Palo Alto CA Home Prices in the Wake of Santa Clara County School District Consolidation Discussions

There was an article in this morning’s Mercury News about a grand jury investigation into Santa Clara County’s school districts and what to do about soaring deficits while keeping the level of education from suffering. The recommendation was to combine feeder elementary districts with the high schools that they feed into.  

So, for example, they recommend combining the Whisman/Mountain View and Los Altos elementary districts with Los Altos and Mountain View High Schools.  They also recommend the same for Saratoga and Los Gatos.  On the surface, while one can argue the merits of one big district vs smaller districts, both from an educational and financial stand point, these combinations do not stand out to me as having a huge change in what parents perceive as quality vs non quality education.  I'm not saying there would not be some level of concern, but I don't think that these consolidations would cause great panic.

However, I believe that just the talk of combining the Fremont Union School District with both Sunnyvale and Cupertino Elementary Districts could send shock waves through the real estate community.  Anyone in this area is aware of the desirability of the Cupertino School District.  Buyers pay huge premiums to be in the Cupertino district. If the district is combined with the Sunnyvale Elementary district fear might arise that the quality of education will be diluted.  I'm not sure I believe that, but what I believe, and even what would actually happen, is irrelevant. 

The worst thing for real estate values is uncertainty.  When buyers don't feel comfortable with what will happen in the future they don't open their pocketbooks.  The proposed high speed rail is a great example.  People have been buying homes next to Cal train tracts for decades and they trade the known noise for a lower price. Now that there may be a high speed train, and no way of predicting how that train might disturb the area from a visual or noise perspective, selling a home near the tracts is almost impossible. 

It's the uncertainty that is paralyzing home buyers.

So the point of this post is that Palo Alto already has a unified school district with K-12 in the same district.  There will be no talk of changes here.  Since it's a known rather than an unknown quantity,  like the other districts, I think that Palo Alto will look even more attractive to buyers looking for good schools for their families and who are not comfortable with possible changes. 

As I said, just talk of possible changes is enough to spook buyers in this very fragile housing market.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

Los Altos is Wealthiest City

Forbes.com just released a list of 20 cities with the highest income in the country, and our own Los Altos came in third, with a medium $158,745. They came in behind South Lake, Texas and Darrien, Connecticut. Saratoga came in thirteenth with a median income of $137, 270 and Danville came in twentieth with a median income of $126,797.

Besides having many owners with great incomes, Los Altos has very few renters, not too many smaller condos, and most homes are on very large lots. Since land value is so much higher than house value it costs more to buy a home per square foot in Los Altos than in many places, like neighboring Palo Alto, which tends to have smaller lots. For example, many tracts from the 50's in Los Altos are on 10,000 square foot lots, while similar tracts in Palo Alto are on 6,000 square foot lots, so if you have two similar home in size, condition, and age, the home in Los Altos will probably cost more than in Palo Alto--simply because of lot size.

One interesting difference is that if your goal is to move to Los Altos because of the schools, you can move to certain parts of Mountain View that are in Los Altos school district and buy a less expensive home, often on a smaller lot, and still get the Los Altos school district.

This plan is not possible for Palo Alto. The only homes that feed into Palo Alto schools are the ones in Palo Alto, with the exception of a small slice of homes in Los Altos Hills, which is not less expensive than buying in Palo Alto. 

Please contact me if you have any questions about homes or schools in Los Altos, Palo Alto, or Mountain View.