DeLeon Realty’s 2015 Quarter One Menlo Park UpdateApril 3, 2015
Like most of the Bay Area, the housing market in Menlo Park for the first quarter of 2015 has seen an increase in home values, however inventory levels are continuing to decrease. Year to date, Menlo Park has seen 79 single family residences enter the market which is a 17% decrease from this same time last year however, the median price for a home in Menlo Park is on the rise as it has been over the past several years. Year to date, the median price for a single family residence in Menlo Park is $2,400,000 which is an increase of 28% last year. This rate of appreciation is even more impressive considering that in 2014 there was 24% appreciation!
While Palo Alto out appreciated Menlo Park in 2009-2013, Menlo Park has now become the shining star of Silicon Valley for appreciation. One of the large drivers of this is the continued success of Facebook stock, rising over 300% in the last 2 years. With Facebook doubling down on Menlo Park as their headquarters with their recent $400 million purchase for an adjacent 56 acres, Facebook continues to add to Menlo Park’s prestige, property taxes, and its close proximity to neighborhoods such as the Willows and Menlo Oaks has been a boon for those neighborhoods. I forecast that Facebook stock will continue to do well as they have figured out mobile advertising better than any other company so look for Facebook’s continued expansion and hiring growth, fueling stock option down payments of their employees who often seek to live in Menlo Park.
Looking back 10 years, Menlo Park has seen some amazing appreciation. In 2006, the median price of a single family residence was $1,260,000, just over half of what it is today. All neighborhoods have seen double digit appreciation over the past decade with the greatest appreciation being for lower priced neighborhoods, such as the Willows, leading in appreciation. I remember just 2 years ago when I sold the second highest priced home in the Willows for $2.3 million. A new benchmark of $3.8 was just reached and new ceilings are being created every month. We continue to be bullish on the following neighborhoods: The Willows, Menlo Oaks, Central Menlo, Allied Arts and West Menlo and forecast relatively lower appreciation for Sharon Heights and Flood Park.
A few other noteworthy sales include:
940 Cotton Street in Central Menlo selling for $6.65 million to an all cash buyer. This 4,000+ sq. foot newer home on a 20,520 sq. foot lot came very close to my record sale of $7.625 million, which surely will be topped this year, hopefully by myself. Stay tuned for that update.
440 Arlington in Menlo Oaks, a borderline teardown on a 20,000 sq. foot lot that sold for $3.2 million. This home would have sold for $2.2 million just a few years ago.
776 Cambridge in Allied Arts jumped over $500,000 and sold for $1,300 per sq. foot even though it was on a lot of less than 7,500 sq. feet. The old adage of prime Menlo Park selling for $1,000 per sq. foot needs to be revised upward.
Several factors are driving these record home sales. One of the main factors are the uniformly strong elementary and middle schools. The Menlo Park School District and Las Lomitas School District continue to post API scores all at or over 925, a distinction not even Palo Alto can claim. Another factor is the economy. Menlo Park is home to Venture Capital Firms, the Stanford Research Institute, and other tech companies in addition to Facebook, which all fuel the economy.
Diverse neighborhoods, location, economy, and the school districts all make Menlo Park a highly desirable city to live in with even more opportunity for appreciation. To illustrate my belief in Menlo Park, I recently sold one of my Palo Alto investment properties and purchased 2 homes in The Willows.
We forecast a strong second quarter along with a strong 2015 overall. The second quarter traditionally offers more inventory to choose from and pent up buyer demand from the first quarter will continue to push prices upward, although at a lower rate than this pop we have seen in the first quarter.
If you would like to learn more about the dynamics and nuances of what trends are causing inventory to decline and consequently prices to rise, please watch my first quarter update on the overall Silicon Valley market, or reach out to me or my Menlo Park Specialist for more information.