasingly difficult for buyers to enter the market as the sales price to list price ratio continues its rise to 100%.

_{(single-family home data from MLS listings Inc.)}

Mountain View serves as a good example in our four comparison cities to see that the strongest competition after the housing crisis is for entry- and mid-range homes.

The standout numbers this quarter for Mountain View are 102 closed sales, 121.7% more than last quarter and 50% more than 2008; and $98.5 million in total sales volume, 136.3% more than last quarter and 35.3% more than 2008.

Median sales prices and average days on market are creeping towards 2008 levels. The sales price to list price ratio is just above 100%, meaning seller and buyer perceptions are balanced, though slightly in favor of the seller.