Silicon Valley Real Estate: Cupertino

This post is the first in our Silicon Valley Real Estate series where we plan to investigate the current housing market conditions and important related details for each town in Silicon Valley. Real Estate markets are best described locally, we always say, so this series will let us investigate price trends, supply and demand, and any other interesting tidbits we learn along the way. Today's focus: Cupertino, California.

Quick Intro to Cupertino:

Cupertino sprang up in the 1950's population boom in Santa Clara county. The city of

50,000 is nestled at the base of the Santa Cruz mountains just west of San Jose. It boarders Saratoga to the South, Los Altos and Los Altos Hills to the Northwest, and Sunnyvale to the North. Cupertino is home to a bunch of Silicon Valley greats, notably Apple Computer.

Cupertino Schools:

The Cupertino school district is known to be among the best in Silicon Valley. (Real estate prices reflect this fact. see below.) Heck, Cupertino schools are easily among the best in the country. The three high schools, Cupertino, Monta Vista, and Homestead, all score in the 90th percentile of performance on math and English tests. Monta Vista is actually the 100th percentile for math scores. Want to know what a school looks like when everyone's parents are successful engineers? Go check out Monta Vista.

Cupertino Demographics:

The city is, not surprisingly, wealthy. The median household income in the Cupertino elementary school district is $200k. The city is home to a large population of Asian descent. Cupertino, Monta Vista, and Homestead schools are 47%, 65%, and 30% Asian. Mostly Chinese, but in the last 10 years or so a growing Indian cohort too. I suppose if you lump India and China together under "Asian" then most of the world is of Asian decent. For whatever that's worth.

Cupertino Real Estate:

Silicon Valley real estate gets more pricey the closer you get to the mountains on the Valley's western side (but not too far up! Those mountain roads can be treacherous.) Cupertino home prices are no exception. In fact, because Cupertino has fewer properties in the hills than Saratoga to the south or Los Altos Hills to the northwest the median home price is significantly lower.

The median home price in Cupertino this week is a cool $1.28 mil. (Yes, that is significantly lower than Saratoga or the Los Altoses.) Down a bit from their peak earlier in the year.

In spite of a generally weakening Silicon Valley real estate market, housing demand (and thus prices) in Cupertino has remained relatively robust this year. We measure demand relative to the available supply with our Market Action Index. Housing demand in Cupertino has clearly fallen since last year at this time, but appears strong enough to keep the good properties moving quickly.

We attribute this resilient demand to the combination of factors that include high desirability (schools, proximity, employers noted above) plus the fact that Cupertino real estate prices weren't as stratospheric as its neighbors to begin with. Not too low or too high... just right. I have some friends who just stepped up to a cool Eichler in Cupertino. They had to choose between the Eichler in Cupertino or one for slightly less money in Sunnyvale. As two successful professionals, trading up from their starter San Jose townhome to a bitchin' Atomic Ranch, the Cupertino option was a no brainer. The data seems to indicate they are not alone, even in a rapidly cooling market.

Inventory of homes for sale in Cupertino is just about the same as last year. Around 100 single family homes are currently on the market. Silicon Valley real estate inventory in general is greater by about 20% over last year at this time.

Conclusion:

Cupertino seems to be weathering the early stages of the weakening housing market better than most of the Silicon Valley real estate market. Pent up demand for the great school district would appear to keep prices steady. As new buying opportunities arise, a line of young families appear ready to step in.

As always, complete Cupertino real estate market research available here.