Campbell Home Prices - April 2007 Update

They found it.  Sort of.  Sure, most of the buzz in the area goes to Santana Row and Westfield's Valley Fair, and it gets overlooked when driving to eBay's distinct presence on the other side of San Jose's border.  Add the fact Campbell doesn't carry the obvious prestige its neighbor to the south, Los Gatos and it's easy to think that the city is just easy access to 280, 85 and 17.

Campbell is a hidden gem of Silicon Valley real estate --- a place with an undeservedly brusque reputation, relatively inexpensive homes, a strong town center at the Pruneyard, and an improving historic downtown area.  Yes, there are pockets of Campbell which a lot of folks are put off by, but builders are betting on a very bright future there as evidenced by the Onyx and Park Town Place developments. 

Chart of Housing Prices for Campbell in March 2007

The two schools Campbell Union High School District, Del Mar High and Branham High, recently received their first California Distinguished School award.  And the numbers say that Campbell is completely hidden no longer.  But that big spike in townhome and condo prices isn't what most people think.

Well-Beyond Apartment Conversions

I do my best to cut through the hype for my clients, so in keeping with that goal, just know that the following news isn't as big as it's going to sound.  The median price of townhomes and condominiums in Campbell spiked 23% year-over-year between March 2006 and 2007.

The speculators aren't back --- let's look at what's happening.  At the lowest end of the condominium price range, you have apartment conversions where existing apartments get a renovation, some bells-and-whistles, and then get sold off one-by-one as "condos."  When you see ads for condos well-below the Silicon Valley median price, you can be pretty sure it's an apartment conversion.  

Image of Apartment Conversion in Campbell

This picture is an example of an apartment conversion in Campbell which I pulled off the local MLS.  It's a clean one-bedroom, one-bathroom flat with Corian counters in the kitchen.  It took five months to sell, had its price reduced by $15,000 and eventually sold about a thousand over asking for $320K.

This type of unit was not typical of the common interest development market in Campbell.  Most townhomes and condos sold had 2.5 or more bathrooms and at the top end of the range, they looked like these and are in the $800K and $900K range.  (I also pulled these pictures from the MLS.)  The pink one is over 2,400 square feet on a 4,000+ square foot lot.

Image of Campbell Townhome 1
Image of Campbell Townhome 2

There were 17 closed sales versus 20 the year before, and while inventory rose over 10% from 37 to 41, sometimes 4 houses is just 4 houses.  The townhouses in Campbell are often bigger and newer than the single-family homes there, so the pricing isn't all that surprising.

Chart of Premium for Campbell Condominiums and Townhomes March 2007

The median of all currently available and pending townhomes and condos in Campbell about $580K so whether the spike holds (it's 18% above the Santa Clara County median) is debatable. 

Campbell Homes Dip Further Below Santa Clara County Average

If you had $800K or less to spend and you had a choice between (1) a 55-year old house on 8,000 square feet which is clean but has older styling and appliances, or (2) a 20-year old townhome on 4,000 square feet that shares only one wall with a neighbor and has upgraded bathrooms, granite in the kitchen, and modern appliances, which would you choose?  It's not an easy decision but it looks like people are choosing the more modern townhomes.

Chart of Premium for Campbell Single-Family Homes March 2007

If you have room in your budget for some home renovations, there might be some deals to be had with a combination of the four horsemen of real estate: a slightly increasing days-on-market number (34 to 40), higher inventory (62 to 67), and an increase in new listings (44 to 54).  But this isn't a sign of the apocalypse, it just means there's a greater chance for my clients to find a nugget out there.