When people relocating to Silicon Valley get “sticker shock” on our real estate prices, most of the time they look for more affordable places in which to live that are close by. Often finding neighborhoods with good schools comes into play. Or perhaps they simply love the scenic town of Los Gatos but can’t buy in town (95030 and 95032 zip codes are “in town” and 95033 is the unincorporated county areas with a Los Gatos mailing address). The mountains between San Jose and Santa Cruz – the coastal range – is home to a number of communities such as Chemeketa Park, Holy City, Aldercroft Heights, the Lexington Reservoir area (the town of Lexington is under the reservoir now!), Alma, Redwood Estates (Upper Redwood Estates, Lower Redwood Estates) and more.
The Los Gatos Mountains are a specialty area and I don’t usually work them. I frequently will refer them out or team up with someone else who knows a lot more than I do about the unique things you need to worry about if buying up there.
There are many plusses to living in the Los Gatos Mountains: clean air, more open space (less crowding), beautiful vistas, great schools (top rated public schools), lower housing costs. It’s a fabulous place if you have horses or just love more seclusion. The folks who live in the hills absolutely love their communities and homes.
At the same time, there are special consideration if you live in the Santa Cruz Mountains. Here’s a list of potential issues that mountain residents may face:
Many residential roads are private & there are private road agreements in place (so owners must agree on paving, clearing brush or trees too close to the road, pay if the road washes out in a mudslide to clear it or if soil beneath it gives way, etc.)
- Utilities: in the valley, we have Pacific Gas & Electric (PG & E) and public water (most of us have San Jose Water). In the mountains most or many of them have propane gas (not P G & E), they do have electric from PG & E though, and well water. Our recent drought – which ended officially this week – was not severe but with a worse drought the wells can run dry and then mountain residents have to truck water in, which is very expensive. You also must periodically check well water for arsenic and other elements and purity. (Also there’s septic instead of sewer. Not a big deal but it’s one more thing to maintain.)
- Fire concerns – the wildland areas are at risk of fire in summer, so the fire marshall’s regulations are to keep brush cleared a certain distance from your house to help lessen the risk. (Google “fire santa cruz mountains” and you will get a lot of news returns on fire danger and past fires).
- Winter weather issues – the higher elevations can get snow a couple of times a year – doesn’t last long but can make roads impassable (not as low as Chemeketa Park but near the summit and perhaps upper Redwood Estates). Trees sometimes fall and block roads and driveways during heavy rainfall. Our redwood trees have VERY shallow roots and I think this is why they come down in strong winds and rain, but I’m not sure. The lovely trees are green year round, including winter. They can keep the sun away if you’re in a heavily forrested area, though. I had friends who lived near the summit and they said that in winter, sunshine never touched their property. Finally, with all the trees and more severe winter weather in the Mtns, residents there lose electricity more often than we do in the valley (due to trees falling I am sure).
- Beach traffic – the mountain communities are all pretty dependent on Hwy 17 (there are few alternatives) and there’s a wave of traffic tie ups as coast visitors come and go with the warm weather.
- San Andreas Earthquake Fault – runs pretty much down the spine of the coastal range (on or close to Summit Road). The summit is the “sunniest” area in the mountains, so if I lived there I’d want to be where there’s more sunlight – but that would mean straddling one of the most powerful and most scary earthquake faults on the globe. I won’t do it!
- Travel time – hwy 17 can be pretty smooth but once off the road, it can be 10 to 20 or more minutes until you get to the house, so the total travel time to whereever you’re going can be long. That’s especially true if there’s an accident on 17, which is not so uncommon with all the curves in the road. There is a large grocery store on Summit Road so it is not necessary to drive to the valley for the basics.
- Resale issues – even in a “hot” market, it takes far longer to sell a mountain home than one on the valley floor. Agents in my office say that on a typical open house up there they get one or two people per hour. It is not uncommon for a mountain house to take a year to sell. I just checked the average Days on Market and it’s 63. In todays hot sellers market, that’s significantly longer than in the valley but far less than when I last updated this post in March 2011 when the Days on Market were 212.
- Bugs – in addition to drywood termites and subterranean termites, up in the SC Mtns they also have dampwood termites.
If you’re interested in learning more about the mountains, please email me! I can get you more info and partner with a “mountain agent” to get you the best deal on a property in the coastal range near the San Jose area.
Finally, if you are not sure which area is in Los Gatos vs having a Los Gatos mailing address (which can also happen in pockets on the valley floor), the best resource is the map of the town’s boundaries, which you can find here: http://www.losgatosca.gov/DocumentCenter/View/338
The City of San Jose is the largest city in Silicon Valley, with just over 1 million residents, and a look at this large and highly populated area will give you a quick sense of what the region is like, generally.
Today I found an online document produced by the San Jose Planning Department which covers a wealth of information, including the largest employers, educational resources, annual rainfall, cost of rentals by number of bedrooms in the apartment, residential real estate median & average sale prices (data is a little old on home buying prices, so don’t use those numbers), and demographics (education, income, race, employment and more).
Here’s the info:
“FACT SHEET: HISTORY & GEOGRAPHY”
Department of Planning, Building & Code Enforcement, Planning Division
San Jose is the 10th largest city in the United States, and it’s quite sprawling, too. As an introduction, it’s helpful to know a bit about each of the major districts or areas. Within them, of course, there are smaller sections which have their own distinct style.
Below, please find links to most of these areas with articles found on my popehandy.com site.
East San Jose
South San Jose
West San Jose
Want more information? Please also check http://SanJoseRealEstateLosGatosHomes.com
It’s so easy to get lost when you’re new to an area and don’t know what’s where! Luckily, the San Francisco Bay Area is rich in large landmarks such as the Bay, the coastal range and the east foothills. At first, the mountains might seem like they all look the same. But if you know what to look for, you’ll soon get your bearings – assuming that it’s daytime and the weather is cooperative!
Here are my Silicon Valley landmarks and mental tricks or visioning – the ones I use to know where I am or where I am going. First, imagine that the Santa Clara Valley is a bit like a funnel with mountains that narrow at the bottom on two sides and the San Francisco Bay on top. OK, it’s not quite straight, but it’s not a bad analogy otherwise. Next, consider how to tell the two sets of hills apart. The ones closest to the ocean, the Santa Cruz Mountains (aka the coastal range) are full of redwood trees and another conifers and they stay green year round. These hills are nearly always a deep, dark green or blue-green. The eastern foothills, on the other hand, are mostly grassy but dotted with oak tree clusters in the nooks and crannies of the hills where the rain catches. Those hills are a bright, lighter green in winter (when it rains!) but for much of summer and fall they are blanketed with a yellow-gold grass.
Now that you have the basic East – West (or actually South to Soutwest, depending) direction sorted out, it’s time to learn what to look for in each of the mountains to get your location sorted out a little better. Fortunately, each of them has a large structure perched on a high peak, so as long as the weather is clear and it’s daytime, they tend to stand out from almost anywhere in Santa Clara County.
Mt. Hamilton & the Lick Observatory
On the east side, if you scan the crest, you will see a white blip or two. That is the Lick Observatory at Mount Hamilton.
Here’s a closer view (aerial):
On the southwest side, in the Almaden Valley area of San Jose, we have Mount Umunhum (which I’ve blogged about previously on my SanJoseRealEstateLosGatosHomes.com site – see http://sanjoserealestatelosgatoshomes.com/tag/mt-umunhum/ ). It looks like a big, white box sitting on a flat part of the mountaintop.
Sometimes all you see is a little snippet of it poking out over some other hill – this is especially true if you are far north of it.
And here’s an aerial view of it from the Santa Cruz side of “the hill”:
If you are too far north, you will not see it at all – but if you can see it, you are likely to be fairly close by, on the southern end of Silicon Valley (unless you’re in Los Gatos, Monte Sereno or nearby and another hill is obscuring the view).
My next, and last, tip is to look for “the pass” for highway 17 from Los Gatos and running through the Santa Cruz Mountains. This is easier to spot than you might think – just remember that any mountain pass is going to come in a natural gap of some kind and in a low point on the hills. That happens here, too. The image below was taken from a medical center’s parking garage on Samaritan Drive in San Jose, just on the Los Gatos border. That low point where you see two hills going way down – that’s it, that’s the pass. And that’s where you’ll find downtown Los Gatos (or very close to it).
Almaden would be to the left of this, by the way – but visible from this spot.
If you can find at least 2 of these landmarks – Mount Hamilton, Mount Umunhum, or the Santa Cruz Mountains pass at Los Gatos, you can likely figure out your approximate location. Hope this helps!
First there is disbelief or denial. “It cannot be that bad – people are exaggerating.” That’s followed quickly by “I thought it was bad where I used to live!”
Then there may be outrage (anger is too mild a word): “Why would anyone pay that to live there?”
Next, a little bargaining: “What’s the work around? Are there any bank owned homes? How about something older – I don’t mind a 15 year old house…” (To us, that’s a young house, by the way.) “What about buying a lot and building?” Or the commute negotiation “I thought I had to be within 15 minutes, but I could go 30.” A typical commute might be 30 minutes in the morning, but 45 in the evening. Many people have worse than typical, though, as they want a bigger, nicer home, better schools, quieter location, etc.
Depression soon follows suit. This may be accompanied by “We just cannot do it” or “We are not willing to do that” (until they see that rents are $4000 for a smallish house in an only OK area and $6000 per month for a decent sized home in a good area.)
Acceptance comes at last. It may lead people to decide to go all in, bite the bullet, and buy locally. It may lead them to move way out of the immediate area and embrace an hourlong commute – or to take the Apple or Google bus to work, if applicable. It could lead them to move to Seattle, Orange County or somewhere a little less overwhelming in terms of housing costs.
Sometimes people think they are at “acceptance” as they write offers which are habitually 5-15% too low. In reality, they are actually still in the “bargaining” phase, hoping for a good deal amidst our raging seller’s market. That doesn’t usually happen, so writing a lot of unsuccessful offers frequently leads to depression (and sometimes blaming their agent for their offers not going through, even when it’s clear at closing that their offer price or terms were the issue).
How fast can you get to acceptance and write a realistic purchase offer? For people who could have bought 12 months ago but are still shopping now, that wait has cost them about 10% of their home price in many cases. For those looking 2 years, it’s easily double that, and in some cases prices are up a full 30%. That’s like setting a match to your entire down payment.
If you want to be a successful home buyer in this crazy Silicon Valley real estate market, you will need to get onboard quickly, because the longer you take to get to acceptance, the more expensive your final home will cost when the market isappreciating, as it has been for about 3 years now. Time is money and nowhere is that more true than in the San Jose, Silicon Valley, or South Bay real estate market.
Looking for more Silicon Valley real estate resources? Here are a few of my other sites, blogs, and market stats tooks:
popehandy.rereport.com – real estate statics for San Mateo County, Santa Clara County, and Santa Cruz County
popehandy.com – Silicon Valley real estate, Los Gatos real estate, info on many areas of the realty market in Santa Clara and San Mateo counties
SanJoseRealEstateLosGatosHomes.com – Santa Clara County real estate, special focus on San Jose areas of Almaden & Cambrian and also Los Gatos with info on the real estate market, neighborhoods, and more
LiveInLosGatosBlog – Los Gatos real estate, neighborhoods, events, businesses, parks. Many photos and neighborhood or subdivision profiles.
- San Mateo County $2884
- Santa Clara County $2552
- The San Francisco Bay Area as a whole (all 9 counties) $2451
- Alameda County $2172
- Contra Costa County $1825
These numbers are the median for the whole county in question – so in Santa Clara County, it will be a lot more if you are in Cupertino or Palo Alto or Los Gatos as opposed to the Alum Rock area of San Jose or Morgan Hill or Gilroy.
Houses are worse still. Small homes may be found for $2500 to $3000 in many areas. Places with better schools may run $4000 to $6000 per month for a home with better schools. Want the best? It’s likely to be $7000 – $8000 for a good sized, comfortable (do not read “elegant”) house with better schools – or more.
Update on August 25: I’m hearing that 1 bedroom apartments in Cupertino are running at around $2300 per month and a 2 bedroom at around $3000 per month.
Read the article in the Merc:
Bay Area rental crisis squeezing out middle class
Realtor Magazine ran an article declaring that many global home buyers consider U.S. real estate prices a bargain. (Related article that was the basis for this piece can be seen here.) Get into these articles just a little bit, though, and you can see that San Francisco and San Jose are exceptions, as are Los Angeles and San Diego:
The study found the following major markets were the most unaffordable:
- Hong Kong
- San Francisco
- San Jose
- San Diego
- Los Angeles
This study included medium and large cities. But what do you think would happen if they looked at the most desirable cities and towns nearby, the suburbs with low crime and great schools (or the areas of those 2 cities with the same)? That’s right, it’s worse – much worse.
Nicer suburbs will really cost you, especially those on “The Peninsula” or San Mateo County. Here’s a glance at the median and average sale price of houses sold last month (June 2015). Countywide it is $1,300,000 with homes selling at about 110% of list price.
Heading south does help. Just as San Jose is a little less expensive than San Francisco, so, too, is Santa Clara County a bit less than San Mateo County. San Jose considers itself the Capital of Silicon Valley – a big suburban, sprawling city of 1 million people reaching out to meet cities like Cupertino, Mountain View, Sunnyvale, Mountain View, and Santa Clara all here in the South Bay’s Santa Clara County. It’s not cheap here, of course. But compare the $1 million median sale price of a home here compared to $1.3 million a little north of here, and you’ll understand why it’s not just the better weather than brings people a little further south (the Peninsula gets more wind and fog than the South Bay does, generally).
These are tough realities for newcomers to the area, whether buying or renting (rents are possibly harder to swallow than purchases). I’d be doing you no favors to sugar coat the situation. Some companies will help by improving your relocation benefits package. None of them will enable you to move here and get as nice a house as what you’ve got elsewhere for a reasonable amount of money. They cannot and will not pay you enough for that to happen.
Even so, it’s worth it to make the leap. There’s so much to love about this vibrant area: great minds, fabulous international flavor, excellent education, wonderful weather with 300 sunny days a year in a subtropical climate, access to nearby beaches, San Francisco, the Monterey Bay, Wine Country and so much more. (And you don’t need to go to Napa or Sonoma for wine – there are about 2 dozen wineries in Santa Clara County alone! See A visit to Ridge Vineyards in Cupertino as one example.)
What does it really cost to buy a house in Silicon Valley? In Santa Clara County, the median sale price of houses is $1 million (May 2015) and the average sale price is just about $1,300,000. So you know it can’t be easy – these are for the whole county, not the areas with the best commutes, best schools, most charm, etc. And it’s worse if you go north, and into San Mateo County, where the median sale price is $1,325,000 and the average sale price is $1,660,000? (Please visit my RE REPORT for information on Silicon Valley real estate statistics. It is automatically updated each month.)
Today I’ll use the Altos Research charts to show the median LIST PRICES (sales prices often a little higher) of homes for sale in several Silicon Valley communities – just a sampling, not all of them, and then we’ll look at the median list price of just the lowest priced homes – those in the bottom 25% of pricing. Please note that the charts will be AUTOMATICALLY UPDATED each week, so this article should remain current.
The high tech epicenters: Palo Alto, Mountain View, Sunnyvale and Cupertino
Below please note the median list price of homes in the super highly desirable areas of technology intensity. These areas are always “sky high” relative to the rest of Santa Clara County (Palo Alto and Cupertino are noted for their exceptionally high scoring public schools, and Palo Alto has a very bustling, fun downtown area).
Next, what is the least you might expect to pay for houses in these same areas? Here’s a glance at the least expensive single family home segments. Palo Alto is just a hair under $1.95 million (these are likely mostly “fixers”), Cupertino comes in at $1.3 million, Mountain View again close behind at just barely under $1.3 million and Sunnyvale offers its most affordable homes at about $775 – $800k.
Please also see this article on another of my sites for more detailed information on the Cupertino real estate market:
For more information on the Sunnyvale real estate market specifically, please read this article:
Los Altos and Los Altos Hills
On another of my websites, I wrote about congestion and traffic patterns on Silicon Valley highways and roads. For many transplants to the San Francisco Bay Area and especially the Peninsula and South Bay areas, traffic is an enormous consideration on where to live and how much to pay for real estate.
If this is a topic that interests you, please take a look: