Schools

San Mateo County Real Estate Market Update - First Quarter 2014

Here's an update on the San Mateo County real estate market for the first quarter of 2014. This single family home comparison is organized by school district with API score, including the median price, average $/sf, average days on market, and changes from the first quarter in 2013 and 2007.

Hope this provides some helpful insight as a buyer or seller.  

Mountain View Whisman School District Tour – Looking Deeper than API Scores

At the end of October, four of our real estate agents from Rainmaker Properties went on the Mountain View Whisman School District “Get on the bus tour” to learn more about what the local schools offer besides strong API (Academic Performance Index) scores. Homebuyers, along with real estate agents, tend to put a strong bias on high API scores, especially since good schools can translate into better priced homes. But in cities like Mountain View, where the majority of the school district is either at the state API goal of 800 or above, we can start to consider other factors in the makeup of a school to see if it is the best fit for a child.

2009 Santa Clara and San Mateo County API School Scores

2009 Santa Clara County API School Scores
2009 Santa Clara County API School Scores

September is the time of the year when the California Department of Education releases its yearly Academic Performance Index (API) scores. Here are the 2009 Growth API Scores for Santa Clara County and San Mateo County

We see an overall steady increase in scores compared to last year's growth API scores.

A few notables in the following Silicon Valley Santa Clara County school districts:

Berryessa Union Elementary School District: Ruskin Elementary School continues to lead the pack and breaks the 900 barrier with a general improvement in most of the schools in the district

Cupertino Union School District: Continues to have a plethora of high achieving schools (Murdock-Portal and William Faria Elementary School and Joaquin Miller Middle School)

Fremont Union High School District: Monta Vista High increase it's lead over Lynbrook High School from four to nine points.

Los Gatos Union Elementary: Significant increase across the board for most elementary schools

Moreland Elementary School: Leroy Anderson Elementary takes one of the largest increases in scores by an increase of 136 points to 810

Palo Alto Unified: Herbert Hoover and Duveneck Elementary Schools continue to lead the way

Santa Clara Unified: Overall Santa Clara schools had good improvement with notable Rivermark's Don Callejon as well as Westwood and Briarwood Elementary jumping nearly 40 points.

Sunnyvale School District: Cherry Chase increases 28 points to an impressive while Cumberland drops 26 points to 905

Check out our previous post to find out what's the difference between Growth and Base API scores and how they are calculated.

Bay Area High Schools in Nation's Top 100: US News and World Report

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US News and World Report published its list of best high schools and according to the report, the looked at "more than 21,000 public high schools in 48 states" to come up with a list of the top 100.  Three Silicon Valley high schools made the list:

73.  Monta Vista High, Cupertino

74.  Henry M. Gunn High, Palo Alto

80.  Saratoga High, Saratoga

These awards were based on how well-prepared students are for college as measured by Advanced Placement (AP) tests. 

California, as a state, did very well in the rankings, placing #4 out of all rated states --- this means that out of all the high schools rated by US News and World Report, California has a higher percentage of silver and gold medal recipients than all but three states, based on the same criteria above. 

Of California's 1,999 high schools rated, 126 (6.3%) received silver or gold.  The number one state, Massachusetts had 338 high schools rated and 29 (8.6%) silver and gold medalists.

US News' rating by AP score is different from California's standardized testing and Academic Performance Index (API), which focuses on California's own standardized tests.  It's no surprise that Bay Area high schools Monta Vista, Gunn and Saratoga each have API scores that are some of the best in California, exceeding 900 (out of 1000).

2008 Growth API Scores Released

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The California Department of Education has released its 2008 Growth API scores for Santa Clara County and San Mateo County, which measure yearly improvement from the state's 2007 Base API scores. The API (Academic Performance Index) scores are considered the cornerstone of California's Public Schools Accountability Act of 1999, and measure the academic performance and growth of the state's schools according to a range of academic factors.

The Los Altos, Saratoga, Cupertino, and Palo Alto elementary school districts all maintained district API averages above 900, an excellent score (which is par for the course in these districts).

The competitive Cupertino Union schools improved from an already-elite score of 930 to 941, and its border school Stocklmeir Elementary --- which students who are living in Sunnyvale can attend --- notched up 13 points to 959. To offer some perspective as to the strength of these scores, the average state API for all grades is 742, up from 728 last year.

This year's score report also reflects improvements at both Cumberland and Cherry Chase, the two top elementary schools in Sunnyvale. Both broke the 900 mark once again, with respective scores of 920 and 909.

Also emerging are up-and-coming schools to watch. Take Ellis Elementary in Sunnyvale, which entered the 21st century with a score in the mid-700s and now consistently scores in excess of 800. This year, Ellis improved 17 points with a score of 831.

The Campbell Union Elementary District's Forest Hill is another school on the move. At a 2008 score of 888, Forest Hill is inching closer to breaking the 900 barrier. Up from 879 last year, Forest Hill was a low-800s school in 2000. We'll continue to keep an eye on these continually improving school systems as they maintain their march up the API ladder.

Santa Clara County School District Ratings: 2007 Base API

California's 2007 Base API scores have been released and, looking at the complete list of Santa Clara 2007 Base API scores, congratulations need to go to Los Altos, Saratoga, Cupertino, and Palo Alto elementary school districts for maintaining district API averages above 900.  While this is par for the course in these districts, to put this achievement in perspective, the overall state API for all grades is 728.

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There are two other metrics in the report, statewide rank and similar schools rank, both ratings from 1 to 10.  Each number represents a decile, with 10 being the top 10% of all schools in that category.

This metric compares schools that have similar characteristics, based on ethnicity, socioeconomic status, teacher credentials, and (about a dozen) other factors.  So which number matters more: the state or similar schools rank?

By far, the state number.  Let's look at some of the Cupertino Union figures for examples. 

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The third column is the state ranking and the fourth is for similar schools: Blue Hills is 10/8, Collins is 10/7, and DeVargas is 8/2.  Eisenhower and Muir (not shown) are both 10/2 with API scores of 906 and 894 respectively.

The difference in API between 10/8 and 10/7 is only 10 points, but the difference between a 10/2 and 8/2 is about 60 points.  The reason is because schools that are alike tend to have similar performance.  When you group those schools together and rank them, some turn out to be the best of the group and others the lowest-rated of the group.  

So if a 10/10 school is the best of the best, should parents be worried about a 10/2 school like Eisenhower or Muir elementary?  There is room for improvement, but a 10 means the school is in the top 10% of all schools in California.  At that level, I'd be more focused on what programs, classes and activities a school has to offer than beating other quality schools in standardized tests.

API Scores: Base vs. Growth

A school district's reputation and test scores are a badge of honor for many Bay Area neighborhoods and their homeowners, so with the impending release of the 2007 Base API scores, it's important to understand what they mean relative to the previous year's scores.

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The tests and the methodology the California Department of Education (CDE) uses to assess the academic performance of its school districts evolve every year, by what they call the "phase-in of new assessments (indicators) into the API" on page 13 of this 73-page PDF explaining the 2007-2008 performance index.   

In order to maintain an apples-to-apples comparison, the CDE uses two metrics: the base API and the next year's growth API, both of which use the same tests.  That ties the two scores together for comparison.  So, for example, you can see how well your schools have improved by comparing the 2007 Base API scores (from spring 2007) with the 2008 Growth API scores (from spring this year).  This 2008 Growth API scores will be released in August.

Homeowners and buyers shouldn't compare 2006 Base API scores directly with 2007 Base API scores to gauge the direction of their school district.  We need to use API growth over a period of time, as in the chart above.  An up-and-coming school district will have positive growth scores over several years, and an elite school district should see relatively little change in that same period. 

The hypothetical chart above taken from the PDF document could represent a good school district that worked its way to elite status between 2003 and 2004, and for their homeowners, it probably represents the culmination of a lot of community effort and participation in their children's education.

Investing in the Right Bay Area School District

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Buy low, sell high.  A lot of people ignore this truism and they believe they have good reason for doing so.  Sometimes several good reasons.  After all, it's not the same as the stock market: most people don't love their money.  Sure, they want the best for it, but mostly because of the things more of it buys.  What does it buy?  It depends on the person.  Maybe freedom, or time, or an easier life, or the future, often in a college education of their children.

No, stocks don't come with locations, or school districts, or uses, except for those jokes about dot-com stocks and toilet paper back at the turn of the century.  But whether my clients are investing in real estate for love or money, I consider providing a solid understanding of the strategies behind choosing a school district an essential part of their property search.

When buying a home in Silicon Valley, you're secondarily investing in the school district where you buy your real estate.  Plus, you can tell a lot about the property you're looking at by how easy the listing agent makes it to find the schools for that location.  But how you choose a school district --- or said more generally, how you choose the right location for your home search --- depends on your answer.  Are you buying a home for love or money? 

Strategies for Choosing the Right Bay Area School District

The trick is that it's not an either-or proposition.  It's a matter of what resources you have, how much you're willing to spend and how you prioritize your home search.  As I do with my clients, we'll examine several options from least to most expensive.

1)  Opting-Out 

It wasn't the first time I'd heard this, but it was the most succinct.  "Alex," he said, "I love my kid to death.  This move is already very stressful on him and I want him to be in an environment where he can focus more on making friends than competing for grades." 

I wanted to bring this up as a possibility because some parents believe that an good education is important but isn't necessarily worth the pressure on their children.

2)  Buying Low, Selling High

A home in an ascending school district often has more upside potential than a home in a prestigious school district where the quality of the schools is already built into the price of the home.  That isn't to say a home in the less expensive neighborhood will appreciate more, in real terms or as a percentage. 

It's that you may not want to pay for something you don't need and you can put that money into more land or home improvements, which will increase your value for money.  Also, if you choose a school district that is continually improving, you'll benefit even more because you'll be receiving value for something you didn't pay upfront for.

Let's look at two neighboring cities: Cupertino and Sunnyvale.  Cupertino's reputation for schools precedes it and it occupies a very specific market niche.  Sure, the shopping mall at Cupertino Square is undergoing a revitalization effort and its wine country, hidden away towards the mountains, has a breathtaking view of all Silicon Valley.  But Cupertino is all about the schools, and it's right to be quite proud of that.  For many of my clients, that's all they need to know and we skip to #4.

Despite their geographic locations, there are two major differences between Cupertino and Sunnyvale.  The first is in relative pricing in both single-family homes plus townhomes and condominiums.  Cupertino is represented using red hues and Sunnyvale using blue hues below.  The difference in medians between single-family home prices in the two cities was $325,000 in April 2007.

Chart of Cupertino and Sunnyvale Comparison

The second major difference is in school districts.  Here is a comparison of the API scores of the two primary school districts.  Cupertino is in the elite category with scores over 900 for the past three years.  Sunnyvale is approaching 800, which is the benchmark for the State of California.  

Chart of Cupertino and Sunnyvale API Comparison

With a difference of $325,000 in the two real estate prices, one style of value investor would consider the bottom-line cost savings, the number of improvements that can be made to the house for that cost saving, and potential appreciation of an improving school district. 

That type of investor may or may not have kids to send to that school district and the upside of improving API scores or a local school working towards a California Distinguished School award may be appealing.  For families with children, the cost savings between median houses in those two areas could pay for not only private schools but college. 

Some schools, like Bullis Charter School (which has an off-the-charts API score of 973 and a 10 out of 10 ranking both statewide and for similar demographics --- and a similarly impressive wait list) take residents from anywhere in California.  There is technically no tuition but a donation ($3,500 at Bullis) is expected.

3)  Unearthing a Hidden Gem

Palo Alto, Saratoga, Los Altos, Cupertino, Pleasanton.  The names alone read like a Who's Who list of elite school districts, not only in Silicon Valley and the Bay Area, but across California and even nationwide. 

Some of the best Bay Area school districts like Palo Alto are even opting out of the ranking game, choosing to focus on students and what's best for them, rather than on making sure students hit all the checkboxes needed for those districts to get high rankings. 

And voters in cities like Cupertino protect their schools by restricting growth, and the additional load on their prestigious school district, even though there may be enough land physically to support more developments.  You pay the premium in those areas.

But there are quality schools in cities that don't have the same elite reputation.  For example, Moreland Elementary School District in San Jose between Cupertino, Campbell, and Saratoga has 5 elementary schools with API scores over 850, with Country Lane Elementary at 915.  Sunnyvale's Cherry Chase Elementary hit 941 in 2006, with a 10 out of 10 statewide ranking; and Cumberland comes in at a more-than-respectable 865 with a 9 out of 10.  Roy Cloud Elementary in Redwood City is a 9 out of 10 with an 883 API, and Redwood City's North Star magnet school rates at a 985 API and 10 out of 10.

Also, because cities overlap unified school districts, it's possible that a home in one city will be covered by a school in another city.  This is particularly noticeable in Sunnyvale and Cupertino where they share the Stocklmeir Elementary and Cupertino Middle among others.

I combed through the spreadsheet I built with over 400 schools so there are too many gems to list.  The reason why I put it together is to highlight schools that have increased their API scores in three years successively, so my clients know where there might be good values.  The point I highlight for them is that it's the choice between buying the name of the city and buying the school.  When you choose to buy the school, you may not have to pay for the name.

But there is nothing wrong with buying the name: you get similar benefits and pricing to the way people buy and resell name-brands.   

4)  Buying the City

It's the commitment.  The priorities.  Some cities have theirs in a different place.  Foster City has been putting off building their own high school because they want to focus on commercial and industrial uses of land.  Cupertino virtually requires developers to help fund their school system.  The median price of homes is about the same in both cities.

There are the other benefits to buying the brand name.  The brand recognition.  The prestige.  The neighborhood.   Will it be easier to sell your home at a higher price in Palo Alto or Redwood City?  

The right school (combined with a strategically priced property and the right time of year) can attract multiple offers and higher prices.  It works the other way round too.  After all, some people will summarily dismiss a property based on the school district.  (And even in the best school districts, there are certain schools that aren't as good as others.)

Plus, not everyone has the time or inclination to do such in-depth research, so they rely on the name.   Choosing where to spend your time is just as important as choosing where to spend your money --- and ultimately that decision is up to you.  In order, the top five districts are Los Altos, Saratoga Unified, Cupertino Union, Palo Alto Unified, and Los Gatos Union.  You can find the most up-to-date API rankings here.

Silicon Valley Distinguished Schools and Area Home Values

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The California Department of Education (CDE) just released the recipients of its California Distinguished Schools award, which honors the "exemplary and inspiring" schools across the state. 

Typically only 5% of schools are awarded with the California Distinguished School title, which schools are allowed to use for four years --- and in 2007, there were 21 Silicon Valley schools (11 from San Mateo County and 10 from Santa Clara County) that received the honor. 

Elementary and secondary schools are evaluated in alternating years and, this year, it was time for the middle and high schools to go under the microscope.

As frequent readers here know, I'm a big advocate of not only looking at real estate in established educational powerhouses, but also finding up-and-coming schools.  After all, schools power real estate demand --- even if you don't have kids --- and people looking for the "next big thing" in terms of appreciation need to look beyond what's already been priced into the market.

There were some big winners this year in Silicon Valley and this article kicks off a week of market analysis homing in on key cities in these school districts.  Here's a whirlwind tour.

Fremont Union High School District (South Bay)

Fremont Union primarily covers the Silicon Valley staples, Cupertino and Sunnyvale, but also includes areas of other Santa Clara County cities including Los Altos, Saratoga, and San Jose.

Three of Fremont Union's five high schools received the California Distinguished School award this year.  Monta Vista High School and Lynbrook High have both amassed five of the awards, while fellow 2007 winner, Cupertino High, has been named a California Distinguished School three times.

Image of Fremont Union High School District Boundary Map

The Fremont Union High School District web site has a PDF map that shows the areas each school in the district covers. 

Sequoia Union High School District (Peninsula)

Sequoia Union covers a wide stretch of Silicon Valley and the Peninsula, serving the San Mateo County cities of Atherton, Belmont, East Palo Alto, Menlo Park, Portola Valley, Redwood City, San Carlos, and Woodside.

Three of Sequoia Union's four comprehensive education high schools (Sequoia Union has one vocational high school) won this year.  And of the award winners, both Sequoia High School and Menlo-Atherton High School have won the award twice, while Carlmont High School has won the award three times.

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The Sequoia Union High School District web site has a handy tool that lets you check what school any given address in the district feeds into. 

Up-and-Coming Schools

The Campbell Union High School District has two up-and-coming schools that are brand new winners this year, Del Mar and Branham High. 

And, further north in the San Mateo Union School District are two more first-time winners, Burlingame High and Hillsdale High.

I'll post the latest home values in the 1SiliconValley.com Housing Market section.

Silicon Valley School System Bang-for-the-Buck

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The California Department of Education (CDE) has released the updated 2006 Academic Performance Index (API) scores for California schools, including data for San Mateo County and Santa Clara County.  The API is a statewide benchmark based on standardized achievement tests which is primarily used to rank schools relative to one another and relative to schools with similar demographics.  Here's an example of what the statistics look like.

We'll take a look at how school rankings and Silicon Valley real estate prices are related, but first let's look at how to read the information.

Number of Students. In the first column, you'll find the number of students whose results were included from that school.  It's pretty close to the total number of students, less any excluded students.  The rules for excluding students are listed in the API Base Documentation Information Guide found on the CDE API page.  Surprisingly, the number of students has little to do with how well the school did in its API scores (almost, see epilogue).

Base API, Statewide Rank, Similar Schools Rank. The Base API score is like an SAT score except it's from 200 to 1000.  Higher is better.  To make comparing schools easier, the CDE provides a statewide rank from 1 to 10 (ten is best) and a similar schools rank that rates schools (again from 1 to 10, ten being best) that have similar demographics and characteristicsApples-to-apples in a way.

Growth Target, API Target. The growth target is the number of points California wants the school to improve in the next year.  That added with the current base API score equals the API target.  The CDE doesn't set a target for schools above the current statewide performance target of 800.

Silicon Valley School District Scores

I've assembled information from the CDE site and the Palo Alto Daily News to provide a table of school district API averages for Silicon Valley and Bay Area elementary and middle schools.

Comparing School Districts and Housing Prices

Remember the chart of median Silicon Valley single-family home prices in February 2007 from my article Determining Your Must-Haves When Buying a House?

Combining the chart for Silicon Valley school district rankings with the one for Silicon Valley median single-family real estate prices brings up some surprises.  (I used a simple ratio between how far the API score was above 700 and the median single-family home price.  The resulting number isn't really that relevant, it's the visual comparison I was looking for.)

Regarding Schools and Value in Pricing

First, while Cupertino and Foster City housing prices are very similar, there is a vast difference between the performance index of their school districts.  On school rankings, compared to Foster City, Cupertino represents a much better value based on the median sale price of single-family homes.

Second, while Los Altos has the highest API scores, it also had a much higher median price putting it on-par with other elite school districts like Palo Alto and Los Gatos, but well-below Saratoga which had both higher test scores and a lower median home price.

Third, it is possible to cherry-pick good schools in average school districts.  For example,  you can search around Sunnyvale's Cherry Chase Elementary, which has a base API score of 941, if you're looking for a good elementary school.  Stay tuned.

[ed.  This is the CYA: The data in the report is considered accurate but not guaranteed.]

Epilogue

There's a quirk in the ratings system where only test scores for "statistically significant" groups (read: ethnicities) are counted.  Some schools, none that I can find documentation on, were accused of reclassifying lesser performing students into groups that weren't statistically significant to prop up their overall test scores.

There is a measure of transparency, though, because if you drill down on the individual schools, it will show which groups were counted, which weren't, and how many were in each.