We continue to see strong and healthy price increases across Silicon Valley. Which Silicon Valley cities had the highest price increase percentages for single-family homes in 2016? Let’s look at the top 10 in consecutive order.
Woodside tops the list with an +8.2% increase in median home sales price at $2,980,000. Last year’s median in Woodside was $2,755,000. San Jose comes in second with a +7.2% increase and a 2016 median price of $895,000 vs. $835,000 in 2015. Sunnyvale’s median sales price in 2016 is $1,495,000, +6.8% higher than its 2015 median sales price of $1,400,000. The median price in Los Altos Hills hit $3,850,000 in 2016 vs. $3,612,500 in 2015, increasing by +6.6%. Menlo Park came in fifth with a +6.2% increase and with a median sales price of $2,150,000 vs. $2,025,000 in 2015.
Nationwide, home prices rose a total of +5.1% this year. Redwood City came in just above the national average at an increase of +5.4%. Redwood City’s median sales price hit $1,401,500 vs. $1,330,000 in 2015.
The four remaining cities, San Carlos, Burlingame, Saratoga and Portola Valley, show a median sales price appreciation for single family homes shy of the 5.1% national average increase. The specifics for these cities are San Carlos at $1,679,000 in 2016 and $1,600,000 in 2015 for a 4.9% increase; Burlingame for a 4.1% increase in 2016 at $2,032,500 from $1,950,000 in 2015; Saratoga at $2,366,266 in 2016 and $2,300,000 in 2015 for a 2.9% increase; and Portola Valley at $2,707,500 in 2016 and $2,633,000 in 2015 for a 2.8% increase.
Real estate markets are driven by local fundamentals more than national trends. They are first and foremost built upon the principle of supply and demand. The higher/lower supply of single family homes and the higher/lower demand of those homes are key elements to the pricing of those homes. In Silicon Valley, inventory of single family homes (supply) is at historically low levels. Our top 10 cities on this chart reflect the realities of that low inventory in their respective percentage increases of price appreciation. We anticipate seeing this low inventory to continue well into 2017.
Looking on the demand side of the equation, generally speaking, steady job growth with an upward economic trajectory leads to more population growth which then, in turn, drives residential housing demand. Additional catalysts to higher demand include new infrastructure such as new and/or expanded roadways and new/improving schools offering the continuing promise of quality education.
Remember to include great weather in the demand mix! When it’s freezing in the midwest or on the east coast during the winter and/or sizzling at +110 degrees in the southwest during the summer, Silicon Valley’s consistently temperate weather looks pretty terrific.
*All data referenced above is provided by MLS listings. This information is deemed reliable but not guaranteed. It is not intended to be used as investment advice.