Like clock time, home prices march forward. In Silicon Valley, the march is mostly uphill, and some of those hills are quite steep. In looking at the movement of prices on single-family homes in 12 communities, we find that only one community saw home prices drop from May 2014 to May 2015. The other 11 continue their march upward. Let’s look at the differences in May home prices. The largest price gains were found in Mountain View, where the median sold price of homes went from $1,375,000 in May 2014 to $1,860,000 this past May, an increase of 35%.
Next in line is Woodside with a 31% increase, going from $2,311,250 in May a year ago to $3,037,500 in May 2015.
Substantial year-over-year price gains were seen in four other communities: Palo Alto (+24%), Redwood City (+23%), Portola Valley (+22%), and Sunnyvale (+21%). Here are those numbers, showing the May 2014 price vs. the price in May 2015:
• Palo Alto: $2,221,500 vs $2,750,000 • Redwood City: $1,182,750 vs $1,450,000 • Portola Valley: $2,165,000 vs $2,640,000 • Sunnyvale: $1,200,000 vs $1,451,000
Less-dramatic increases showed up in Atherton, Los Altos and San Jose. In Atherton, the home price rose 13%, from $4,250,000 to $4,810,000. Los Altos went from $2,350,000 to $2,612,500 for an 11% gain. In San Jose, the price increased 10%, from $775,000 in May 2014 to $851,000 in May 2015.
The smallest price gains were found in Menlo Park and Cupertino. Menlo Park posted a gain of 7% with a price increase from $1,875,000 to $2,003,000. Cupertino showed the smallest gain, from $1,800,000 to $1,885,000, or 5%.
The only community among the 12 we’re looking at to experience a drop in median home price was Los Altos Hills. Here the price went from $3,300,000 in May 2014 to $2,926,000 a year later, a decrease of 11%.
Comparing the same months in successive years helps us get a feel for the direction prices in a given community are headed. Keep in mind that in smaller cities and towns where fewer homes are sold, the sale of a few particularly expensive or unusually inexpensive homes can skew the numbers somewhat.
But regardless of any slight skewing, one thing is clear: overall, prices are going up, as they’ve been doing for several years. Will it slow down when the rumored upcoming Fed interest rate hike is instituted? It’ll be interesting to watch how the market is affected when this happens.