This post first appeared in the November edition of Cirios Trends: Getting to the Bottom of the Housing Market

For this month’s zip code spotlight we head down the Peninsula to Mountain View, CA, home of Google Inc. and just up the street from rival Yahoo, headquartered in neighboring Sunnyvale.

For the past decade, the relationship between Google and wealth has been a rather simple one: As goes Google, so goes boatloads of cash (and hopefully long term economic stability). And while the Google Effect has been felt throughout Silicon Valley real estate markets, let’s focus on the market immediately in the company’s back yard.

Partly because of Google’s strong economic presence in the area, some neighborhoods have seen dramatic explosions in price in the last 10 years. This month’s zip code, 94040 which comprises the western portion of Mountain View, is no exception. As can be seen on the graph below, prices doubled from 1998 through the market’s peak in 2008.

However, recent price declines have hit the area hard, giving those looking for a mid-high end home a chance to squeeze into a market likely to be basking in the Google glow for years to come.

Looking more closely at the market, one finds a wide range of available properties. Currently available single family homes range from a $1.8 Million, 4 bed, 3 bath to a tiny 1-bedroom available for a “mere” $500,000. Over 70% of the properties in the area are listed at the million dollar plus level, so come ready to spend.

Schools in the area are terrific, consistently scoring in the 90th percentile of schools in the state. Downtown Mountain View has everything from shopping to nightlife. The city also boasts a bayshore municipal golf course and Shoreline Amphitheater (pictured below), a concert venue frequented by the biggest names in show business.

If you are lucky enough to work at Google, the commute from most parts of Mountain View is less than 10 minutes, and there are numerous other technology firms just minutes away. For the rest of us, Downtown San Jose is only 20 minutes away and San Francisco is somewhat farther, over 40 minutes in light traffic. CalTrain provides an excellent option for public transportation.

As the graph shows, prices are down ~20% in the zip since the peak, and a recent spike in supply is quickly subsiding. Ultimately, the extent to which prices can hold these levels is dependent on whether Silicon Valley’s up and coming home buyers continue to eye Mountain View as an attractive, desirable place to live.

Cirios Verdict: NO DEAL

This property is a well-maintained home in Mountain View, CA. Mountain View is home to Google, Yahoo and numerous other Internet and tech companies. Schools are good, crime is low and affordability, is, well, never mind. Prices, after holding up well relative to other parts of the Bay Area, are coming down. We are seeing buying activity in certain neighborhoods, as buyers look to pick up homes that were formerly out of their price range.

750 Telford Ave is in very good condition, although quite small for a 3 bedroom, 2 bathroom home. It is staged, very clean with well-manicured landscaping, which indicates that the agent is putting in a fair amount of effort to sell the home. Unfortunately it’s over-listed.

The subject’s immediate area is seeing very slow sales activity, while homes in other parts of town are seeing strong demand. This indicates that homes in the subject’s area are priced too high, and buyers are content to wait for prices to come down. Even though this property is one of the lowest priced homes in Mountain View, at its current list price, it is certainly not a deal.

Address: 750 Telford Ave, Mountain View, CA 94043
Status: LISTED
List Date: 2/25/2009
List Price: $668,000
Cirios Value: $600,000
List Price vs. Cirios Value: 10.2% over-listed

For a complete Cirios Valuation, click here for our CLEAR report, or on the image to the right.

Have a home you’d like Cirios to use for our next House of the Week?

Make a comment below!

We’re changing up the Cirios House of the Week a bit — we want to know whether you think this is a DEAL or NO-DEAL? In other words, would you buy this house at this price?

In our results post, we’ll tell you what we think.

This week’s house comes to you straight out of rough suburban streets of Mountain View, CA. Mountain View is centrally located in Silicon Valley, with a short commute to the likes of Google, Yahoo and other tech firms. Property values are falling, foreclosures are creeping upwards but the tree-lined streets of Mountain View remain desirable for many young professionals and families. (click on images to enlarge)

DEAL or NO DEAL?
Comment below and tell us what you think!

Address: 750 Telford Ave, Mountain View, CA 94043
Status: ACTIVE
Bedrooms: 3; Bathrooms: 2
Living Space: 1,104 square feet
Lot Size: 5,757
List Date: 2/25/2009
Original List Price: $668,000
Current List Price: $668,000
Average School API: 766
Zip Code Sales Last 3 Months (year-over-year): -43.0%
% Homes in Foreclosure in Zip: 0.43% (Low)
% Housing Inventory For Sale in Zip: 0.72% (Low)
MLS number: 80909740

Real Estate Agent Comment: Charming home w/lg living room featuring a wood-burning FP w/brick surround, hdwd flrs & open dining area. Open kit boasts ample counter/cab space and sep dining area. Wood-beam ceilings in bedrooms. Enclosed sunroom off kitchen leads to covered patio & large sunny backyard w/mature fruit trees. 2-car garage w/built-in storage.