Crazy Silicon Valley real estate: Homes routinely selling for $200,000 or more over asking

What’s the deal, Silicon Valley? Six months ago, there was widespread talk about the flattening of the housing market. That conversation is ancient history.

As an example, Alain Pinel agent Mark Wong sent out an email blast this morning with this news: Almost 60 homes, mostly in Sunnyvale and Cupertino, sold for $200,000 or more over asking in the last 30 days. And we’re not necessarily talking about fancy schmancy places; the modest Cupertino home in the photo above sold for $660,000 over asking.

It’s a snapshot of just how nuts the market has become as motivated buyers fight over a limited number of homes. The competition is especially fierce in Sunnyvale, because of its proximity to the new Apple spaceship campus, and Cupertino, which is perennially hot because of the excellence of the schools.

Randomly, here are a few of the numbers in Wong’s email:

A home at 1051 Heatherstone Ave. in Sunnyvale listed at $1,888,000 and sold for $2,370,000 — $482,000 over asking. A house at 553 Croyden Court in Sunnyvale listed at $1,998,000 and went for $2,450,000 — $462,000 over asking. A townhouse at 982 La Mesa Terrace in Sunnyvale listed at $1,099,000 and sold for $1,400,000 — $301,000 over asking.

For a townhouse.

“The listing price doesn’t mean anything anymore,” Wong commented. “It’s just a number.”

He went on: “Most of the agents, they love to list under the fair market value, so that’s why it creates an auction-style sale. The buyers are smart people. They look around. And when they see a property below the fair market value, they think they’ve found a good deal and they’ll jump on it. Then everybody jumps and it bids up the price.”

He says the strategy can get tricky: “If you price it a lot below the market value — too far below — then sometimes it backfires and you can’t get it back up to the right value.”

The strategy seems to have worked perfectly well — at least for sellers and their agents — at the homes on his list.

Picking randomly from Cupertino addresses, here are more examples of “way over asking” sales: A house at 18625 Ralya Court listed at $1,299,999 and sold for $1,622,500 — $322,501 over asking. A house at 10384 N. Portal Ave. listed for $1,788,000, then sold for $2,160,000 with 11 offers — $371,200 over asking.

Moving over to West San Jose, Wong mentioned a house at 5244 Shady Ave. that listed for $1,298,000 and sold for $1,716,000 with 18 offers — a cool $418,000 over asking.

Photo: A home in Cupertino that listed for $1,600,000 and sold for $2,260,000 — $660,000 over asking. (Courtesy Mark Wong/Alain Pinel)

 

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  • Dan

    Who is paying this kind of money for these houses?

    • jimgriffith

      Supply and demand. There’s no supply and a huge demand. In Sunnyvale, maybe three single-family homes go on the market in a given week, with 20 or so eventual bidders on each one.

    • Buffarms

      People who keep electing politicians that won’t authorize new home projects
      .

      • Josh Smith

        New homes means more cars to clog the already clogged city streets. And on weekends, better get away early or you’ll be stuck in traffic trying to leave the area.

        • Buffarms

          We will solve that issue in the next decade or two. Between automation and delivery services, you wont be going out as much, and when you do automated systems will make it quicker and safer.

          Yet technology can’t solve housing issues if you can’t build new units.

    • Reed More

      People who have received big restricted stock allocations as a hiring bonus. They put their bonuses in savings and collect the stock proceeds over 4 years and then use this for a significant down payment.

      Had a company give me options when I was hired… they expired before they were worth anything. It’s a crap-shoot.

  • Freddie Drumpf

    Well the rest of us are just suckers

  • another_programmer

    People’s houses is generating as much appreciation as a tech income. Amazing stuff. It’s like a triple income family.

    • RoadWarrior

      It won’t last forever. What goes up must come down, i.e. 2008. My brother lives in Thousand Oaks. He retired briefly as his home value soared. Then the bottom fell out of the housing market. He had to un-retire and is still working today. He is about to get the hell out of California. The kids have already graduated from college and gone. HIs next door neighbor fell behind on his mortgage and had to foreclose. He packed up and left the state.

  • RoadWarrior

    Housing cost is driving the middle class out of California. Who’s going to pay all the taxes?

    Mercury News: “For every home buyer coming into California, another three are selling their homes, packing up and moving out.”

    http://www.mercurynews.com/2016/11/14/californians-fleeing-high-cost-of-housing/

    • Jo

      Are there vast quantities of vacant homes? No. So someone is buying these houses, which means someone is paying taxes.

      • RoadWarrior

        Homes in the Silicon Valley remain occupied because of a shortage of housing in the area. People with less income are giving up their houses and moving further away from work. The loss of tax base is outside of Silicon Valley. That’s what the Mercury article I linked was about. Say what you like, but the data shows the number of people moving out of the state versus the ones moving in is 3 to 1. The only reason the state manages to maintain its population and its electoral votes is illegal immigrants. The last I checked, the state’s Hispanic population is just short of 40%.

        The bubble is about to burst.

        Mercury News: “Warning signs Silicon Valley cannot ignore”

        http://www.mercurynews.com/2017/05/28/commentary-warning-signs-silicon-valley-cannot-ignore/

      • RoadWarrior

        Homes in the Silicon Valley remain occupied because of a shortage of housing in the area. People with less income are giving up their houses and moving further away from work. The loss of tax base is outside of Silicon Valley. That’s what the Mercury article I linked was about. Say what you like, but the data shows the number of people moving out of the state versus the ones moving in is 3 to 1. The only reason the state manages to maintain its population and its electoral votes is illegal immigrants. The last I checked, the state’s Hispanic population is just short of 40%.

        The bubble is about to burst.

        Mercury News: “Warning signs Silicon Valley cannot ignore”

        http://www.mercurynews.com/2017/05/28/commentary-warning-signs-silicon-valley-cannot-ignore/

    • Jo

      Are there vast quantities of vacant homes? No. So someone is buying these houses, which means someone is paying taxes.

  • RoadWarrior

    Housing cost is driving the middle class out of California. Who’s going to pay all the taxes?

    Mercury News: “For every home buyer coming into California, another three are selling their homes, packing up and moving out.”

    http://www.mercurynews.com/2016/11/14/californians-fleeing-high-cost-of-housing/

  • omegatalon

    These individuals give the impression that they’re open minded; but they’re not and unwilling to think out of the box and paying $200K over asking says they all want to live in the same community instead of buying homes out of the area like East San Jose or East Palo Alto as they can get homes for practically nothing and change the entire environment.. as this is what has happened in San Francisco’s Mission and Tenderloin as these neighborhoods that people stayed away.. and has changed dramatically over the past decade as people began buying up property and building new multi-million dollar condos.

  • Thuy Go

    The EB-5 investor visa has a lot of outside wealth pouring into the market. Good education, Good weather, and a diverse area with a lot of friendly ethnic enclaves. Who wouldn’t want to take this opportunity to get your family’s foot in the door of “The place to be”

  • Thuy Go

    The EB-5 investor visa has a lot of outside wealth pouring into the market. Good education, Good weather, and a diverse area with a lot of friendly ethnic enclaves. Who wouldn’t want to take this opportunity to get your family’s foot in the door of “The place to be”

 
 
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