The Estates at Sunnyvale -- why do the prices keep increasing?

Asked by Douglass Mcneil, Palo Alto, CA Sun Jul 14, 2013

Based on the info on Trulia, the prices have increased 8 times since the beginning of the year...was listing in the high 1.3's...now listing in the high 1.6's

http://www.trulia.com/property/3099489175-The-Estates-at-Sun…

Why would they increase the prices by ~$300K in the span of 6 months? Are they actually selling? Is there interest/demand for these homes? Can't tell from the Toll Brothers website.

I know people really like new construction...and the homes seem to be reasonably good-sized (3000 SF)...but they seem ridiculously overpriced:

- Schools are Santa Clara Unified (not Sunnyvale SD, much less Cupertino Unified)
- Neighboring homes appear modest

Thoughts?

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Answers

11
Marcy Moyer, Agent, San Ramon, CA
Mon Jul 15, 2013
BEST ANSWER
Douglass,
The prices have gone up about the same percentage as the rest of Sunnyvale this year. 20=30% appreciation in 2013 is the norm for the Silicon Valley this year. the good news is that historically most appreciation happens in the first half the year and the second half has a much slower if any rate of appreciation. So it is unlikely that a similar home will be 300K more in Nov. However, The Estates of Sunnyvale are 84% sold out according to their website, so it is also unlikely they will still be selling them in Nov. Builders price to sell, so if the demand for a home is 1.6 that is where they will sell it.

As far as schools go, these homes feed into Ponderosa Elementary and Peterson Middle School. both of these schools are very popular and have API scores in the upper 800's. Other neighborhoods that feed into these schools also sell very well, despite having scores a little lower than Cupertino schools.

Marcy Moyer
Keller Williams Realty
marcy@marcymoyer.com
BRE 01191194
650-619-9285
Web Reference:  http://www.marcymoyer.com
1 vote
Tina Lam, Agent, San Jose, CA
Mon Jul 15, 2013
People are paying that much as it's the best overall deal available. If there were another better deal, they would have gone elsewhere.

Builders are only raising prices if they are able to sell at those prices. There would be no point for them to price their homes above market and sit on all of them.

If you think they're ridiculously overpriced, then you must know of a ton of better deals. In that case, please contact me. I can really use your input.
Web Reference:  http://www.archershomes.com
2 votes
Tina Lam - Was curious if you have you heard this quote from Oscar Wilde: “Sarcasm is the lowest form of wit”? As for for some better deals in Sunnyvale, you can type zip code '94087' in the MLS. Hope that helps.
Flag Mon Jul 15, 2013
Robert Lei, Agent, Cupertino, CA
Mon Jul 15, 2013
If you think they are overpriced, then I have a few suggestions:
1. Buy somewhere else. If you know of a better deal somewhere else, then be glad that so many of your potential competition are too busy trying to buy in the Estates. That makes it easier for you to quietly buy all those better deals that you know about.

2. Wait for the prices to go down. Right now they are going up. Typically new construction has a 10 year window for litigation. You have a good chance that 9 years from now the HOA may sue the builder. If you can wait that long and you think interest rates will still be good 9 years from now, then wait for that time to buy.

By the way,
3. Ponderosa Elementary of the Santa Clara Unified School District actually beats the majority of the elementary schools in the Sunnyvale Unified School District.
4. The home structure itself doesn't determine value as much as the location and desirability of the location. (Sorry about the typo. I'm typing this on a Windows8 laptop. Too much work to correct the typo.)
1 vote
Robert Lei, Agent, Cupertino, CA
Mon Jul 15, 2013
Why would they increase the prices by ~$300K in the span of 6 months?
RL: Because the supply of land to build on is decreasing while buyers demand for housing is increasing. Because the overall Silicon Valley real estate market appreciated approximately that same percentage during that time span.

Are they actually selling?
Yes. They wouldn't increase the price unless they were selling.

Is there interest/demand for these homes? Yes. Of course there's interest. Obviously,
1 vote
Terri Vellios, Agent, Campbell, CA
Mon Jul 15, 2013
Supply and demand. There is not enough inventory to keep pace with what buyers are willing to buy. Buyers set the final closing price. Those who have been in the market, seen what is available, compare one to the other, then decide what they are willing to pay.

Builders set their initial opening lower and then increase as demand will bare.

If you are not comfortable purchasing at that price then don't. You can wait and see what happens. There is no better illuminator than hind site. Some people win at that and more people lose. Only you can decide.
1 vote
Ivy Magsaysay, Agent, Sunnyvale, CA
Sun Jul 28, 2013
Prices are up because there are willing buyers who want to pay for it. Keep in mind the price of the homes is really determined by the buyers, list price is a suggested price. Want and desire to have it is really a driving force because it meets the needs and requirements of the buyers. How much is it worth really to you and me is why people pay for the price.

Ivy Magsaysay
Century 21 M&M & Assoc.
ivymag@c21mm.com
408/431-1249
0 votes
jnk3888, Home Seller, Brooklyn, NY
Mon Jul 22, 2013
yes it is a matter of supply and demand. However, when you are the only one one the demand side who is willing to pay that kind of money, you put yourself in a precarious position.

Don't be caught by the frenzy. Buyers or potential buyers should keep a cool head. Drive and walk around the neighborhood (multiple times) to decide if $1.6M is the right price for the location. More importantly, ask the question: if you were to unload the property tomorrow, is there a POOL of willing buyers (not just one) who is willing to pay at least the price you have paid.
0 votes
Douglass Mcn…, Home Buyer, Palo Alto, CA
Mon Jul 15, 2013
Thanks everyone for all the perspectives.

I still think they're pretty overpriced. FYI, I am not interested in these homes. I am just trying to understand the market dynamics.

In that price range for Sunnyvale, I would be looking at the 94087 zip code. Homes there have better schools, more desirable neighborhoods (as measured by home values of the surrounding area homes), equal or bigger lot sizes. 1336 Drysdale St and 1520 Wright Ave are examples -- comparable SF, much bigger lots, Cupertino schools.

I think if you are OK with Santa Clara Unified, you could probably get deals within Santa Clara city limits.

My $0.02
0 votes
Robert Lei, Agent, Cupertino, CA
Mon Jul 15, 2013
Trulia also shows the closest comparable as this one:

Address Distance Property Type Sold price Sold date Bed Bath Sqft
856 Maria Ln, Sunnyvale CA 0.99 mi Single-Family Home $1,585,000 3/21/13 3 1½ 1,672

Notice it only had 1½ baths and 1,672 sf but sold for $1.585M back on 3/21/13.
0 votes
David Allen…, Agent, Sunnyvale, CA
Mon Jul 15, 2013
Crazy I know but the reason why is because they can?
0 votes
Elena Talis, Broker, Palo Alto, CA
Mon Jul 15, 2013
The prices are going up because there is not enough homes coming to the market to satisfy the demand and the economy in the Silicon Valley is doing pretty well...
Web Reference:  http://talisrealestate.com
0 votes
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