The Cupertino Courier

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Cupertino real estate prices expected to buck market trend

By HUGH BIGGAR

While the national and California real estate market is experiencing a sharp downturn, local officials say the impact on Cupertino residential sales should be minimal.

"In the short term it will have an impact, but in the long term it won't," said Marty Miller, Cupertino planning commissioner.

"I don't think [real estate sales decline] will have a major impact on Cupertino," said City Manager Dave Knapp.

According to the Commerce Department, prices for new homes have had their biggest drop in 35 years in recent months. As a part of that trend, in the Bay Area, median prices for newly built homes dropped by 12 percent in a year.

Both Knapp and Miller say Cupertino should buck that trend.

"The dominant factor is the quality of the schools, and in Cupertino, the schools aren't slipping," Knapp said, pointing to the well-regarded Cupertino Union School District and the Fremont Union High School District.

In part, the reputations of those school districts have helped drive the mean price of homes in Cupertino to roughly $1 million. Comparatively, the mean price of homes for sale in the Bay Area is about $584,000 and nationally about $220,000.

Even with the cooling of a previously hot real estate market, Cupertino's average home prices are likely to stay at the high end.

"In this area it's a supply and demand issue," said Miller, who works as a real estate broker. "There will always be more demand for housing, and home construction cannot keep up," he said, while adding Cupertino's school districts also continue to make it an attractive market for buyers.

Even so, for now at least, buyers are at an advantage in the usually tough Cupertino market.

"For the first time in a while, the edge is with the buyer," Miller said. "Sellers might have to make concessions or go lower than the asking price."

Miller also cautioned that the local real market could change if foreclosures increase or if the local economy worsens and more unemployment results.

"But it's not a dire market right now; homes are still selling," he said.