Valuation for SFH next to top schools

I am looking at a house in Cupertino (Monte Vista neighborhood) that is almost literally in the center of 3 schools. Other than that, neighborhood and the house is great. How should I objectively factor that into my valuation?

Also, the seller agent implied she is expecting $3.4M to $3.5M, do you think it’s fair given current market?

I have a friend who lives in this part of Cupertino near Monta Vista High, in a similar 2000 sq ft + SFH (he rents it though). This is the very best best area of Cupertino, really nice neighborhood. Mid $3Ms seems to be a fair value in today’s market.

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Some people actually prefer being behind school – however, you will have some children playing sound during school times. During appraisal near school is considered negative and you will see some deduction (50 to 100K for that). We currently live behind elementary school park, and we like the children noise. However, near high / middle can have a lot of noise depending on the ground and if they have games. So need to check that.

Regarding the current expectation, unfortunately things have sky rocked and don’t see any logic behind this. I do see some articles saying slow down is coming. However, given interest rate is low 3 to 3.5M market is still hot in bay area (though I hear that number of offers is going down). May be once the school rush stops, you may see a slight cool down.

IMHO will not pay 3.4 / 3.5M for that and wish we have more folks right that.

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I would pay 3.5 for this one instead. But depends on if you are set to Cupertino.


Believe it or not, the best value in RBA today is actually Palo Alto. Why pay PA price for Cupertino or Sunnyvale? Haven’t heard much about Santa Clara these days. How’s it doing?

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Yeah. Better option. But this may be overbid crazily as well in this market.

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A search on Redfin for SFH sold within past 1month in “Monta Vista” returns 21 houses sold, ranging from $2,320,000 - $4,450,000. The median is exactly $3,000,000.

So, I stand corrected. Maybe the house being considered by @silvermember is worth around $3M, rather than mid-3Ms.


Yeah… 3M is about right or even 2.9M given it is super near to all schools

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Summarizing some discussion above, seems like

  1. This close to school is generally negative, @spacehopper quantitatively belief assessor would consider this $50k to $100k lower in value
  2. This is a nice neighborhood in Cupertino, but a few seems to think Palo Alto is a better option. (@manch what’s “RBA”? Real Bay Area?)

I consider Cupertino for it schools and beautiful neighborhood. I would love to buy in Palo Alto, but square-footage-wise PA it’s even more expensive.

The overbidding is crazy in Monte Vista area, holding other things constant, just 2 months ago $1400/sqft could buy a polished house, now that is hitting $1500. New listings basically price based on previous weeks solds, and there’s no sign of slowing down…

I don’t mind waiting, my only fear is things are gonna get worse…

Yeah, “RBA” means “Real Bay Area”, unofficially referring to the 101-corridor between SF and SJ.

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If you don’t have a constraint for closing before school, you will see some seasonal cool off in Aug / Sept (especially in school-centric neighborhoods). I hear you – things have increased drastically in the last 6 to 8 months in this neighborhood.

FYI assessor impact is $50K for my home backing to elementary school. In this case, not sure what KMS track is and if they will have loud weekend games. I would worry more if this bothers you or not rather than the assessed impact


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Thanks for the insights! I will seriously consider waiting until the seasonal cool off! I just worry the low supply will cancel out that effect :sweat_smile:

I agree that the bigger concern about being close to school is how much it would bother me rather than assessment value. In fact, the owner disclosed that the house is by 3 large schools, noise and congestions are expected during and after school hours. My wife and I are trying to rationalized through, but I feel we might have underestimated the noise and congestion… We just cannot imagine how bad it is…

My 2 C, it’s really hard to time the market and predict the future. You should buy when you’re ready.


The home you linked is fine, but worth waiting for 6 months.

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Though I agree that one cannot time the market, they should be convinced on the value that they are getting and also ensure that it serves their goal. I keep hearing some slow down is coming up on real estate – low interest rate, and pent up demand from last year kind of spiked up the prices. This cannot sustain and we should see more buyers feeling FOMO and list. Once inventory picks up, it should cool down. Again none of these is guarantied and if one can afford to wait / watch / act, it may be good.

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Do you have school-age children?
If so, I think the location is actually a plus to you.
There may be noise and traffic, but the benefit would outweigh them.
Living within walking distance from all 3 schools is a huge benefit to the family with school-age children.
That’s why people usually call such neighborhood as golden triangle.
On the other hand, the PA home that Boolean referred is located close to commercial area. I wouldn’t prefer that neighborhood over this one.

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Thanks all for the insight!

@Jane: My child is still few years from elementary school, but you are exactly right, proximity to these schools are huge plus (though I hope the house is slightly more away).

@spacehopper, @Jil: You suggested to wait a little. I know no one has crystal ball, but just a ball park, how much drop are you expecting? ~2%, ~5%, ~10%, ~20%?

Hard to predict, esp cupertino, I do not have anyway to calculate percentage of increase or drop in future.

If stocks tank, we get into recession that will reflect in real estate! In the event recession, the world will change upside down, you will be reaping the benefits. IMO, waiting until Dec will give you clarity. There are possibilities you may get benefits of less competition but nothing guaranteed.

This is a very risky and speculative business. Past history has taught us that both stocks and Bay Area real estate tend to rise 80% of the time, with short bouts of sharp decreases in between. Waiting for those decreases is akin to gambling.
For a $3M home, the buyer needs a substantial down payment (~ $1M). Is this in stocks? If so, then the down payment will also dwindle if stocks tank, and buyer may not have the heart to purchase a home in such a recessionary environment.

IMO, it is better to buy now if one has:

  1. required down payment
  2. necessary income to support the substantial monthly payments - for a $3M home with $2M loan @ 2.75%, PITI is a whopping $11,200 per month.
  3. needs the house for growing family and is willing to hold for at least 10 years

In 10 years, the house bought today for $3M will very likely be worth $5M at least


@silvermember As many has provided insights, it is hard to predict what happens in future. Only thing I would hope for is a seasonal cool off => you may not have to overbid crazy + get a reasonable deal on the house you are buying. The downside is nothing to your liking shows up. An investment like this is long term (at least 10+ years) – hence, any short term fluctuation (or even a full scale recession) should not bother you & should be able to ride that.